Arvind Sharma leads Retail & CPG Vertical, and Digital Commerce at Ciklum and has more than 19 years of cross-industry experience. Since 2009, he has been working with clients on digital business transformation programs, primarily in the Retail, Consumer Goods and Manufacturing sector.
Consumer industries face an unprecedented moment as fallout from the COVID-19 pandemic transforms B2C markets in real time. The impact of the crisis has accelerated existing consumer technology trends while introducing entirely new consumer habits that will have a lasting effect on the global economy.
The characteristics of modern consumers have not changed, but the economic constraints and physical limitations they must manage have forced them to abandon certain habits and embrace others. Many of these new habits will last for years to come, especially around such growing consumer priorities like health and safety, social responsibility, and more sophisticated personalisation. Combine these changes with the fact that modern consumers are under greater financial pressures than ever before, and retailers face a competitive, unpredictable marketplace.
But among these challenges are opportunities for forward-thinking B2C brands willing to embrace and respond to consumer change. Ciklum can help you understand new consumer priorities and expectations, then adapt your technologies and business strategy to respond to new demands. Here’s a closer look at recent consumer behaviour and what that means for the future of your company.
Even before the COVID-19 crisis, consumers were under growing financial pressure that has impacted their spending habits. What’s more, consumers increasingly embraced digital commerce for a broader range of products and services—from ride sharing to home delivery of their groceries—before COVID-19 began its spread. Here is a closer look at consumer habits before and after the onset of the global crisis.
eCommerce Adoption Skyrockets Amid COVID-19
eCommerce climbed 15% in 2018 and reached US$517.4 billion in 2019. As B2C companies move to meet this demand, consumers have access to a wider range of competitive product options and entirely new business models: grocery delivery services or subscription models for nonperishable household items, such as toilet paper, laundry detergent, and air filters.
As consumers became confined to their homes, adoption of online commerce and an expectation among consumers for retailers to meet them on their terms have grown. Most consumer categories have seen more than 10% growth in their online customer base during the pandemic, McKinsey reports.
Now, “consumers’ attitudes, behaviours and purchasing habits are changing—and many of these new ways will remain post-pandemic,” PwC predicts. This especially applies to those growing eCommerce categories where online activity has traditionally been low and hybrid models, such as curbside pickup, which has grown in popularity amidst social distancing.
Consumers Embrace Social Progress through Retail
Perhaps most importantly, consumers are more educated and socially aware at larger scales than at any point in history. Consumers themselves are more racially diverse than past generations. They are more educated — with more frequent access to social, cultural, and news information — and more adapted to the real-time capabilities of connected digital environments. This is driving increased action among retailers to do more than sell products, as Deloitte describes:
Millennials, for example, are more likely to pay more for products that do not negatively impact the environment, and they are more likely to buy products from companies that are proactive about social issues that matter to them as well. Companies that adopt policies and technologies in response to these inclinations are better positioned to succeed long-term, especially in the face of such global crises as climate change or COVID-19.
Consumers Will Exchange Data for Better Experiences
Finally, as Deloitte indicates, consumers are more interested in B2C companies willing to build meaningful, purpose-driven connections with their customers and capable of being more responsive to their unique needs. Most consumers (86%) will trust companies with their personal data if those companies show it allows them to provide better experiences, Deloitte reports. Consumers are increasingly likely to participate or collaborate with companies in the development of new products and services as well.
It’s in these unique changes—eCommerce adoption, social awareness, and expectations for personalization based on the use of their personal data—that B2C companies can find future business advantages. But realizing those advantages hinges on companies’ ability to (a) embrace purpose-driven strategies and (b) adopt the right technologies to make them a reality.
Gaining a Competitive Edge with New Digital Tools
Fortunately for ambitious B2C companies, consumers’ shift to digital has put those consumers in a position to experiment with new brands and products more than ever before. Now, 50% of consumers are trying new brands or products, PwC reports—even during the crisis.
With the right technologies, companies can embrace these changes and act on these opportunities for long-term customer loyalty and growth. Here’s a closer look at three critical technologies for the future of consumer industries.
Enhanced eCommerce Capabilities
As consumers become more comfortable with online shopping in a variety of categories, brands must adopt more dynamic, sophisticated eCommerce capabilities to enhance customers’ experiences on their digital properties. This may include personalisation features to entice customers, AI-driven on-page search to help customers find the right products, and AI-driven chat or customer service capabilities that ensure customers get answers and results without leaving an eCommerce website or app. A retailer’s ability to identify their customers’ unique needs and adopt technologies that meet those needs effectively without causing friction or forcing customers to go to different channels are more likely to retain their eCommerce shoppers.
Data Collection and Predictive Analytics
As indicated, consumers are more likely to exchange personal data for more personalised experiences with their favourite brands. Retailers who invest in tools to help them collect and proactively act on customer data are more likely to provide for customer needs and desires in the long-term. But retailers must be prepared to share how and for what purpose they are using their customers’ data at any given time—a growing expectation among modern consumers.
Retailers should also use this data to align their brands with broader initiatives their customers care about, such as social movements or global health initiatives. Grocery brands that align themselves with initiatives to end world hunger, for example, may find consumers are more likely to align with them over competitors with similar consumer products and services — and consumers may even participate in those initiatives.
Customer Experience Automation
Automated tools, especially as part of the customer experience, are becoming more sophisticated. Today, automation is an inevitable part of growth and a growing necessity for consumers who expect intelligent technological capabilities among their favourite brands. These technologies and the experiences they provide will differentiate “favourite” brands from others.
Retailers can leverage customer data and AI-driven technologies to provide more personalised, more direct experiences for customers, eliminating customer service wait times and enabling consumers to make progress without the assistance of humans. Automation in loyalty, discounting, and sales programs will facilitate more equitable, lasting relationships between B2C brands and their customers.
The Future of Retail Is Human
Consumers have made their sentiments clear, and now it is up to the companies they love to create the retail future they want and enjoy. As we may find, digital tools can go beyond increasing efficiencies and improving customer service metrics, connecting customers and brands to deeper human causes and more purpose-driven relationships in the future.
Ciklum is a global digital solutions company, delivering innovative technologies and ideas to both fast-growing and Fortune 500 B2C brands. Discover how our solutions are different, helping you shape your digital future and your future relationships with customers—contact us today.