CROSS CATEGORY TRENDS
1 Brexit means Brexit, but no one’s quite sure what else
The prospect of the UK leaving the European Union is causing a huge amount of uncertainty among consumers. Prices of some everyday items have already gone up – wine, mayonnaise, bananas and Lego, for instance – along with bigger-ticket imported items such as computers, cars and appliances, as the pound has weakened. There are conflicting reports on what the longer-term effects on people’s pay packets and spending power are likely to be, which is leading to widespread consumer anxiety. Consumer confidence measures have been in negative territory for a year. So, while people haven’t stopped shopping – the unexpectedly sunny summer has helped keep retail sales growing so far in 2017 – the need for brands to demonstrate value for money is intense. That doesn’t necessarily mean being cheap, but rather demonstrating quality and longevity, or by providing something else that makes a purchase “worth it”. It might be reassurance that a brand is to be trusted, or a brand might create a “feel-good” factor that consumers are willing to pay for.
2 Online shopping is moving to mobile
The UK is the biggest online shopping market in Europe and is third in the world, after South Korea and Japan, based on the proportion of all transactions. In the UK, 6.9 percent of all retail sales take place online and the proportion continues to increase, as delivery times get faster, and as an ever-greater range of items becomes available to order. Amazon is by far the biggest e-commerce platform in this market, and is notoriously secretive about the number of subscribers to its Prime service, which provides delivery perks and access to TV and music content for an annual fee. But it has said UK members are in the millions, and a survey for Retail Week put it at one-third of the British shopping public. The growth of voice-activated tools such as Amazon’s Alexa and Google’s Assistant takes some of the hassle out of browsing on a screen, and sales of mobile phones with larger screens, such as the iPhone 6 Plus and the Samsung Galaxy S7 Edge, are making mobile shopping easier. This has fuelled annual growth of almost 50 percent in e-commerce sales via smartphones. Brands and retailers in the UK, however small, should all be online, and should all be mobile friendly, with sites adapted to the small screen.
3 Consumers are concerned
When consumers are deciding between brands, they’re looking at much more besides the basics of price and product spec. They are increasingly concerned about where goods are from and how they’re made, so are looking at environmental issues relating to the supply chain as well as the way companies treat their employees and use their profits. Brands are expected not just to deliver on a consumer’s needs but also to share and respect consumers’ points of view. Labels such as Fairtrade and free-range can signal a brand’s priorities, and communications can speak to a higher purpose beyond just selling more of a product or service. Taking a stand can be a risky endeavour for a brand – just ask Pepsi, whose “protest” campaign backfired. But when done well, in a way that resonates with the brand itself, projecting a clear, strong sense of purpose and passion can help build the kind of emotional connections people are looking for. Brands should be looking not to increase market share, but their share of consumers’ lives. It’s time to stand up and stand out.
4 Make memories, don’t sell more stuff
Experience is becoming a highly sought-after commodity, especially among the young. People don’t just want to simply acquire more possessions; they want to make memories. It is this growing consumer desire for experiences that keeps people paying for coffees they know are being sold at a huge premium, but one they feel is justified by the décor, the music, the barista and the decorative flourish on their flat white. Even the sustainability head of Ikea accepts that many consumers have now reached “peak stuff”. For brands and retailers, this means that providing a product that simply delivers what it promises is no longer enough. They must provide a richer translation of a brand promise to sophisticated consumers, who want a relationship with a brand that precedes and outlives a transaction. This is why many brands are expanding into the so-called “experience economy” or the world of “retail-tainment”. Specialist stationery retailer Paperchase is running craft workshops at its flagship stores as part of its “Treat Me” loyalty scheme, and department store John Lewis has made home technology departments look less like stores and more like homes, to give a more realistic demonstration of IT in action. Nike is a powerful example of a product brand that works with consumers for the long term, as a fitness partner through its Nike + technology.
5 The balance of power has shifted – it’s time to share
Evolving media consumption is changing the way people relate to brands, and the balance of power has moved. In the digital world, consumers are no longer passive recipients of a brand’s message, they’re critics, commentators and creators. When consumers don’t like something, they’ll either block it or shout about it; the flip side of this is that when they love it, they have the ability to share that love, and a recommendation from a friend often carries more weight in people’s minds than a paid-for message. This means brands have to completely rethink the way they interact with consumers, and earn the right to be part of consumers’ conversations. Brands have to be prepared to share control. Giving consumers the tools with which to do amazing things can feel risky but also be incredibly powerful. Look at the way brands such as Red Bull and O2 have encouraged people to create things for themselves; the brand is a catalyst that helps consumers do what they want to do.
6 Please mind the generation gap
The old have always grumbled about “the youth of today”, and teens have never believed that their elders really were young once. But generation gaps are not only real, they’re widening in the UK. As people live longer, they are redefining what it means to age; they are no longer winding down during retirement, they’re enjoying active lives and pursuing dreams. At the same time, those at the younger end of the age spectrum are occupying increasingly small niches. They’re not just different to their parents and grandparents, they’re very different to each other, in their tastes, priorities, media consumption habits and preferences. For brands, this means tailoring messages and media planning to a carefully understood and targeted audience; ideally, to an audience of one. Targeting by age, device, location, current weather conditions and time of day is all now possible, and deploying the right combination of creativity and data can help brands hit the spot.