A Tale of an Unsatisfied Consumer
As someone with a long history of losing sunglasses, I’ve never really invested in a good pair. However, last week I finally decided that now was time, and I started the hunt for some quality sunglasses, ones that would actually protect my eyes. As most people often do, I went straight online – browsing dozens of websites, searching specifically for retailers that had virtual try-on features. Following this I decided to visit a physical shop the next day to try some sunglasses on, sadly the presence of an over zealous sales assistant stopped me from buying anything but I did note the models and brands that caught my attention so I could look them up later.
Going back online I checked out which brands had the most to offer, such as discounts, delivery options, return policy, warranty, and sustainable practices. Additionally, I read through reviews and visited various Instagram and TikTok feeds, including some of the influencers that some of the brands were partnering with. The brands that offered the most innovative and pleasant experiences (e.g., virtual try-ons, accommodating staff, pleasant store displays, engaging socials, etc.) stayed top-of-mind.
In no time at all, I’d unconsciously decided which brands did or did not fit my personal style, my values, and my customer service/product expectations. Meanwhile, advertisers picked up on my digital behavior and pointed me to a pair of sunglasses that met all my criteria… almost. Just as I was checking out, I realized that my preferred method of payment wasn’t available. So I abandoned my cart. Now, a week later, I still don’t have my new sunglasses.
From ‘Impressive-to-Have’ to ‘Must-Have’
Granted, because I work in marketing and have an affinity with social businesses, one could say that my story is one of a “conscious consumer” with a hyper-sensitivity to the way brands and marketers position themselves – both online and offline. And I’m not alone – especially when it comes to my preference for omni-channel experiences and sustainability-focused brands:
- 54% of the consumers said they’re likely to look at a product online and buy in store, and 53% are likely to look at a product in-store and buy online.
- “Sustainable goods” has seen a 71% rise in online searches since 2016.
Shoppers of today, and surely that of the foreseeable future, embark on complex, brand-critical journeys. They travel across both digital and physical planes, experiencing a range of touchpoints along their way (such as physical staff, virtual staff like chatbots, ads, search results, marketplaces, social media, etc.).
Yesterday’s “impressive-to-have” commerce features are today’s “must-haves”, and if one merchant isn’t providing for a consumer’s needs, they know that somewhere not too far away, another merchant is. Already, the customer journey is riddled with innovations that didn’t even exist a few years ago: virtual try-ons, artificially intelligent chatbots, drone shipments, live shopping platforms, metaverse marketplaces, a range of payment options (e.g., buy now, pay later, NFT, crypto), and more.
“For consumers, the products they purchase are no longer the main goal of commerce. Now, customers seek out innovative, novel experiences… To grow your business and stay on top of developing trends, brands need a solid foundation built on reliable commerce features and capabilities.” – Shanon Duffy, Forbes
It’s clear that commerce isn’t just about buying and selling. Today and moving forward, brands need to compete on how they build communities, how their brand makes personal connections with consumers, and how their technology can enrich human experiences.
3 Insights to Prepare Brands for the Future
1. Brands that invest in lifetime value and brand-building are set to stay ahead of the competition
Our access to technology coupled with how much it has advanced over the years has lowered the barriers to entry into the world of commerce. On one hand, this has meant a degree of opportunities greater than we’ve ever seen. With eCommerce specifically, the industry is forecasted to grow by 50% in the next four years, reaching up to 7.4 trillion dollars in sales by 2025. In 2021, there were between 12-24 million ecommerce sites open worldwide, and this number is only growing.
On the other hand, it’s only logical that as opportunities have grown, so has the competition. Not only are more physical stores reopening post-COVID, but ecommerce sales are also seeing an upward trend (despite slowing down compared to peak pandemic numbers). All of this despite rising inflation, where the average cost of a shipping container is now over $10,000 (four times higher than a year ago).
With an influx of new players and the resurgence of older ones, more and more direct-to-consumer (D2C) brands are having to compete for the same audience. This reality, along with inflation, rising competition, supply chain issues, and diminishing ad-returns have put marketing budgets in a tight spot.
“As more businesses are online, it’s harder and harder to be found by new customers. Because it’s so easy to start online now, there are definitely rising costs of customer acquisition. Paid ads are getting really expensive, not to mention the Apple iOS 14 release, which has made it more difficult to track results in ad spend.” – Mel Ho, Senior Product Marketing Lead, Shopify
Some brands are seeing ad costs go five times higher than [before] to drive the same amount of traffic. – Ben Jabbawy, Founder and CEO, Privy
In addition to this, as third-party cookies phase out and data models require a total overhaul, the pressure is on for brands to build out their databases with first-party data. Brand-building as a way to captivate consumers out-of-market and to strengthen relationships with those in-market will be key for long-term success, whereas short-term performance marketing faces the most challenges – especially in such a saturated environment. Top companies are building loyal customer bases with brand- and community-building, not to mention putting these efforts at the center of their marketing strategies.
Incubeta’s Global Director for Partnerships and Growth, Jess Jacobs, shares her thoughts: “A brand that shares the beliefs of its consumers (especially millennials) is more likely to retain their loyalty. You can use branding to build relationships with your audience, which can eventually lead to loyal customers. Your branding can also convey aspirational messaging, which will encourage consumers to engage with your product. Once a consumer is on the journey with you, you can dive deeper into what products are more likely to suit them and through this journey uncover rich insights such as the lifetime value of your consumers as well as the narrative that will motivate similar consumers to engage with your brand.”
2. Brands that are serious about sustainability will thrive, while faking it (e.g., via greenwashing) could be catastrophic and staying indifferent will block growth
It seems the general consensus is that consumers are increasingly looking to support brands that “resonate” with them, whether that’s due to shared values (e.g., commitment to sustainability) or even some kind of geographic connection (e.g., #shoplocal, #supportlocal).
According to a study by Shopify and Forrester Consulting:
- 47% of the consumers said having a local presence was a significant factor for which brands they shop from.
- Consumers are 4x more likely to purchase from a company with “strong brand values”.
- 77% are concerned about the environmental impact of the products they buy.
Long gone are the days where businesses could compete on pricing alone; they now need to compete on brand propositions: What does the business stand for? What does it offer the consumer not just in terms of utility, but also in terms of emotion, long-term value, and perhaps even fulfilling a “higher purpose”?
“Among the strategies we see widely adopted is sustainability messaging. Increasingly, brands are recognizing the importance of sharing their sustainable efforts through branding. However, consumers are catching on quickly and are critical of brands that engage in sustainability initiatives that don’t actually make a difference. This is a critical balance that must be planned correctly”, Jacobs shares.
A common prediction is that more and more consumers will be willing to pay higher prices and accept slower shipping times for brands that align with their beliefs or aspirations. In other words, if they feel a personal connection with them. Whereas those that fake their way through quickly lose consumer trust, loyalty, and appeal. These are consequences that can come at a hefty price, such that greenwashing companies have started to pay.
“The future of corporate social responsibility looks bright. Due to current trends and innovations in corporate social responsibility, companies’ approach to business and engagement with communities will become increasingly dependent on CSR. Certainly, consumers have raised expectations, but now we see the trend where employees expect the same. It is an important turning point that brands must identify internally – if you value your consumers and your employees have similar beliefs, it can only mean that you are on the right path.” – Jess Jacobs
3. Top brands will focus on building communities across selling channels, enhanced by tech that pushes digital frontiers
Selling channels aren’t just transactional places anymore. Consumers want selling channels where they can be part of a community – a place to see what others are saying, to understand how your brand can enrich their personal values or lifestyle aspirations, and to have the freedom to curate their own experience of your brand, online and offline, alongside other people or users.
Social media offers particularly promising opportunities with an estimated growth to $2.9 trillion by 2026 – compared to $5.6 billion in 2020. We can ask ourselves if the growth of ecommerce via social media is a testament to our human need to feel a part of a community. It’s not so far-reaching to think that if we crave a sense of belonging in the physical world, then why wouldn’t we feel the same in our digital one?
In 2021, approximately 40% of companies and brands globally stated that they were creating more ways for customers to interact with them (e.g., chatrooms, blockchain, recipe sites, community hubs, etc.).
Top brands are doubling down on community building, allowing themselves to explore multiple channels and mediums where not only brands and their customers can connect, but also where consumers can form meaningful connections with each other.
Embrace the change
In asking Jacobs for the key insights that brands looking to future-proof themselves should takeaway, she shared a final note:
“Commerce has never been more exciting. With evolving customer journeys, brands have the opportunity to push the boundaries even further. Fortunately, we have the right tools at our disposal today. Brands face challenges and opportunities in attracting, engaging, and retaining customers in the cookieless world and the rise of Web3 technologies. Over the years, technology has largely been used to drive performance initiatives and branding strategies have remained somewhat traditional. Change is coming. Make your branding initiatives smarter by opening up your strategies and technologies. Incorporate data points into branding strategies to demonstrate real change. Don’t be afraid to let your voice be dynamic.” – Jess Jacobs
To learn more about corporate social responsibility and consumer behavior, register for our upcoming event, Incubeta Ignite: The Future of Tomorrow’s World where we’ll be exploring the future of advertising, privacy in a first-party data world and the role of corporate social responsibility, sustainability and purpose.