If you were to believe the headlines, the death of the high street is imminent. Since the collapse of Woolworths in 2009 the UK retail scene has seen a wave of high profile administrations. For example, those Friday evening trips to the local Blockbuster are a thing of the past!
However, in reality, retailers are learning to innovate – looking at new ways to engage with audiences and understand the changing consumer dynamics that are determining the way they shop.
So here we have a look at some of the key consumer trends that have already impacted the way brands and retailers approach product positioning and marketing, as well as some of the new retail challenges and (and opportunities) you should be aware of now - before it’s too late!
The Millennial Market
The story of the millennial is only too familiar to readers of The Drum. Born between the early 1980s and early 2000s, these guys are digital natives who have grown up and matured with mobile technology and as such expect to be able to use it in every aspect of their life. Constantly on a variety of social media platforms to document their every move, and updating their profiles to project how they’d like to be seen by the world, the convenience of the mobile device is paramount to this group. And unsurprisingly the UK’s 14 million strong millennial population are more likely to start and end their journey on their smartphones than any other age group, who have started turning their mobile device into a handheld wallet.
Improving the payment experience through self-checkout kiosks and advanced digital payment technologies is essential to keeping the millennial shopper. The relentless focus on perfecting technology has set a new standard across the industry that millennials now accept as the norm. Retailers must be able to provide streamlined, user-friendly systems and processes in order to retain the millennial.
However, the challenge doesn’t end there for retailers, as a personalised retail experience is equally key. Whether this is online or in-store, millennials seek customer service professionals who understand their preferences and make recommendations tailored to their specific needs. Millennials want a customer-centric experience in which they feel wanted and valued. In order to do this, retailers need to closely examine what they’re currently doing with customer data, and ensure this information is being utilised to deliver a more personalised in-store experience.
The Conscious Consumer
Over the years, as manufacturers have looked towards cheaper and quicker ways of getting their products to customers, retail manufacturing practises have taken a serious toll on the environment. Second only to oil, the retail manufacturing industry is the most polluting industry on the planet. However, increasing awareness around these issues – thanks largely to the growing influence of the millennial audience (yes, those guys again) – has given rise to the conscious consumer.
Loosely speaking, being a conscious consumer means shopping and consuming with greater thought given to aspects of the product and business you’re buying from. For example, are they Fairtrade? Are their products responsibly sourced? And are they environmentally friendly? Ultimately this group aim to seek out ways to make positive decisions about what to buy and look for a solution to the negative impact consumerism is having on the world.
Another key concern for the conscious consumer is the way in which brands target audiences, both through advertising and the positioning of their products. As products and services expand to reflect the rich cultural makeup of the population, advertising efforts can be observed leading with non-centred perspectives that fall in line with a view to omni-culturalism, whereby effectively celebrating difference as the only norm. This progression demonstrates the need for brands to engage consumers around values less tied to traditional markers of identity such as race, geographic location and gender.
The Power of Omni-Channel
The omni-channel approach defines the new way in which consumers shop: by using all the options available to them. It could be using a desktop, laptop, tablet, smartphone, smart TV; they might go direct to a website to research a specific product or arrive through affiliate channels or email; engage through review platforms, apps, etc.
In the UK shoppers say that social media has an influence over what they buy – under 25’s – 60% and 25-34 – 50%, while conducting prior online research on the retailer’s own site or sites of other retailers led to 13% greater in-store spending among omni-channel shoppers.
Although not a retail strategy, it’s still essential to understand the multiple methods people use in their path to purchase as, ultimately, the more channels customers use the more valuable they are! A recent Google study found that omni-channel shoppers are three times more valuable to a brand, with Macy’s stating it is in fact as high as six times.
With the rise of geo-tagging and GPS-connected applications, location-aware marketing becomes increasingly targeted. Engaging consumers by creating a more personalised form of brand interaction, location-based sharing taps into the tech-savvy demographics' desire to connect with their surroundings digitally. This omni-channel approach to consumer engagement denotes an evolution in how brands are targeting younger demographics.
Gartner predicts that by the year 2020, 85% of customer interactions will be managed without a human and that 30% of web browsing sessions will be done without a screen by 2020. ComScore thinks 50% of all searches will be voice searches by that point. Voice user interfaces (VUI) provide consumers with a more natural and intuitive way of engaging with digital technology. This combined, with the growing popularity of connected devices in the home and car, will have a profound impact on how we shop.
Apostolos Lambrianides is group marketing and PR manager at Lick Creative