Former PepsiCo general manager John Maltman explores what is driving today’s shopping behaviour.
This year kicked off with some downbeat stats from the ONS revealing a decline in consumer spending set against a backdrop of anti-consumerism and a trend towards buying into experiences over goods.
The notion of the experience economy has been around for a few years, but now consumers are voting with their cash and making it one of the most important trends in marketing.
Gone are the days of the Tesco mantra ‘pile them high and sell them cheap’, with consumers becoming increasingly discerning with what and how they buy.
The rise of the empowered shopper
As the ecommerce market has matured, it’s given rise to a sea of retailers, web pages and Google Shopping search results, ultimately creating a very savvy and uncompromising consumer – always on the lookout for the cheapest deal or most convenient way to acquire goods as soon as possible.
But, as we know, it’s not all about saving on time and/or money. Shoppers are increasingly moving towards great retail experiences, and these experiences are built on propositions that speak to people individually.
“The knock-on effect of this is that ecommerce is becoming more localised and reverting to the days of direct-to-consumer”
The knock-on effect of this is that ecommerce is becoming more localised and reverting to the days of direct-to-consumer (DTC).
Usually marketed to younger generations on social platforms, this can be found in the wealth of niche products and services that each individual business sets out to own, from chinos or brogues to mattresses, craft beer and razor blades.
These brands speak directly to one very specific target demographic with a voice that is fine-tuned to make the consumer feel like they are part of something.
It’s rooted in the psychology that if one company is doing one thing, it must then surely be able to do that thing exceptionally. It feels bespoke and personalised, even if it’s not, and these companies charge a premium for it.
Brand consistency rules in an online world
Naturally this trend towards personalisation and strong brand identity poses a big challenge online, especially as marketplaces and external distributors emerge as the online channels of choice for shoppers.
The thing is, consumers still want convenience, and convenience has become business as usual rather than a real premium, with sites such as Amazon having implemented ‘1-click’ ordering and same-day delivery for a nominal cost.
“The good news is that the rules of brand-building haven’t changed”
It’s now imperative for brands to develop highly tailored strategies for each product, or risk having that all-important brand diluted as it’s sold differently via a variety of online outlets.
It’s a common complaint we hear, and something I remember from my time working at the likes of P&G and PepsiCo.
Back in the day, it was a simple case of being able to send someone to stores to make sure your brand was correctly represented – and the bigger your brand, the larger job you had on your hands to keep on top of your digital presence.
The good news is that the rules of brand-building haven’t changed – a clear proposition and effective communication remain imperative, it’s just that they are tougher to execute across such a plethora of channels.
Fortunately, technology is enabling brands to automate the development of personalised but consistent brand communications by giving them insight into how they are being presented across all ecommerce sites, from how their products are displayed and described to what offers are on, where.
While the switch from avid consumerism to experience-led purchasing could be viewed negatively by retailers, it in fact presents an opportunity to provide a stronger consumer experience by working with brands to blend the physical and digital channels.
Ecommerce insights can be used to target relevant shoppers online and drive them in-store to interact with the product.
Allowing brands to flourish with separate yet interlinked identities, both online and in-store, will strike that perfect balance between convenience and experience – which is ultimately what consumers are clamouring for.
John Maltman is speaking at Retail Week Live – which runs from March 7-8 at InterContinental Hotel at London’s O2 – on ‘What’s driving the shopping habits of today and tomorrow?’ alongside representatives from Coca-Cola, Fenwick and Wilkinson Sword-owner Edgewell.
Visit Live.Retail-Week.com for more information.