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As consumers, I think that we’re all feeling the impact of the macro-economic trends that are happening in the marketplace; it’s hitting our wallets in a very real way. As a result, consumers are really searching for value. Whether that’s trading down to store brands or watching for sales on the products that we know and love, there is a definite increase in price sensitivity.
One of the more interesting biproducts of the pandemic, particularly in the early stages when there were major out of stock issues, is an increase in willingness to try new brands. Consumers have realized that there are some great options out there - whether that’s control label or smaller local brands. The challenge becomes, how can you get your product into a consumer’s hands and make that proof point zero risk now that we’re all watching every dollar we spend? And with the shift to ecommerce, it’s even harder for consumers to become aware of new brands, or even new innovations for existing brands.
That said, we’ve seen some of our clients counter the trading down trend with environmentally or socially conscious items and healthy products. Whether it’s sustainably caught tuna, environmentally friendly coffee, or human-grade dog treats, there is a group of consumers who are willing to spend on premium products. The challenge is often finding them.
From a how people shop perspective, we all know that ecommerce has experienced a crazy amount of growth over the past few years and while it’s slowed and even taken a bit of a step back in North America, it’s still a very important part of retail activation for brands - I’ve seen data from McKinsey that suggests that online grocery sales will at least double again by 20301. The challenge for retailers is how do they make it profitable? And you now have retailers setting up shop without a brick and mortar presence, instant delivery, and more. It is going to be interesting to see who is able to capitalize on these trends and who gets left behind.
The shift to in-home preparation is another trend that I’m watching to see how enduring it is. Now that we aren’t being forced to make our coffee at home or host our own spa days, will we go back? It’s my opinion that labour challenges in the marketplace and the impact it’s had on the retail and service industries as well as the fact that we’ve had years of new behaviours will mean that a lot of these will be sticky. And linking back to the consumer search for value, if I, as a consumer, can make something high quality at home for less, then that is pretty attractive to me.
Finally, clean beauty is another trend that I see continuing to grow in 2023 and beyond. Whether that is refillable products, less packaging, or better recyclability or “free from” products - these types of options are becoming more and more mainstream.
I know that it’s a bit of a buzzword at this point, but having an omnichannel presence is critical. Even if your consumers are back shopping in brick and mortar stores, they will research your products online, particularly if they are new. Even a few years ago I wouldn’t have believed that you’d need ratings & reviews for consumer packaged goods, but this has become a key tool in the industry, particularly for premium products such as prestige beauty. Research from Northwestern University shows that reviews can increase conversion between 190 and 380%. But consumers are also pretty canny and are skeptical of overly positive reviews. You need real feedback from real consumers, even if it isn’t 100% positive. Recency is also important so brands need ways keep replenishing them.
One challenge is that online shopping - at least for the types of items that we’d normally pick up at our local grocery or drug store - is often a very “autopilot” activity. So even though you might be there online, consumers may not find you because they don’t know to look for you. I don’t know about you, but even when I AM in store, these days I am much more likely to stick to a list and get in and out as quickly as possible, which is very different than my pre-pandemic behaviour. I’m not stopping to look at the innovation display on the endcap; I’m not investigating a brand on shelf that is new to me. It really requires marketers to break through the clutter in a way that they haven’t had to before.
So, making sure that you’re there - and by there I mean everywhere that your consumers are - making sure that you’re find-able, and making sure that you have authentic and recent feedback are keys to sustainable growth in my opinion.
In a word: personalization. Whether that’s brands or retailers, its all about communicating with me directly about things that are meaningful to me. Research shows that more than 70% of consumers expect personalization and 80% of consumers are more likely to do business with a brand that offers personalized experiences3. As a result, first party data has never been so valuable. We actively encourage our clients to own their relationships with consumers and to do it in a way that demonstrates that you know them as individuals. I truly believe that the use of rich data about a brand’s actual consumers creates a competitive advantage. Of course, you need to make sure that you’re providing something of value in exchange for that data, though.
And in regards to sampling specifically, some consumers are still reluctant to try products in their local store. By sending a sample to your most valuable consumers and asking them to try your products how, when, and where they would in real life is hugely compelling. It also limits waste and provides marketers with an opportunity to continue the conversation with those consumers, again in a personalized and meaningful way.
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