Business In News
COVID, Brexit, and more recently the war in Ukraine, along with a cost-of-living crisis have caused 80% of shoppers to change their purchasing behavior. Unsurprisingly, this has dramatically changed the shopper marketing landscape, and as a result, retail brands are being forced to rethink how they interact with consumers.
We have seen changes to routines, homes and priorities — people have had to switch up choices, learn to get creative and try something new to save money. For retail brands, trying to balance these factors is difficult. This next cohort of consumers are financially strained and require a tailored approach to ensure that the value in the products on offer is clearly communicated.
Our latest research, from our next-gen cultural insights platform The Move — powered by a globally diverse, hyper-engaged community — surveyed over 600 people and has identified three new shopper cohorts in line with this shift in mindsets and behaviors. These groups are:
- Forced to choose — These consumers are feeling the biggest squeeze from the rise in the cost of living. They are having to choose between sticking with preferred brands or trying something new to save money. As this group are choosing to stick or switch, brands need to prove real value to consumers in order to win.
- Getting creative — This group of shoppers are looking to get creative in the ways they are handling their budgets, food shopping, and how they entertain themselves or find moments of escape. Retail brands should tap into their need for inspiration to encourage this group to pick them over competitors.
- New Gen hustlers — We have increasingly seen consumers embrace “side hustles,” not only as a passion but as a way to supplement their income. As a result, they are looking for retail brands that make juggling their finances and reduced downtime easier and more enjoyable. With limited moments to themselves, they have an increased focus on trying to maintain their mental and physical well-being — brands that are their allies in getting through the day, the week, parenting or even just work-life balance are likely to be high on their list. And not just from a practical product feature point of view, but also in terms of certain moods.
Creativity can Help Retail Brands Differentiate from the Competition
It’s never been more important for retail brands to be front of mind and first in the shopping trolley. It’s also never been more challenging. Creativity is the key to successful brand distinction and resonance, as everyone will be competing on price. For too long, retail brands have relied on copycat marketing techniques at the expense of creative approaches, particularly when it comes to shopper marketing.
This can be an easy trap to fall into given the abundance of marketing performance data and purchase data available in the space. Third-party cookies and daily insights into consumer behavior allow retail brands to build a dynamic consumer profile. But having this data at their fingertips shouldn’t be at the cost of creativity, which is what will actually grab the attention of audiences and resonate with them. Some of the best campaigns I have seen combine both aspects to effectively impact culture for consumers looking to purchase.
Budweiser’s campaigns for the UEFA Euro 2020 and the FIFA World Cup 2022 expertly combined a strategy of tapping into the mood of the nation while also becoming a part of culture to create more credibility and authenticity in football fandom. By embedding the brand in football culture, Budweiser was able to stay relevant across the whole tournament with merchandise that became synonymous with the Three Lions campaign.
At the other end of the spectrum, Ikea has been turning to collaborations to create new interest and relevance with partner brands such as Adidas. By having a true understanding of its product and offering, Ikea understood that it could reframe existing products to sell to new audiences. The brand’s understanding of how people use its furniture, and for how long, led them to enter the second-hand market with their trash campaign in 2021 and subsequently the life collection in 2022.
The retail brands that embrace creativity are setting themselves apart from competitors and winning the hearts and minds of new consumer groups.
How Retail Brands can Influence Future Generations
A lot of focus is placed on Gen Z and beyond. With a spending power of $360 billion in disposable income, it’s understandable why retail brands want to influence this generation. This interest will only increase with future generations, but how hard is it to influence them?
Personally, I don’t think one generation is necessarily harder to influence than another. Instead, it’s about understanding what makes people tick, what turns people off and what people are missing, and then figuring out your brand’s role in all that. However, this logic should be applied to all generations, as it’s important to get under the skin of any specific audience, particularly as we are seeing increasing micro-communities within each generation, each with varying needs.
When it comes to the younger generations, however, it’s crucial for retail brands to realize these groups are more informed and tech-savvy than ever and have the benefit of learning from generations before them. As an overall trend, younger generations (Gen Z, Gen Alpha and even millennials) are more skeptical of brands, valuing honesty and transparency.
According to a report by Kantar, 60% of Gen Z values brands that are honest and genuine, with further research from McKinsey suggesting that 81% of Gen Z is willing to switch brands if they find a better alternative or if the brand does not meet their expectations. With this in mind, brands have to be more considerate of their audiences and offer products that offer true value.
As we look to the future, retail brands need to be hyperaware of the values and priorities of these groups. The three new shopper cohorts that align with this shift in mindsets and behaviors can indicate how brands should position their marketing strategy to achieve the best cut-through.
Where Does Customer Loyalty Lie?
Customer loyalty is always a hot topic. The ultimate goal for a brand is to become the default choice for consumers and irreplaceable in their psyche. Look at brands like Heinz or Coca-Cola. For many, they are the only choice when it comes to certain products. They are brands people would be sad to not have in their lives. However, not many brands achieve this, especially given the financial pinch many consumers are currently feeling. When loyalty does happen, it’s because those brands have found a way to be relevant in the consumer’s lifestyle and culture rather than “just another product that does this thing.”
A Look to the Future
It’s hard to tell what the future of shopper marketing will look like. The unpredictability of the last few years will surely continue, and it’s likely that further major events will shake up routines and priorities again. For now, we think these cohorts are likely to be around for a while. And we may even see people move from one to another as their situation changes. It’s important to understand that not everyone will be shopping and making purchase decisions in the same way despite the macro trends we are seeing.
Retail brands will have to tailor their approach to appeal not only to these groups, but also their specific target audiences, to ensure they are offering value to consumers and addressing the needs and concerns that impact their lives the most.
Kelly Badal is Strategy Director at Impero. With more than 10 years of experience developing insight-led creative and commercially successful strategies, integrated campaigns, activations and consultancy projects across a wealth of well-known brands, Badal has built a strong skillset in account management, people management and team leadership. Clients include AB InBev (Budweiser, Stella Artois, Corona) globally, Pernod Ricard Global Travel Retail (Absolut, Jameson), Christian Aid, Transport for West Midlands, West Midlands Trains (WMR & LNR), Frey chocolate, Zespri and ZX Ventures (Cutwater).