Back to the Future. Trends in the consumer experience of yesterday and tomorrow
By Violeta Niculae, Executive Director - Exact Business Solutions, Mentor in SIM’s Community
Many stories start from the end to take us back to the beginning ...
In 2013, we at Exact Business Solutions presented, at the Brand Activation Strategy conference, the results of one of the most daring studies we conducted: Consumer of the Year 2020, based on the LEGO®Serious Play® methodology and materials.
The study results focused on the acronym ATTENTION, seen as the main characteristic of the consumer (then) of the future. Unfolded, the acronym (Attention, Time, Demand, Nature, Tradition, Information) generates a series of truths about the character of 2020, what it will look like, and what brands must do to attract attention and loyalty.
The exercise we are doing now is to go back in time and analyze how many of our predictions from then came true in 2020, but - significantly - what are the trends that we still see viable from 2021 onwards.
Obviously, none of us expected the global crisis triggered by the pandemic, and now, even more so, we face inherent difficulties in assessing consumer response in this new era.
However, this is how the consumer of 2020 looks like in our vision in 2013 and to what extent 2020 has confirmed our predictions:
The increased Attention to his real needs is the first characteristic of the consumer in 2020 that we have taken into account. Being confronted with an avalanche of information, surrounded by brands that "harass" him with their messages, the consumer becomes cautious, trying to validate the information he obtains, forming his opinion based on several sources of information.
The consumer's growing attention has been confirmed throughout 2020, especially in the context of Covid-19, not only in terms of engagement to its actual needs but especially to the social responsibility of companies, in particular. Especially their involvement in the management of the crisis that occurred with the pandemic.
Our first prediction was also confirmed by the study "Impact of Covid-19 on consumer perception", published in May 2020 by Exact Business Solutions, in the sixth stage of the Digital ®Evolution Tracking study. Romanians were placing corporations, hypermarkets, supermarkets, local stores, doctors, and police in the top 5 of the most efficient institutions to manage the pandemic situation positively.
Time - another factor that influences consumer behavior. In 2013, Exact predictions referred to a changed buying behavior, in a sense that time, becoming fragmented, and all the tasks that the consumer must perform will stimulate the development of local and online commerce, visits to hypermarkets are rarer, with carefully calculated budgets.
Paradoxically, indeed the year 2020 was confirmed, but from a completely different angle. Over 70% of consumers participating in the study "Impact of Covid-19 on consumer perception" go much less often to the hypermarket/supermarket for shopping than usual, and over 15% do their shopping more often, respectively ordering food (excluding here the panic and irrational consumption purchases during the lockdown period).
Moreover, if in recent years new technologies, the Internet, smartphones, and other mobile devices have made it possible to compress time for consumers and complete routine activities simultaneously with other activities, 2020 has offered a much more static consumer two new superpowers: the chance to spend more time with family, but also the ability to move many physical activities online and thus get out of a comfortable routine, allowing himself to learn new things, to learn new skills, primarily digital.
Demand. In 2013, the Exact team predicted that the requirement (in terms of quality of products and services) will be one of the main characteristics of the consumer of 2020, being more selective than ever and expecting brands to communicate as transparently as possible: to acknowledge mistakes and stop amplifying only the positive aspects.
2020 has confirmed the continuous growth of the armed consumer's power with everything that means easy access to information, mobile communication, and new technologies, but especially with another new superpower due to the pandemic: forced digitalization. This means that digitization, even forced, has given the consumer the dominant position, which is becoming even more demanding, forcing companies to be more responsible, more transparent, more efficient, and more informed and more visible, and more vocal.
Nature. The return to nature and simplicity is a trend confirmed in 2020, sustained and even accelerated by the period of isolation during the pandemic. Returning to nature meant not only a psychological switch by appreciating at another level what we lacked in isolation (spending time in nature) but also rationally, the demand for acquisitions of houses and villas increasing by over 50% compared to the same period of the previous year (source: economica.net).
Moreover, from the consumer's point of view, the return to nature and simplicity translates especially by increasing the demand for organic products, as natural as possible. The demand for healthy foods and organic products has been a trend for several years. But with the pandemic, consumers have become even more concerned with purchasing natural products, especially for strengthening immunity and improving health.
Tradition also has its say in consumer choices: going back to the roots, focusing on family and friends. And here's how a trend we anticipated eight years ago has become a growing one, the catalyst being, again, the pandemic, but not only!
Over 60% of participants in "The Impact of Covid-19 on Consumer Perception" study did not interact with family outside the home during isolation, and 70% never met with friends. Coupled with the constant concern and concern for the health of family and loved ones (80% of respondents) and the limitation or giving up meetings with friends, the return to family values is one of the essential trends manifested throughout 2020.
WhatsApp, the most used application for communicating with relatives and friends, failed to replace physical encounters completely (ask what activities would most like to return to normal as soon as possible, 1 in 4 Romanians chose meetings with family and friends*)[*Reveal Marketing, December, 2020 ].
In terms of tradition as a trend in consumption, it maintains its upward trend in recent years, as evidenced by large chain stores' partnerships to support small producers. For example, according to gazetadeagricultura.ro, producers of vegetables, fruits, and traditional products from the Food Hub (a program launched by the Romanian-American Foundation to support small entrepreneurs in agriculture), recorded in 2020 sales of about $ 600,000, almost double compared to 2019. The increase is mainly due to the advance of online orders, as a result of the pandemic, but also by the growing demand for Romanian traditional products.
Information. Last but not least, the consumers in 2020 - we expected in 2013 - will be informed, each gathering information from several sources. However, there is also a negative aspect: the impossibility of making a relevant choice under the avalanche of brands that communicate, sometimes aggressively, their supremacy.
Moreover, with the pandemic, the need for information and constant updating has increased, but at the same time, the vulnerability and exposure to misinformation and false news increased.
"Everything is old, and everything is new ..."
The great whirlwind of changes and trends that Covid-19 has caused swept, like a tornado, everything that brands considered would remain valid in consumer behavior. Even if many of the trends predicted for the coming years are reconfirmed, new reality reveals other unique challenges that will arrive in 2021 with an overwhelming force.
Among the new challenges, the most relevant seems to be the emotional impact of the changes brought about by the pandemic on the consumer at a psychological level. Among them, the main ones are the increase of anxiety, the constant search for adaptation to the new circumstances, the long-term uncertainty, and the new virtual ways of social connection. All these features outline a much more digital, demanding, and unpredictable consumer profile. According to marketingdirecto.com, we can find five types of "emotional" consumers affected by the pandemic:
- Inflexible consumers: the most economically affected and therefore the most rational and consistent when buying, with a penchant for promotions, offers, and discounts
- Scared consumers: pay more attention to store loyalty and reward strategies and appreciate more safety and certainty
- Progressive consumers: the most attracted to high-end products. They are hedonists, constantly looking for entertainment sources, preferring to avoid negative messages, especially alarmist ones, related to the pandemic.
- Prudent consumers: focus more on the present and prefer not to think about an uncertain future
- Vulnerable consumers: are the most sensitive and emotionally exposed, tending to seek incentives and rewards to cope and adapt to the effects of the pandemic
Back to the... Future
We live in a period of constant change in consumption in all industries. Global research shows that 4 out of 10 companies will fail in the next decade if they cannot transform or adapt their business to meet the consumer's increasingly demanding demands, primarily digitally. We are all witnessing today the repositioning of malls and hotel chains, disruptive, surprising technologies, impressive mergers, and acquisitions, but also global bankruptcies.
During all these changes, companies are practically pushed to continue to increase their revenues and decrease their expenses to survive. Still, the essential strategy to face the challenges in such a disruptive environment is to adapt to these as quickly as possible. Changes, as they occur, from more or less radical reorganizations and transformations to new business practices.
In addition to the trends set out above, which we see as viable from 2021 onwards, our local and global research also takes into account new ones, which may have a significant impact on future consumer behavior, summarized in a new anagram: DYNAMISM (Digitization, Individualization, Nature, Altruism, Maturity, Interaction, Health, Work).
Digitization. COVID-19 paved the way for digital transformation, with companies transforming their operations to cope with office closures, restricted traffic, and unavoidable supply chain disruptions.
Inevitably, all industries operate in a continuous flow, and companies are forced to adapt their strategies to evolve with changing consumer behaviour quickly. For some companies, this has meant switching from B2B and B2C to a D2C (direct to consumer) model or using virtual streaming to replace meetings, conferences, and events. As companies and consumers adapt to new technologies, there are even more productive ways to either do our job or provide new memorable experiences for consumers. It adds a new value to the digital transformation from 2021 onwards, including DIY e-commerce (Amazon, Shopify, aliexpress, etc.), telemedicine, contactless experiences, connecting the consumer through AI.
Individualization, personalization. Consumers want personalized experiences and expect brands to adapt their products and services to their personalities. However, to benefit from these experiences, they must disclose personal information. Although they invest in smart devices, concern for their privacy leads them to look for ways to control the accessibility of companies to their data. That's why companies need to explore new ways to deepen their relationship with consumers, build trust, or develop products and services that add enough value to consumers to encourage them to disclose useful information for this purpose.
Nature, environment: As the world entered isolation in 2020, the environment seemed to come back to life: the Himalayan peak was visible from India for the first time in three decades, the air was cleaner in many big cities of the world, wild animals they appeared in various areas that were once overpopulated.
As a result of the unprecedented large-scale lockdown period, the reduced economic activity has led to a significant decrease in CO2 emissions, leading to improved air quality. At the beginning of 2020, it is estimated that the world will use less electricity compared to 2019. All this sounded very optimistic for the environment, implicitly for human health, but, unfortunately, not being sustainable, this goal was not possible. COVID-19 showed us how difficult it will be to address climate change in the future and how long the road we have to take will be.
In this context, consumers have expectations from themselves to contribute individually to environmental health, but especially from companies, by taking responsibility for re-evaluating their offer, practices, and operations and taking concrete measures in terms of sustainability and sustainability.
Altruism, charity: In 2020, with the pandemic, we all experienced overwhelming emotions and witnessed many different acts of generosity, charity, solidarity, and kindness more than ever: from concerts given to medical staff in the hospital yard, volunteers who risked their health to help, artists and entertainment companies offering free content to all campaigns with slogans that revolve around the same idea - together: "Together we put the virus in isolation!", "Together, from a distance, we prevent the spread of the virus ”,“ Together for #Suceava! ”,“Together we can stop the virus.”etc. How can altruism become a trend, and how does it influence the consumer?
Consumers are eager to support those in the "front line", looking for ways to help their family, friends, neighbors, especially the most vulnerable people, and, in this sense, appreciate brands that show the same altruism towards others.
Many brands have already understood this trend, actively contributing and getting involved in charity or consumer life (eg, Farmec by launching disinfectant gels, Profi by capping prices, Kaufland by partnering with Glovo and free delivery for the elderly, and many more).
This trend will continue, most likely from 2021 onwards, because the emotional plays a decisive role in consumer behavior, especially in difficult times.
Maturity, seniority. A target neglected by most brands is that of mature people, over 45 years old, and this is a big mistake! Thanks to technology, people have a longer life expectancy, live healthier, and enjoy a higher purchasing power at maturity than any generation before them.
Overall, adults are typically more loyal to the brands they prefer, can be very vocal brand ambassadors when they want to, do a lot of shopping, and spend significantly online. The pandemic has had an enormous impact on technology and on the mature age segments.
However, only 5% of Europeans say they feel represented as a group in various advertising materials (according to GWI, July 2020), which is an essential clue for companies and could be very useful for marketers to start researching and to address this vital age category as well.
Interaction. Whether the physical interaction, so invoked in the last year, will happen sooner or later, the virtual interaction will certainly be in power in 2021. For companies, this is a trend that must be fruited quickly; To be successful, digital interaction must be dynamic and fast and must provide significant benefits to the consumer. Whether we are talking about an interaction with a call center operator, a sales agent, or a marketer, it is essential that the information is short, to the point, and provided quickly. The details are then made available to the customer upon request for further consultation.
The interaction with the consumer can be viewed from another angle, namely, from the perspective of brands' experience: the more interactive, the more memorable. For example, crowdsourcing can be an interactive, unique, inexpensive, and highly efficient method for companies to consider by marketers for 2021.
Health. More than ever, 2020 has reminded us of the importance of health, allowing consumers to focus on their health, especially mental health. In the pandemic, many young people and adults have developed various states of anxiety. Therefore, in addition to the demand for the most natural, organic products, consumers also want products that address their mental well-being needs, preventing stress and helping them sleep better. Thus, in 2021 we expect to see a more significant change in this buying behavior: more organic products, but also relaxation products, anti-stress, and increased immunity.
Work. We do not expect 2021 to be a year of relaxation after a year as challenging and intense as 2020, but, on the contrary, we expect 2021 to be a year of hard and efficient work to recover and rebuild.
Companies are now struggling between preparing for a total return to the office and employing large-scale, remote, hybrid work. But to analyze consumer behavior and how it impacts different industries, we need to consider that many employers are considering greater flexibility in working remotely. So that consumer housing will evolve beyond the traditional function of living, eating and sleeping towards a type of "multifunctional space" - work, fun, shopping, education, fitness, etc. Consumers want more flexibility in their lifestyle, high-speed internet access, advanced technologies that allow them to do much more in and out of their homes. This trend dramatically changes the needs and behavior of consumers in how and what they buy. They will eat more at home, buy more casual clothes, need adequate furniture, etc. Opportunities will increase, and consumers will consume more time and spend more money on products and services to meet their new needs. This trend will have massive implications for the companies involved.
Analyzing all these trends and predictions, what is certain in 2021, is that, regardless of preferences, whether we are talking about physical shopping, in stores, or online, companies must be prepared to offer consumers memorable experiences.
(article published in Modern Buyer, 2021)