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 habits. Unsurprisingly, this has dramatically changed shoppers' marketing landscape, and as a result, retail brands are being forced to rethink how they interact with consumers.
We've seen changes in routines, homes and priorities - people had to make choices, learn to get creative and try something new to save money. It is difficult for retail brands to balance these factors. This next cohort of consumers is under financial pressure and needs a tailored approach to ensure that the value of the products offered is clearly communicated.
Our most recent research, from our next-gen cultural insights platform The Move – powered by a globally diverse, hyper-engaged community – surveyed more than 600 people and identified three new shopper cohorts consistent with this shift in mindset and behavior. These groups are:
- Forced to choose -These consumers feel the greatest pressure from the rise in the cost of living. They have to choose between sticking with preferred brands or trying something new to save money. As this group chooses to hold or switch, brands must prove their true value to consumers in order to win.
- Get creative —This group of shoppers wants to get creative in how they budget, shop, entertain themselves or find moments of escape. Retail brands should tap into their need for inspiration to encourage this group to choose them over competitors.
- New Generation Scammers —We are increasingly seeing consumers embrace 'side business' not just 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 reducing downtime easier and more fun. With limited moments to themselves, they focus more on maintaining their mental and physical well-being - brands that are their allies to get through the day, the week, parenting or even just work-life balance are likely to be high on their list. And not only from the point of view of practical product features, but also in terms of certain moods.
Creativity can help retail brands stand out from the competition
Being front and first in the cart has never been more important for retail brands. It's also never been more challenging. Creativity is key to successful brand differentiation 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, especially when it comes to shopper marketing.
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This can be an easy trap given the plethora of marketing performance data and purchasing data available in the space. Third-party cookies and daily insights into consumer behavior enable retail brands to build a dynamic consumer profile. But having this data at your fingertips shouldn't come at the expense of creativity, because that's what will grab the attention of the audience and resonate with them. Some of the best campaigns I've seen combine both aspects to effectively influence culture for consumers looking to buy.
Budweiser's UEFA Euro 2020 and FIFA World Cup 2022 campaigns expertly combined a strategy to tap into the mood of the country while being part of the culture to create more credibility and authenticity in the football fandom. By embedding the brand in football culture, Budweiser was able to stay relevant throughout the tournament with merchandise that became synonymous with the Three Lions campaign.
On the other end of the spectrum,Ikea turns to collaborationsto create new interest and relevance with partner brands such as Adidas. By having a deep understanding of its product and offerings, Ikea understood that it could reformulate 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 furniture.waste campaign in 2021and then thelife collection in 2022.
The retail brands that embrace creativity differentiate themselves from competitors and win the hearts and minds of new consumer groups.
How retail brands can influence future generations
A lot of attention is paid to Gen Z and beyond. With a spending limit of$360 billion in disposable income, it is understandable why retail brands want to influence this generation. This interest will only increase with future generations, but how difficult is it to influence them?
Personally, I don't think one generation is necessarily more difficult to influence than the other. Instead, it's about understanding what drives people, what scares people, and what people miss, and then figure out your brand's role in that. However, this logic should be applied to all generations, as it is important to put yourself in the shoes of a specific audience, especially as we see more and more micro-communities emerge within each generation, each with different needs.
When it comes to the younger generations, however, it's crucial for retail brands to recognize that these groups are more informed and tech-savvy than ever and have the advantage of learning from generations before them. A general trend is that younger generations (Gen Z, Gen Alpha and even millennials) are more skeptical of brands and value honesty and transparency.
According to aKanter's report, 60% of Gen Z value brands that are honest and sincere. Further research from McKinsey shows that 81% of Gen Z are willing to switch brands if they find a better alternative or if the brand doesn't meet their expectations. With this in mind, brands need to be more mindful of their audiences and offer products that provide real value.
As we look to the future, retail brands need to be hyper aware of the values and priorities of these groups. The three new shopper cohorts that align with this shift in mindset and behavior can indicate how brands should position their marketing strategy to achieve the best breakthrough.
Where is customer loyalty?
Customer loyalty is always a hot topic. The ultimate goal of 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 that people regret if they don't have one in their lives. However, not many brands achieve this, especially given the financial tightness that many consumers are currently feeling. When loyalty happens, it's because those brands have found a way to be relevant in the consumer's lifestyle and culture rather than "just another product doing this".
A look at the future
It's hard to say what the future of shopper marketing will look like. The unpredictability of recent years is sure to persist, and it is likely that further major events will once again shake up routines and priorities. For now, we think these cohorts are likely to be around for a while. And we can even see people move from one to another as their situation changes. It is important to understand that not everyone shops and makes purchasing decisions in the same way, despite the macro trends we see.
Retail brands will need to tailor their approach to address not only these groups, but also their specific audiences, to ensure they deliver value to consumers and respond to the needs and concerns that most impact their lives.
Kelly Badal is Director of Strategy atrich. With over 10 years of experience developing insight-driven creative and commercially successful strategies, integrated campaigns, activations and consulting projects for a wealth of well-known brands, Badal has built strong skills in account management, people management and team leadership. Clients include AB InBev (Budweiser, Stella Artois, Corona) worldwide, Pernod Ricard Global Travel Retail (Absolut, Jameson), Christian Aid, Transport for West Midlands, West Midlands Trains (WMR & LNR), Frey chocolate, Zespri and ZX Ventures ( Sharpwater).
FAQs
What is a touchpoint in retail? ›
Touchpoint definition: A touchpoint is any time a potential customer or customer comes in contact with your brand–before, during, or after they purchase something from you.
What do customers look for in retail stores? ›Customers want courteous, informative, helpful & friendly store personnel that engage in their needs. Convenience – easy selection & easy access to goods: Stores that provide good ambiance & convenience to their customers are easy places for customers to shop.
What percentage of shoppers go into the store with an idea of what they want? ›Inspiration. Nearly 80% of shoppers will go to the store to buy when they have an item they need or want immediately.
What type of retailing offers considerable product depth for just a few lines or even a single line of products? ›Specialty-line retailer - A limited-line retailer that carries only one or two product lines, but offers substantial depth and expertise in those lines.
What are the 5 brand touchpoints? ›Our five consumer touchpoints include the brand promise, brand story, innovation, purchase moment, and consumer experience.
What might be a good example of a customer touchpoint? ›Customer touchpoints are the moments of customer contact throughout the customer journey. For example, a customer may interact with your brand while searching your website, via your social media channels, shopping at your store, or chatting with your customer service team.
What are the three types of shoppers? ›If you look at their needs, you can identify 3 types of shoppers. Fast shoppers – they want to complete the purchase as quickly as possible. Value shoppers – looking for the best price for any products. Inspiration shoppers – they want to discover new products.
What are the 4 types of customers? ›- New customers. Newcomers are always going to have a few questions about how things work but might not always know how to ask. ...
- Impulse customers. This customer is quick to buy when something catches their eye, but aren't always the best at reading the fine print. ...
- Angry customers. ...
- Insistent customers. ...
- Loyal customers.
The four gold standards of retail marketing are product, price, place, and promotion.
What are 4 things smart shoppers do? ›- Avoid impulse buying: ...
- Focus on saving when shopping: ...
- Think before you buy: ...
- Take advantage of everyday savings:
What is the value of shopper marketing? ›
Effective shopper marketing optimizes your brand strategy for today's complex retail ecosystem. Ultimately, the goal is to produce more cost-effective marketing, improve ROI, and better resonate with shoppers. Shopper Marketing strategies often include: A promotional incentive.
Which aspect of social shopping is most important to shoppers? ›Today's shoppers place a high value on inclusiveness in their purchasing decisions too. Unsurprisingly, the younger generation values inclusivity the most. Inclusiveness is vital to 73% of Gen Z and 72% of Millennials when making buying decisions.
What are the 4 types of retailers? ›The four primary types of retailer formats are department stores, supermarkets, specialty stores, and online retailers. Department stores: These are large stores that sell a wide variety of merchandise. Department stores typically have several departments, each selling a different type of product.
What are the three areas of retail that are defined in new retail? ›- Supply chain and distribution logistics.
- Value-added services to producers and retailers.
- Integrated shopping experiences for consumers.
What is the rule of 7? The rule of 7 is based on the marketing principle thatcustomers need to see your brand at least 7 times before they commit to a purchase decision. This concept has been aroundsince the 1930swhen movie studios first coined the approach.
What is a touchpoint strategy? ›A touchpoint is any interaction between a customer and a product, brand, business or service. A touchpoint can be either physical or digital (e.g. a call to customer support or your company's website). A touchpoint strategy defines what these touchpoints need to entail to realize your envisioned service.
How can you create effective touch points with the customer? ›- Thank You Letters. One effective way to build customer rapport is by following up with a thank you letter. ...
- Product Feedback Surveys. ...
- Upselling/Cross-selling Emails. ...
- Billing Actions. ...
- Subscription Renewals.
Customer touchpoints are interactions between a business and a customer throughout the customer's journey. Identifying key customer touchpoints helps companies determine opportunities to improve their customers' journey. Touchpoints affect your customers' experience and their perception of your brand.
How increasing customer touchpoints can help improve customers? ›Customer touchpoints are where customers interact with your brand, product, service, etc. Developing an understanding of each touchpoint means that you can design better user and better customer experiences.
What are the 5 types of shoppers? ›- Discount seekers.
- Wandering customers.
- Impulse buyers.
- Need-based shoppers.
- Loyal customers.
What are the 8 types of shoppers? ›
We've put together information on the eight most common types of shoppers: Bargain Hunters, Browsers, Showrooming, Impulse Buyers, Mission-Driven, Indecisive, Educated, and Loyal customers.
What are the six types of social shopper? ›What drives each of these six types of social shoppers says Leo Burnett? Indulgence (Savvy Passionista), Impluse (Opportunistic Adventurer), Information (Quality Devotee, Strategic Saver), and Utility (Efficient Sprinter, Dollar Defaulter).
What are the 4 main customer needs in business? ›There are four main customer needs that an entrepreneur or small business must consider. These are price, quality, choice and convenience.
What are the 4 stages of getting customers? ›There are typically four stages of the customer journey: awareness, consideration, decision, and loyalty. Each stage has its own set of challenges and opportunities for marketers.
What are the 4 steps of a customer? ›No two customers are ever alike, so train your team to follow these 4 simple steps to GIVE exceptional customer service: Greet, Interact, Verify and Express Thanks.
What is the rule of 3 retail? ›The rule of three is exactly what it sounds like: grouping products together in sets of three. For instance, a store owner may set up three mannequins displaying apparel and accessories instead of just one or two. It may sound a little unusual, but this simple rule can yield yield more sales in a retail store.
What are the three C's of retail? ›The three Cs of customer satisfaction: Consistency, consistency, consistency | McKinsey.
What are Level 3 retail responsibilities? ›Level 3 employees are those who have a high level of skill and experience in the retail industry. They are often responsible for managing a department or store and may oversee the work of other employees. Level 4 employees are those who have the highest level of skill and experience in the retail industry.
What are 3 ways to be a smart consumer? ›- Buy products that have long life spans – avoid disposable items.
- Buy products that have minimal packaging.
- Buy products in their concentrated form.
- Buy only what you need. Consuming less, you dispose of less waste.
- Consider buying in bulk for those necessary purchases.
- Ask yourself if you need it. This first point is vital. ...
- Always compare prices. The Internet makes it's easy to compare prices at different outlets. ...
- Take advantage of points or rewards. Smart shoppers look for the best possible deals, without forgoing quality. ...
- Look at reviews. ...
- Make purchases securely.
How can I be a better shopper? ›
- Explore, inventory, and know what you already own. ...
- Buy what you'll use and use what you have. ...
- Don't buy what you won't use now (with a few exceptions). ...
- Cancel email sale blasts. ...
- Wait at least 20 minutes before buying.
Shopper marketing strategy is an essential component of any successful marketing plan for consumer packaged goods (CPG) brands. This approach involves targeting shoppers at the point of purchase through effective campaigns, promotions, and product displays.
What makes a good personal shopper? ›Strong communication skills and active listening skills help personal shoppers build rapport with clients. Being able to present yourself well, pitch your skills and demonstrate good time management skills is essential. With clothes shopping, knowledge about tailoring and garment assembly is also helpful.
What are the characteristics of a value shopper? ›Value shoppers are the savvy buyers, the ones always on the lookout for the best deals and who knows where to find every discount and coupon. If you're an e-commerce retailer, the importance of understanding your value shoppers can't be overstated.
What are the main factors shoppers will consider before buying? ›The consumers consider various things like the characteristics of the product, price charged, availability of the product at the required location and much more. The personal factors include age, occupation, lifestyle, social and economic status and the gender of the consumer.
What are 3 social trends shaping consumer values and shopping behavior? ›What are some important social trends shaping consumer values and shopping behavior? Thrift, greener consumers, marketing to children, privacy concerns, and time-poor societies.
What are the three main ways of attracting the attention of online shoppers? ›- Collect qualitative data by promoting organic content. Your most loyal customers want to engage with you -- so why not reward them for it? ...
- Invest in a good social CRM. ...
- Attract traffic with a competition.
- Apparel and accessories. ...
- Consumer electronics. ...
- Books, movies, music, and games. ...
- Health, personal care, and beauty. ...
- Food and beverage. ...
- Auto and parts. ...
- Furniture and decor.
- Same Product, Lower Price. ...
- Different Products With Different Attributes. ...
- Hold Your Positions Through Defensive Strategies. ...
- Pool Resources Through Strategic Alliances.
- Product. First is the Product, which is the physical item that's being sold.
- Price. The second is Price, which refers to the pricing strategy that the merchant uses to sell the item. ...
- Place. ...
- Promotion.
What are 3 examples of a retail business? ›
Examples of retail businesses include clothing, drug, grocery, and convenience stores. Now that you understand what type of store falls under the definition of a retail business, you might be wondering how to actually go about starting one.
What is a retail store and give 3 examples? ›Retail is the process of selling goods directly to the consumer, usually in a shop or online. Examples of retailers include supermarkets, department stores, specialty stores, convenience stores, and online stores.
What are the three most important retail channels? ›- Retail stores.
- Online retailing.
- Catalog retailing.
- Direct selling.
- Television home shopping.
- Automated retailing.
There are 5 components in a retail strategy: scope, goals and objectives, resource deployment, a sustainable competitive advantage, and synergy. These 5 components help bring new customers to a business or help increase how much each customer already purchases.
What is the new retail model? ›New Retail (NR) is an industry term referring to the integration of online and offline shopping experiences. It is a fresh approach that seeks to make use of technology to create a seamless shopping journey.
What is the meaning of touchpoint? ›A contact point between an enterprise and its customers. Touchpoints may occur in any channel (e.g., via phone, the Web or direct contact with a salesperson).
What is the purpose of a touchpoint meeting? ›A touch point meeting goes beyond a simple one-on-one meeting. You'll typically schedule this type of meeting to briefly check in on a team member's progress toward their goals. These meetings can be virtual or in-person, as long as you and your team member can both see each other.
What is a touchpoint in the workplace? ›It is the sum of everything an employee experiences throughout his or her connection to the organization—every employee interaction, from the first contact as a potential recruit to the last interaction after the end of employment.
What is touch point definition? ›touchpoint noun [C] (CONTACT)
an occasion when a business or an organization is in contact (= communication) with its customers, etc. or meets them, or a method of communicating: The updated logo will be visible across all guest touchpoints, from check-in to boarding gate and on to the aircraft.
Customer touchpoints are interactions between a business and a customer throughout the customer's journey. Identifying key customer touchpoints helps companies determine opportunities to improve their customers' journey. Touchpoints affect your customers' experience and their perception of your brand.
What are the customer touchpoint stages? ›
Optimizing Consumer Touchpoints in the Customer Journey
The customer journey has five stages: customer awareness, consideration, decision, action, and customer loyalty (retention and advocacy).
First touch point marketing is a fancy way of saying 'a customers first experience with your brand'. A potential client usually interacts with a brand numerous times before reaching out or purchasing. For conversion, it is incredibly important that their first interaction with the business is powerful and positive.
What is a weekly touchpoint? ›A weekly touchpoint with your team helps to ensure alignment and provides a great forum for communication and collaboration. Use this free weekly team meeting agenda template so team members can prepare beforehand and capture important notes for later.
What are in store touchpoints examples? ›Examples of customer touchpoints
If you have a retail business, for example, your buyer's journey might include touchpoints such as an advertisement, a visit to a website where they're directed through a sales funnel, a visit to a store where there's a human interaction, and so forth.
High-touch points are areas touched by numerous people throughout the day, increasing their risk of contamination. High-touch points can be major culprits in the spread of bacteria and pathogens in offices, schools, and other business facilities. Every type of facility will have slightly different high-touch points.
What are the four major type of touch points? ›- Physical touch points. ...
- Digital touch points. ...
- Print touch points. ...
- Human touch points.
Customer value is best defined as how much a product or service is worth to a customer. It's a measure of all the costs and benefits associated with a product or service. Examples include price, quality, and what the product or service can do for that particular person.
What is not a customer touchpoint? ›Channels are Not Touchpoints.
Channels are a way for you to understand where customers come from and how they interact with you, the company. Touchpoints are more precise and specific. For example, Online could be a channel. Online chat could be a touchpoint.