Is your business ready to face a fast changing consumer?

Consumer and Shopper habits have changed. We hear the economic news and how this affects retailers, the dissections of spending and purchase behaviour and all know personally that we are evolving our habits to suit a faster paced and economically savvy way of life. What is becoming more apparent is that Consumer and Shopper behaviour will continue to evolve, at a greater pace. As a foundation for a customer centric strategy, is your business ready to face a fast changing consumer. 2014 is expected to be a year of strong growth for the UK economy, poised to grow faster than other European economics and this positivity is reflected in a more optimistic outlook from UK Shoppers (Michael Freedman, IGD). This all should spell good news for UK retailers and brands; more people willing to part ways with their money. However, grocery retailers are still reporting a difficult trading climate and other retailers and brands must still be feeling the pinch too. What is causing this disconnect? I would argue two points:

• A less predictable shopper
• An incomplete picture of the consumer

The most disruptive change purchasing behaviour has been the Internet and the plethora of associate media that now keeps the world informed. Information is instant. Opinion is conveyed across social and political borders and an individual’s influence has a wider reach than ever before. As a society, we are becoming accustomed to things happening more quickly. An aspect of this wealth of information affects our knowledge about brands – being able to compare prices, find a bargain, read about other people’s experiences and make a decision on how quickly we can get our hands on something, all weave together during the shopper journey. Also, the rise in popularity of online shopping, combined with the rise in apps and tablets mean more decisions are being made away from store and away from traditional areas of influence. Shopping habits, driven by an evolution in both financial and ethical thinking has become more focussed around value (James Russo, Nielsen). Does this product represent value to me and my beliefs? Consumers are concerned with both quality and price of products and trust is a key factor in this decision. When this trust is broken or compromised, consumers are more willing to try new products or brands to find a better alternative – and are often spoilt for choice. This has lead to some suggesting that brand loyalty, in its traditional form, has died. A recent article, discussing the Twilight of Brands (James Surowiecki) concludes that brands are now only as good as their last product. The innovation and quality of new products counts more than brand heritage and product success is driven by giving the consumer a better product to suit their lifestyle and values and one that delivers tangible value. For brands that are established and have relied upon shared values and past performance to create loyal customers, this should be a cause for concern. A balance in communicating a consistent brand message (at every level) and giving the consumer new innovations that appeal so much that they will have to buy it is difficult to achieve. Instead, establishing a dialogue with customers, creating a story and an experience that they can feel a part of is a strategy that creates a loyal following and emphasises the values of the brand. There is also a wider expectation to be able to have dialogue with brands in a way that has not previously existed, due to our hyper-connected lives – their voice is important and they expect to be listened to. As such, engaging with them in the correct way and using the correct forum is important for establishing the dialogue that you want to have with your target customer, as moving in conflict with these customer expectations can quickly alienate a brand and product and dissolve the trust that has been created. How can a brand decide on the best way to engage with their target customer? The first step (and most important) is the research you conduct. This allows you to establish a base line of understanding about your consumer and subsequently pick up on the smaller, but not inconsequential, changes in perception and behaviour attitudes towards your brands and products. In turn this enables brands to react quickly and in the right way, and to direct thinking and communications with the audience in the right manner. Just as important as the message you want to send, is to construct the mechanisms to enable an adaptive strategy that can mould to a dynamic consumer environment. This might seem an obvious statement – I know that many businesses spend a lot of money on research and uncovering insight. Why am I taking the time to reiterate it? I speak to a lot of Research and Insight, Strategy and Category Management professionals who share a frustration in the lack of buy in to customer understanding being central to all of the key commercial decisions of a business. A lot of businesses claim to be customer centric, but does yours have the framework and desire to truly utilise the knowledge you gain about consumers effectively? How do you make best use of all the data sources that you purchase and are all the stakeholders involved in key customer making decisions familiar with the data and research at the disposal? In a fast evolving commercial environment the insight and understanding of the consumer must be clear enough across the business so that it can be central to the commercial strategy, thus allowing sales, marketing and digital teams to act in harmony to achieve a clear, unified and timely message. Having the right balance of understanding the consumer you are targeting and being able to deliver an effective strategy in their area of responsibility is a talent driver for businesses going forward. All functions need to have an affinity for insight and the relevance to their deliverables, as a bottom up influence. If this understanding is widely conveyed across the business and understood, the message being communicated will be clear, using the right platforms and the value of engaging with your brand will be clearly demonstrated. In this age of austerity and savvy shopping habits the right thinking in the right place has never been more key for businesses to outperform their competition and to effectively engage with consumers. Hiring decisions to reflect this fundamental need and to increase the affinity for insight across the business have never been more important. With the emergence of big data, the balance of power lies with the well informed consumer and shopper – they will research and plan their purchases and squeeze value from the brands that they decide to engage with. To truly compete in this hyper-informed market, brands and retailers have to do the right research to understand the consumer and appeal to their individual values and needs and importantly, construct an effective strategy around this. Are you confident you know about the consumers with which you are dealing? You can be sure we are doing our research on you…