The worlds of retailing and marketing are in the midst of a period of change the likes of which haven’t been seen in generations. Advances in technology and the evolution of connected consumers has led to shoppers who are more empowered than they have ever been and this has dramatically changed the balance of power between shoppers, retailers and manufacturers. I have outlined below some of the overarching shopper marketing trends which are having a significant impact on the shopper marketing industry and which all of us involved in the marketing of consumer goods products must be aware of. What must be remembered, of course, is that consumers and shoppers are not homogeneous and some trends will undoubtedly have a greater impact in certain categories. As with all things shopper marketing related, when looking at the impact these trends may have on our own brands or categories we must always start with defining and prioritizing who our target consumer is and identifying the shoppers who hold the key to unlocking these consumption opportunities.
Shopper marketing trends 1: Health & Wellness
The growing trend towards healthier eating is one that is here to stay for the foreseeable future and appears to be more a genuine shift in consumer habits, rather than a short-term fad. As consumer confidence and disposable income continues to rise, shoppers will be prepared to spend more for food they deem to be better for them, so expect to see this trend continue to gather pace in 2016.
Much of this desire for healthier options stems from a growing distrust among consumers of ‘Big Food’. There have been countless exposés on the processed food industry in recent years and we are becoming increasingly suspicious of ingredients we can neither spell nor pronounce. Sugar is currently the New Public Enemy Number One and just this month, in the UK, the NHS released the Sugar Smart app, which allows shoppers to scan the barcodes of products to reveal the number of sugar cubes contained in them, and whether this exceeds the maximum daily amounts of added sugar.
The proliferation of new media channels and access to information at our fingertips, means shoppers are now armed with more information than ever before, with everyone from doctors and chefs through to soap stars and models all telling us what we shouldn’t be eating. The accuracy of all of this information is really irrelevant; the fact is that shoppers are hearing it from people they deem to be trustworthy so it is having an impact on how they are shopping.
If you look around your local supermarket, you will see some noticeable changes from a few years ago and the ‘Free-From’ range will undoubtedly have grown significantly. Where once this section was only sought out by those with food allergies, it is now a destination for a growing number of shoppers out of choice, due to the perceived health benefits switching to products from this section will bring. We are also seeing the traditional centre of the store, dominated by major FMCG companies, shrinking, with many shoppers turning to perceived natural alternatives and fresh produce around the perimeter of the store.
This trend will lead to more FMCG companies re-evaluating their portfolios in order to cater for the changing needs of their consumers and shoppers. A growing number of established brands will undoubtedly move into the ‘Free-From’ category while ‘Big Food’ companies will also buy up small natural food companies whose products appeal to shoppers looking for healthier options and which give them a presence in areas towards the perimeter of the store that are becoming more important.
Shopper marketing trends 2:Â Reducing the Friction
As consumers and shoppers, we love when people make things easier for us. You don’t often hear people complaining about something being too convenient. The success of apps such as Hailo in the taxi world, Hassle in the cleaning world and even Tinder in the dating world owe their success primarily to the fact that they massively reduce the friction involved in a process.
One area which is reducing friction in the shopping world is the evolution of social commerce. Facebook, Twitter, Instagram and Pinterest have all experimented with ‘Buy’ buttons allowing users to buy directly from their platforms with companies such as Shopify making this a seamless user experience.
Another online giant focused on reducing friction from the shopping process is Amazon, through their Amazon Dash ordering service. This service consists of three different components, each of which increasingly reduce the friction in shopping: Amazon Dash Scanner, which allows you to say or scan an item to automatically add it to your online shopping cart; The Amazon Dash button, which reorders products at the push of a button; Â The Dash Replenishment Service which enables connected devices to automatically reorder when supplies are running low. With an ever growing number of devices becoming part of the Internet of Things automatic replenishment services such as this are undoubtedly going to become more commonplace in the years to come.
This new age of virtually frictionless shopping demonstrates the ever-increasing blurring of the lines between consumer and shopper modes, where we can switch from being in consumption mode to shopping mode and back again in a heartbeat. It also has profound implications for both retailers and manufacturers alike. For retailers the growth of automatic replenishment and online subscription mean that shopping trips will become increasingly fragmented and basket sizes will get smaller. For suppliers it can be either a blessing or a curse. If your product is the one being automatically reordered, then you can be confident of a loyal customer for a prolonged period of time. Conversely, if it is a competitor’s product on the list, your opportunities to influence their purchasing occasions have now been dramatically reduced, making the value of each of these opportunities far greater.
Shopper marketing trends 3:Â Authenticity
A number of factors have led to a growing desire among consumers and shoppers for authenticity from the brands they engage with. This is something which goes way beyond health related categories and permeates almost every category we consume or shop in, even those deemed to be unhealthy, such as alcohol or fast food. The fragmentation of traditional media and evolution of platforms which enable consumers and brands to converse directly with each other has resulted in consumers placing more trust in those brands that we deem to reflect our values, linking our personal identities to the brands we buy and consume. If we look at the two ‘unhealthy’ categories I mentioned, the phenomenal growth in the craft beer category in recent years has been very much driven by this trend, while we are seeing a host of new quick service restaurants appear who claim to offer a different fast food experience. A great example of this is ‘Shake Shack’ which started out as one food cart in New York in 2000 and has now grown across the US and Internationally with an average store performance more than double that of McDonald’s in the US. Their motto of ‘Stand for Something Good’ resonates with their target consumers and is demonstrated by their ethical sourcing of produce, sustainable design and community support projects. One thing that these examples have in common is that brands in these sectors have been able to position themselves at a higher price point than their established competitors in their respective categories, demonstrating that shoppers are prepared to pay more for brands they identify more closely with.
The magnitude of the problem this appetite for more authentic brands presents for large FMCG companies should not be underestimated. In the US, since 2009, the top 25 food and beverage companies have lost an equivalent of €18 billion in market share. Speaking on the topic, the CEO of Campbell Soup Co. in the US said, ‘’We understand that increasing numbers of consumers are seeking authentic, genuine food experiences and we know they are sceptical of the ability of large, long-established food companies to deliver them.’’ For many shoppers, a brand’s identity, provenance, ethical considerations and ability to articulate their story convincingly will have a growing influence on the brands they purchase in the coming years, so all brand manufacturers must assess the impact this is likely to have amongst their target consumers and shoppers.
Shopper marketing trends 4:Â Digitising the In-Store Experience
There are a number of factors pointing to 2016 being a year where the digitisation of physical stores gathers pace in Ireland. On a macro level, the recovering economy and increased spend at retail has meant that retailers of all sizes, across a wide range of sectors, have started to invest more in much needed store re-fits after years of, in many cases, simply trying to stay afloat. Decreases in hardware costs have also reduced a barrier to entry for a number of smaller retailers. Digital signage is also now a much more dynamic, disruptive technology offering a variety of benefits above and beyond simply broadcasting messages. Constant connectivity and advances in software enable content to be changed based on factors such as time of day, stock levels or even the weather; Interactive screens can blur the lines between offline and online worlds and extend the product range; self-service kiosks can empower customers and often lead to an increased spend from shoppers who use them, while facial recognition software can lead to increased personalization. Digital signage and mobile also interact extremely effectively with both technologies enabling retailers to gather valuable data with each engagement which can help to unlock insights on shopper behaviour. NFC and Beacon technology can also facilitate the delivery of hyper-local targeted messaging to shoppers while they browse the aisles.
I don’t anticipate huge advances in mobile payment options this year for a couple of reasons. Firstly, I think there are still so many parties wanting a slice of the pie and to control the data that it is difficult to see a stand-out solution appearing which will lead to mass consumer adoption. Secondly, until such a time that mobile payment becomes an option in a wide number of stores, it doesn’t really reduce the friction for shoppers as it is no easier than using the debit or credit card which they will still need for the majority of their shopping trips. I do think, however, that we will see steps in this direction this year with an increasing number of loyalty cards going mobile. I’m sure many of us have turned down the offer of a loyalty card recently as the last thing we need is another card to weigh down our key chain or fill up our wallet. Loyalty cards have now, ironically, gotten to a stage where they have become a deterrent to signing up for a loyalty program. There are no reasons why mobile loyalty cards cannot be implemented by the majority of retailers independently and this would certainly serve to improve the shopper experience and provide infinitely superior opportunities for shopper engagement.
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