The world has never been static and customer sentiments have always evolved in reflection of the changing nature of society. But a year of massive social upheaval has caused some of the largest shifts in consumer behaviour in a generation.
While coronavirus has had a profound effect on society, many of the changes began before anyone had heard of Covid-19. Digital transformation and declining trust in institutions were largely accelerated, not created, by the pandemic.
And ultimately, these were accompanied by increased social isolation, along with growing health and safety concerns. One of the end results of these trends is the rise of the purpose-driven, values-led consumer.
Notably, these consumers choose to spend their money with companies that reflect their values. As products, services and business practices become more standardised, purpose and values become one of the main ways to differentiate between companies and brands.
Furthermore, in an online world, where data flows more easily, projecting values cannot simply be an issue for the advertising or PR department. It must be embedded deep in an organisation’s core business model.
Vidili outlined the five trends she has observed across the last year as customer sentiments and behaviour have evolved and provides an insight into how companies can adapt.
A Changing Landscape
Digital technologies provided companies of all sizes with the tools to continue doing business despite multiple lockdowns. They also gave individuals the ability to stay in touch with each other, continue spending money and help keep the economy going.
While in the early days of the pandemic, digital technology provided a much-needed solution to an immediate problem, Vidili says it also has long-term effects on how we do business. Digital is now an integral part of our lives, and as such, companies will need to move away from using digital as a stop-gap and make it a central part of their business models.
“Digital convenience is not an option anymore – it’s a must have,” Vidili says.
“Companies must rethink their supply chain and logistics, their communications and their customer engagement. There’s a whole transformation – as they become more digital, companies will have to change their entire customer journey.”
Vidili has identified five distinct trends in customer sentiments and behaviour over the year of the coronavirus.
The first, she explains, is the growing role of the purpose-driven consumer. While not a new phenomenon, lockdowns and social isolation have given people an unprecedented amount of time to reflect on their priorities.
Even a recession has not driven these consumers second issues like climate change, the environment, and social inclusion in favour of commercial and financial concerns. All of these factors have contributed to the changing – and heightening – consumer expectations.
“The challenge is now for companies to actually look beyond profit,” Vidili says.
The second trend comes in the form of a new consumer focus on healthcare. As a public health crisis, the coronavirus pandemic has naturally driven many to prioritise their health and wellbeing.
“As we become more concerned about our health, we are considering what we’re buying and looking at the whole supply chain – where is this coming from, how long has it travelled.”
Similarly, the third trend focuses largely on safety. Vidili pointed to this manifesting as an increase in contactless technology and a decrease in human contact.
“Companies really need to start thinking how they can rethink their interactions with the consumer,” she says.
Trend four is a move towards convenience-driven purchases. As digital technology was integrated into our lives, many consumers have become used to the convenience it offers. This includes people that may have been put off from using digital technologies in the past.
“This means that when companies facilitate interactions with different consumers, such as young teenagers or elderly consumers, there’re a lot of different types of demographics and different capabilities.
“Companies will have to look at the ease of use of things in terms of product or customer interaction.”
The final trend Vidili identified firmly underlines the importance of digital experiences. This will see a move to a hybrid of physical and virtual worlds.
Crucially, this plays into the importance of convenience, as different customer journeys are created for different demographics, such as click and collect services. As such, moving forward Vidili says businesses must place a strong focus on integrating these two worlds “seamlessly” and more efficiently.
However, catering to a purpose-driven audience has its pitfalls. Just as some consumers focus more on issues such as environmental sustainability and diversity, others hold radically divergent, even antagonistic values, preferring freedom of choice and speech.
Take the backlash against plastic straws, for example. These became a target for anti-pollution campaigners and some companies stopped using them or offered alternatives. But a backlash against the backlash evolved, with some people actively using plastic straws and punishing companies that stopped using them.
Increasingly, companies are forced to navigate a fragmented and polarised value landscape. By appealing to one side, some may find they alienate another and find themselves faced with a boycott and significant consumer backlash.
“We used to target consumers on demographics and geographic locations,” Vidili explains.
“These days, marketing has completely changed. We’re targeting consumers based on generations – Millennials, Gen Z, Gen X and Boomers. These generations have their own set of values and beliefs.
“People want to see companies that have a voice. They want to see companies that stand up for something in society because consumers have said they don’t trust government institutions anymore.”
Another trend Vidili identifies is the growth of technology in consumers’ lives is making them feel more isolated.
“There has been an increase in depression and anxiety, and that means that people want to feel like part of a group.
“So, companies really have the power to embrace causes and to create groups and trust among consumers. And that’s why consumers want to feel that they want to buy from companies that share the same values.”
As consumer demands change, it is up to business leadership to create new strategies to meet them.
“Leadership really needs to think thoroughly about their brand purpose, their culture, and also their brand activism,” Vidili says.
“Once they do that, they can start building and earning trust from customers. They need to start moving away from profit-centric thinking and looking more into shared value strategies to contribute to all stakeholders and beyond. If they do that, they’ll start earning trust back and gathering and strengthening those customer relationships.
“We used to think that companies were soulless entities, but that’s not true. There are people involved. Leadership is people, employees are people, customers are people, we all have values and beliefs.
“That’s why, before going digital, we need to contemplate why are we in business, what are we selling, why do we want to sell this product, and why do consumers have to buy this product from us.”
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After identifying values, the natural progression is to utilise digital technologies. When creating strategies around these, it is important that they are customer centric.
“Businesses must integrate digital into their everyday customer interactions. And lastly, they really need to listen to customer expectations and adapt to these expectations.
“Consumers now have the power. It’s not just a marketing cliché, it’s the truth – they have the power to choose where to buy, when to buy and if to buy.
“Product-centric companies are not sustainable in the long term,” she notes. “Sooner or later, consumers will feel that they just want to buy from other companies. Customers will run away because they don’t feel they belong.
“One of the most important things is to try to balance the humanity and technology in a business. As technology becomes a bigger part of our lives, we don’t have to lose sight of human connection.”
DIGIT Leader 2021 Virtual Summit | Join the Discussion
Creating strategies to account for evolving customer sentiments and behaviour will be a key area of discussion at the fifth annual DIGIT Leader Summit, set to be held on the 26th May.
For more details and information on how to attend, please visit: www.digitleaders.com