Key Take Aways
Face skepticism with transparency
British consumers are proudly cynical, but smart brands have used this to their advantage to show they have nothing to hide. Lidl has used consumer comments online about the likely provenance of their cut-price produce as a reason to show via TV ads where their fresh food really comes from. Similarly, McDonald’s has addressed head on suspicions about the content of their chicken nuggets by making ads showing the farms it sources from. Transparency and authenticity go hand in hand; Cohn & Wolfe’s annual Authentic 100 study of global brands shows that in the UK, the brands seen as most authentic include Marks & Spencer, Boots and Dyson.
See how the other half lives
It’s not just the #MeToo movement that’s thrown the spotlight on how women are treated. This year marks the centenary of women in the UK being granted the right to vote, and there’s unprecedented attention being paid to the differences in average earnings between men and women. The UK government is now compelling companies with more than 250 employees to publish pay data that illustrates their “gender pay gap”. In this climate, brands must tread incredibly carefully around traditional assumptions about women and the tropes so often used to show women’s lives and their role in the family and society. Linked to this is a broader push for inclusivity and diversity, whether it concerns sexual preference, culture, race and the differently abled. Sensitivity, politeness and open-mindedness are the watchwords here.
Beware the British identity crisis
The Brexit debate not only divided public opinion, it’s exaggerated the dilemma many people feel about whether being and buying British should be a source of pride or a sign of parochialism. This is complicated by the feel-good factor associated with this year’s royal wedding and the arrival of a royal baby, and the fact that buying local chimes with the environmental motive to reduce food miles by buying from sources closer to home. Consumers generally are showing more willingness to buy British food since the referendum on leaving the European Union. They see it as a way to support local businesses – but these loyalties only stretch so far; if the British option is more expensive than foreign alternatives, then price becomes the deciding factor for many shoppers. The higher the price differential, the more likely that proud British buyers are likely to switch to a foreign alternative.
Social media isn’t right for every brand
Yes, social media platforms are where the cool kids are at; in fact, most people are linked to one social platform or another, so it makes good sense for brands that want to get their message out to include them in their communications planning. But the link between the number of likes, fans and retweets and the fortunes of a brand is not always linear, and some brands simply aren’t hitting the mark when it comes to matching their brand’s persona to the content audiences want on social networks. One UK business has even made a virtue of quitting social media entirely; the JD Wetherspoon chain of pubs and bars in April quit Facebook, Instagram and Twitter, in protest at what it said was the addictive nature of social networking (and in the belief that quitting would have no detrimental effect on business). When it comes to social media, the bottom line is: do it well or don’t bother.
Create for a market of one
Consumers want to be treated like individuals, and they expect the brands they deal with to offer personalised services and customised products. New technology means it’s now financially feasible for many businesses to rethink their business models and enable that to happen. Smart meters mean residents can have more control over the energy they consume, black box devices for cars enable good drivers to pay less for insurance, and new digital banks such as Monzo link easy-to-manage accounts with money management tools. Many apparel brands are finding that by allowing consumers to design one-of-a-kind products, they can both charge a premium and at the same time nurture a degree of consumer loyalty and satisfaction that is hard to achieve with something bought off the peg. Personal care is another area ripe for personalisation; the London brand GeneU is one of a growing number of businesses tailoring skin products to each user’s own requirements.
Views on ownership are on the move
Concerns about pollution and changing views about mobility are affecting Brits’ relationship with cars. The rise of Uber and other exemplars of the sharing economy are leading many city-dwellers to wonder why they’d bother with insurance and road tax. In fact, car registrations were down 5.7 percent in 2017 compared to 2016, and in the year to May 2018 were down 6.8 percent. While part of this trend can be explained by interest in reducing harmful emissions – sales of electric and hybrid electric-petrol cars are growing at double-digit rates – it’s also a symptom of changing attitudes to convenience. Owning something is no longer the default position, if borrowing or having access to a service makes better sense. This view can be expected to filter out beyond the auto industry. Rent the Runway shows how it can apply to high fashion.
There are meaty issues
The UK has come a long way since Linda McCartney’s first meat-free meals were launched in the early 90s. Now, far from being a tiny minority, vegetarians – including those who go meat-free on a part-time basis – are increasingly becoming the norm. Veganism in particular is enjoying a huge surge, with the Vegan Society reporting that the number of UK vegans has risen by 4.5 times in the past decade, to 3.5 million people. Food producers, restaurants and supermarkets are taking note. Waitrose has this year become the first UK supermarket to add a vegan section to many of its stores, and health food chain Holland & Barrett has announced plans for a vegan-only store.
Oldies are goodies
Mick Jagger’s just turned 75 and Helen Mirren is only two years behind. The advancing years of these national treasures are an indicator of the ageing of the UK population; the average age of a UK resident is now 40, and whether you call them silver surfers, golden oldies or something else, they’re shattering stereotypes about what it means to be an older person, with not a rocking chair in sight. Rather, there’s a booming appetite for travel, wellbeing and cultural experiences. Even the young aren’t as young as they used to be; the first of the millennials are now turning 35, so brands should look for the chance to cater to their evolving needs with sustainable lifestyle services, and should expect rising demand for things like spas, gyms and wearable health-related tech.
Be clear about data, and not just because it’s the law
Since May this year, the EU’s General Data Protection Regulation (GDPR) legislation has meant that all businesses must seek consumer consent to contact people, must disclose how data is used, and must offer the right to be forgotten. This puts consumers in the driving seat, giving them greater control over who has their data and what can be done with it. It’s also served as a reminder to the public – along with several high-profile data hacks and malware attacks – that their data is a valuable commodity and one that needs careful guarding. The new rules are something that brands simply have to comply with, but they are also an opportunity to demonstrate the transparency and honesty consumers want. This is a chance for brands to create a point of difference in their category, and build a relationship of respect with their audience.
Figs and gin reveal class divide
No longer is it the case the most affluent consumers can be determined by the way they dress or the way they speak; Kantar Worldpanel research shows it just takes a peek in someone’s shopping trolley to understand an individual’s social class. Those shoppers in the AB category – generally professionals and managers – are spending more than any other social group on gin and champagne, and more on alcohol generally, but they’re also upping their intake of alcohol-free beer. They’re also splashing out on handwash (33 percent higher spend than non-ABs), dental floss (spending 29 percent more), olives, nuts and ciabatta. Figs in particular are a great revealer of class; AB consumers spend 71 percent more on this Mediterranean fruit than anyone else. While they are big spenders in certain categories, ABs are also more likely than average shoppers to buy own-brand goods.
Circles of influence are changing
The role of influential individuals in giving brands visibility and credibility among their target audience is well understood by most brands, which are seeking out stars of social media in addition to more traditional celebrity endorsement. But it’s not just the people with the greatest number of Facebook or Instagram followers who are shifting consumer perceptions; in fact, it’s often people with smaller headline figures online who can make a deeper impression on their fans. These “micro-influencers” have a closeness to their audience that online megastars tend to lack, and are seen as having real expertise – therefore views that count and can be trusted – in a certain area, whether that’s fashion, fitness, bread-making or travel. What matters is depth of engagement with an online influencer, not just the size of the fan base.
Shoppers’ not-so-sweet tooth
Sugar has become something of a dirty word, with a huge shift under way in community sentiment – and government regulations – over sugar-laden foods and drinks. In April, the UK became one of a small number of countries to add a tax to sugary soft drinks, raising their price per litre by between 18 and 24 pence. The move followed high-profile campaigns by celebrity chefs, including Jamie Oliver and Hugh Fearnley Whittingstall, to reduce the sugar content in the nation’s diet to help combat obesity. The movement is unlikely to stop here, and some food manufacturers are voluntarily reworking recipes to reduce sugar levels. The Scottish government is considering a ban on smoothies and juices in school canteens, and lower sugar limits on school meals, which could apply to yoghurt and breakfast cereals.
Great stories never go out of fashion
Consumers now see more ads in the course of their daily routine, and on the whole, they find these ads increasingly intrusive and often confusing. The way to stand out – in a way that makes the desired impression and doesn’t have people searching for the “skip” button – is to tell a compelling, emotion-based story. There’s nothing hi-tech about this; it’s the same principle that’s applied to powerful advertising for decades. But Kantar Millward Brown research proves what those in the business have always known intuitively. Not only do emotional, creative stories help a brand stick in consumers’ memories, use of the same creative idea across media can be the glue that holds the whole thing together and creates a multiplier effect through the use of different channels.
Going direct isn’t just for startups
The appeal of setting up a business online – skipping the need to pay for premises and drive footfall – makes obvious sense. Dollar Shave Club, now part of Unilever, is a case in point. This direct-to-consumer approach to selling, often linked to a subscription, is now seen across a range of categories, from fresh flowers that fit through your letterbox, to hair and beauty products and underwear. Online-only fashion brands such as ASOS achieve the same kinds of efficiencies. But many online-first brands are finding value in later opening physical premises – names like spectacle specialist Warby Parker, and fashion brands Bonobos and Everlane. Brands that have traditionally relied on third-party retailers such as supermarkets to reach consumers can move in the other direction, going direct to consumers to supplement their store sales. The purchase of Dollar Shave Club by Unilever shows the appeal of both approaches.
The human touch has never mattered more
As technology delivers more automation and convenience, it’s important brands don’t forget about the importance of human attributes and interaction. When consumers can’t get satisfaction from online tools or when something goes wrong, there’s nothing that brings greater relief than an understanding, well-informed human being who can provide the necessary help. Smart brands are making sure that real people are on hand – in the right places and at the right times – to do what the technology, for now at least, simply can’t do. Troubleshooting when a product’s not working or guiding consumers with complex requirements on the best options available to them, are areas where the human touch, or the human voice or helping hand, can make a huge difference to customer satisfaction.
Got any change?
It used to be said that cash is king. No more. It’s plastic that holds the power now, with debit card payments in 2017 having overtaken cash transactions in the UK for the first time. The ability to pay by tapping a card against a reader has led to a surge in card payments – almost double the number seen the year before – with card usage especially high among 25 to 34-year olds. If you want consumers to part with their money, be sure to have a contactless card reader at the ready.
Increasing numbers of brands are recognising the seasonal preferences – and spending power – of Muslims in the UK, who are estimated to be spending between £20 million and £30 million a year. Ramadan and Eid are the obvious times to target Muslim consumers, with many businesses buying gifts for their Muslim clients and staff, as well as consumers buying food and homewares for celebrations. New brands are providing high-end goods and services aimed at Muslims; luxury halal hampers, stationery and tableware are all selling well. John Lewis is stocking Peace & Blessings products over the Muslim holy season.
Keep calm, join the queue
The push for inclusivity is leading smart businesses to think about catering to different audiences in new ways. Realising that the frenetic pace of modern life can be stressful for many people, Sainsbury’s is following the lead of cinemas and theatres, which are increasingly running sessions for people with behavioural issues or for parents with babies who might otherwise feel uncomfortable in an audience. The supermarket is extending trials of a “relaxed lane” at the checkouts, aimed at people with dementia, where shoppers can take their time without fear of upsetting the people behind them. Chairs at aisle ends offer rest stops for those who need them, and staff are on hand to help people find what they’re looking for.
Don’t I know you?
Facial recognition technology looks set to change the game, as sales of the iPhone X and Google-owned Nest Cam IQ take off. These tools can not only use a person’s face to unlock a device, but – as is already happening in China – be used to make a payment. Visual recognition more broadly is being gradually picked up by forward-thinking brands. Pinterest’s Lens and the Amazon Echo Look enable image-based search, a potential boon for fashion and accessory brands, as well as homeware and even food.
Re-evaluating good value
A great deal isn’t just a good product at a bargain price; value for money is no longer the only value consumers are looking for. They want a deal that gives them other benefits that are of value, such as fun, convenience or the greatest of all treasures – more time.