By Anastasia Lloyd-Wallis
COO, Retail Doctor Group
As we move into 2022, the question on every retailer’s lip is, “What do our customers want this year?”
Consumer behaviour has been on a rollercoaster for the past two years, with more twists and turns than Harry Potter. There are some expected trends, such as the continued support for sustainability, whilst others are just out of the blue, e.g., the popularity of click and collect and the influence of Tik Tok.
It is now time to review what we have learnt in the last year and look to the future to see what we can predict about how consumers behave.
At RDG Insights, we have been gathering information on consumer behaviours from retailers and brands with the use of consumer neuroscience. The combination of “what” consumers have done and “why” they do it, helps us predict what we expect to see in 2022. More importantly, we will then be able to tell what retailers and brands can do to be on the front foot to deliver what their customers need both on a functional and emotional level.
Let’s take a high-level look at the key consumer trends we expect to see in 2022:
1.Time is a currency (on the rise since 2021) – Consumers now put a higher value on their time. They are looking for time well spent and time well saved. 75% of millennials say that it is important that stores save them time whilst shopping*. This trend is reflected through the rise of click and collect and subscription services. We expect this to continue with the emergence of AI to assist in creating a frictionless customer experience.
2. Retail as an activity (New Entrant) – 2021 was an underwhelming year for most consumers due to COVID restrictions, limited capability for enjoyment and fun, with many not wanting to risk making plans for events and holidays due to uncertainty. We are now entering 2022, the year of retail as an activity. Consumers are seeking ways to entertain themselves with minimal commitment and low expenses. They are interested in retailers who can create an experience worth leaving the house for. They prefer to interact with retailers who can deliver innovative experiences both in-store and online. These retailers are the likes of Walmart+, Mashable’s digital AR experience in the US, Mecca Maxima Flagship beauty haven in Sydney and Natura’s store’s art gallery in Brazil.
3. Loyalty programs (New Entrant) – There has been a rise in consumers shopping based on price. However, there has been a significant increase in brand loyalty for brands that deserve it and offer consumers exceptional loyalty programs and personalised experiences. 3 in 4 consumers, who are members of loyalty programs, say it influences their behaviour*. Nevertheless, customers are looking for more than collecting points to save money. The new breed of loyalty scheme tailors to consumers’ emotional drivers and their practical needs. Savvy retailers now look at their target segments’ personalities to understand what drives customers to get out of bed in the morning. These drivers can then be applied to entice them to return to a brand. RDG Insights division is frequently delving into consumers’ subconscious minds to understand their emotions, and how these emotions impact their loyalty to a retailer. This understanding helps retailers determine the influential triggers to increase customer frequency. Is your customer-driven by status, scarcity, excitement, or security? This will have a substantial impact on their interactions with your loyalty program.
4. The rise of social media (New Entrant) – 2021 was undoubtedly the year for social media, with 97% of Australian internet users accessing social media, according to Genroe. This rise made a splash in retail, with the percentage of consumers using social media to interact with retailers doubling across categories. Almost 2/3 of millennials use Facebook and Instagram to interact with a retailer, and 1 in 5 Gen Z consumers use Tik Tok in their journey*. Does this mean that all brands should be doing dance moves on Tik Tok? Well, not exactly. Our research shows that social media usage varies significantly for different personalities, not just age groups. Different consumers have different expectations from what they want to see on social media. Thus, it is vital to understand your customers’ emotional needs and invest in the appropriate channels, rather than waste valuable time and marketing spend on social media channels just because they are on-trend.
Whilst consumer behaviour is rapidly changing due to many factors, which can be outside of our control, the one thing that remains constant is that they are emotional beings. Their emotions drive 95% of their decision making, and their personalities remain stable whether they are 18 or 80! Thus, you first need to understand who your customers are and their emotional drivers. It could be status, security, care, action, fun, safety, reliability, or enjoyment. From this, you can then predict their future behaviours and how each trend may apply to them.
In this everchanging retail world, our future predictions go beyond the aforementioned trends. Join us in our next blog to understand the next 4 consumer trends we expect to see in 2022.
Contact RDG Insights Division for a better understanding of your customers’ minds with directions for your 2022 brand strategy.