What does today's shopper value? It depends on who you ask. The concept of "consumer value" remains as elusive and subjective as ever, but today's consumers possess specific characteristics that distinguish them from previous generations, due in part to the COVID-19 pandemic.
The pandemic compelled people to look inward and re-evaluate their priorities, elevating the concepts of relationships and responsibility. Many of them apply this new mindset to where, what, and how they buy products and services. Today's consumers are interested in where products come from and how they are manufactured – they care more than ever about sustainability. They also value loyalty programs, ease of use, and omnichannel shopping – all of which can be enhanced through the effective use of technology.
What are "Consumer Values"?
Determining the wants of customers is crucial to the success of any business. However, as decades of research have shown, defining "consumer values" isn't easy. When customers evaluate a product or service, they weigh its perceived value against the asking price. It doesn't matter what price they pay; it's what they are willing to pay and what they perceive to get in return.
Commonly, consumers evaluate products and services along two dimensions: functionality and emotional worth. In other words, they tend to ask "What can a product do for me?" and "How does it make me feel? " They assign value based on a number of factors such as quality, aesthetics, status, ease of acquisition, personal bias, and so on. What one consumer values may not matter to another.
How Have Consumer Values Changed Over Time?
Historically, customers have sought the cheapest and most convenient products and services available on the market. However, "today's consumers are more attuned to brands' values and [are] willing to pay a premium to support companies that share their values." In fact, the majority of consumers believe companies should take a stand on contemporary issues, even if they disagree with their stance.
This shift appears to be generational, with younger consumers leading the way, and may be, due in part, to COVID-19. "Times of crisis often cause people to reflect on their values, and 2020 was no exception. In a year marked by a global health crisis, historic job losses, high-stake political elections, and social unrest, some 35% … reported a change in their personal values over the past year." Consumers are not just paying attention to brand values; they are incorporating values into their own purchasing decisions.
Today's consumers are drawn to businesses that support their mindset and are willing to pay more for their products and services. They are especially interested in supporting sustainable brands. The ability to meet our own needs without compromising the ability of future generations to meet their needs is important to the majority of shoppers in 2021.
Forbes Magazine recently reported the following trends in consumer behavior:
- Today's consumers are more sensitive than ever to the state of the environment.
- Today's consumers are motivated to act in support of sustainability.
- Today's consumers feel empowered to champion brands that promote sustainability.
As a result of these trends, people have become more attentive to where their products come from. According to Forbes, today's consumers tend to "prioritize buying products that are ethically sourced, would pay about 17.5% more for these products, and believe companies should be more transparent in their sourcing processes."
This research demonstrates that customers are willing to put their money where their mouth is to support sustainability.
Health and Safety
In addition to sustainability, today's consumers value their health and safety. While health standards have always been important to shoppers, they became even more critical during the COVID-19 pandemic when mask-wearing, hand sanitizing, and social distancing were vital tools in fighting the spread of the coronavirus. Health and safety are likely to remain vital as we transition from crisis mode into recovery mode following the pandemic.
At a minimum, today's consumers want to know that retailers value their safety by ensuring specific health standards in their stores. Ombori identified the following:
- Proper ventilation
- Removal of physical hazards
- Crowd monitoring
- Climate control
- Sufficient lighting
- Fire safety cleaning and disinfecting
- Proper signage
Health and safety have come to be expected as part of the "ultimate customer experience." Customer experience is a measure of how satisfied people are when they engage with a product or service. The safer consumers feel in your retail setting or utilizing your products or services, the more likely they are to remain loyal to your brand.
Lastly, today's consumers’ value options and Ombori marketing research found that customers unequivocally report they want choices when it comes to shopping. Fortunately, today's retailers have responded to this demand by offering omnichannel solutions.
Omnichannel retail combines aspects of both virtual and in-person shopping into a seamless experience. For consumers, the omnichannel shopping journey can take many forms, but all involve a combination of online (computer or mobile device) and offline (brick-and-mortar) channels, which allows retailers to market to a broad spectrum of shoppers.
"Omnichannel retailers win on some emotional and life-changing elements. For example, they are twice as likely as online-only retailers to score high on badge value [finding and promoting products that inspire customer loyalty], attractiveness, and affiliation and belonging. Consumers who get help from employees in stores give much higher ratings to those retailers; indeed, emotional elements have probably helped some store-based retailers stay in business [during the pandemic]."
An omnichannel approach places the consumer at center stage; it acknowledges that mobile devices and social media have enabled people to not only quickly switch between retail channels but actually use them simultaneously. For example, customers can check out product reviews on their phones while evaluating products in person at a physical location. In other words, omnichannel retail acknowledges that consumers engage with brands in multiple ways across diverse platforms and understand the underlying challenge of ensuring a seamless shopping experience.
How is Tech Helping Businesses Meet New Consumer Values?
Technology can assist businesses in meeting these new consumer demands.
For example, solutions developed by Ombori Grid now allow businesses to easily adopt an omnichannel marketing approach. Omnichannel marketing involves the integration of various platforms to interact with consumers, with the goal of creating a seamless brand experience. This includes both physical (e.g., stores) and digital (e.g., websites or apps) channels.
An omnichannel marketing strategy aims to create a convenient, consistent consumer experience that offers multiple opportunities for order fulfillment. An omnichannel approach gives consumers the chance to find and purchase products online, in-store, or via a combination of both – such as "buy online and pick up in-store" (BOPIS) or "buy online and pick up at curbside" (BOPAC).
For companies that have met consumer demand for an omnichannel shopping experience, loyalty programs have helped them continue building business and increasing revenue. Loyalty programs offer rewards, discounts, and other incentives as a way of attracting and retaining customers. They are designed to encourage repeat business, offering people a reward for their loyalty. Typically, the more often a customer patronizes a store or brand – and the more money they spend – the greater the reward.
Today's brands use technology to promote customer loyalty. "Businesses rely on loyalty technology to implement and track different offers. This technology includes member databases, customer service, points of sale, advocate marketing, and artificial intelligence (AI) chat functions, to name a few. By using such programs, businesses can develop and modify their loyalty programs based on customer demand."
Gone are the days when consumers would present paper coupons or plastic punch cards to redeem loyalty rewards. Instead, today's savvy retailers rely on QR codes to build and maintain customer loyalty.
QR codes make it easy for consumers to sign up for a loyalty program, download a brand's custom app, and access coupons and personalized deals. By encouraging customers to scan a QR code on-site to access a loyalty program, businesses can gain more information about an individual's behavior and preferences and deliver a more tailored experience. This approach makes the brand more memorable in the eyes of the consumer.
Staying Connected to the Consumer
A good product is no longer enough to win consumer favor. Shoppers want more than just quality and convenience; they look for products and brands that align with their personal values. Through their purchase choices, consumers purposefully seek to influence their communities and the environment and confirm how they see themselves in the world.
Rui is COO of Ombori Grid. Before joining Ombori in 2017, he worked in Beijing, Tokyo, Silicon Valley and Zagreb before ending up in Stockholm. He previously spent nine years in R&D at Ericsson as Operative Product Owner, and is a highly skilled leader in IT and communications with a successful track record of working closely with both stakeholders and management.