In an ever-changing world, today’s consumer is screen-addicted, hyper-connected and has greater brand expectations than ever before; for any luxury business – whether a household name or an emerging player – it’s crucial to understand their future mindset, to keep pace and align with the needs of the buyer of tomorrow.
What do consumers want from brands?
Different: With endless choice and more marketplaces than ever before, consumers are looking for that stand-out experience (in addition to finding products they can’t live without). Whether that’s online or bricks and mortar, the buyer of tomorrow will value differentiation and brands going that extra mile to make their customers’ buying experiences more tailored, targeted and meaningful. Brands will need to think carefully about their product choices so that their ranges stand out to consumers, as well as thinking about their own narrative in order to persuade consumers to become invested in and part of the brand.
Tomorrow’s individuals want ‘Emotional Consumption’ across the board – and that means as consumers of jobs, experiences and cultures as well as goods and services. It is important to recognise that the more choice we have, the more we are driven by emotional values.
Global Influences – Tomorrow’s Consumer
Nimble: Today’s pace of life is fast. A cocktail of technology, the gig economy and Covid-driven practices that have survived in a post-Covid world (e.g. restaurant ordering via barcodes) have made the expectation of pace even more apparent, and consumers expect brands to keep up.
Sustainable: The climate crisis is becoming an issue of great personal interest to consumers, who want to ensure they are doing their bit in as many aspects of their lives as possible, from making everyday purchases to going on holiday. Consumers want brands to be on top of this issue, to be putting a greater emphasis on giving back and making a tangible difference, and the buyer of tomorrow will make decisions on which brands to engage with based on their sustainability-focussed offerings.
Honest: Finally, the buyer of tomorrow will want brands to engage with them more in a transparent and authentic manner, both from a marketing perspective and also in the development and creation of products. Consumers want to feel more like they are in partnership with the brands they purchase from, and so increased two-way communication, including more informal marketing techniques, will be high on the priority list.
Meet your Consumer of Tomorrow: Key Sentiments for 2024
A new white paper from WGSN on the Future Consumer 2024, explores some key drivers behind consumer sentiment that should factor into future brand strategies:
- Future Shock: A feeling of distress, driven by rapidly accelerating change in society and technology
- Overstimulated: The rise of emotional clutter and always-on lifestyles has put our senses at capacity
- Tragic Optimism: As an antidote to toxic positivity, this mindset offers a more realistic take on life
- Awe: Embracing feelings of wonder that have been shelved over recent years
How are brands adapting to the buyer of tomorrow?
We are already seeing brands deploying new technologies and strategies to keep up with the expectations of consumers. As we know, the information age has altered the average attention span. Brands are addressing this lack of patience, for example, by utilising AI to speed up the supply chain and a growing number of retailers now offer same-day delivery at the touch of a button. Brands are also accurately aware of how critical the customer experiences are from first engagement to after sales care and are using a number of innovative technologies to ensure they offer first class experiences through the consumer journey.
Luxury brands are not just waiting for customers to come to them or relying on clever marketing campaigns but are reaching out to customers in new and innovative ways. For example, the likes of Burberry, Gucci and Louis Vuitton are all taking strides to engage with customers in the metaverse, recognising that it is a route for both marketing and sales.
According to McKinsey, 79% of consumers active on the metaverse have made a purchase, making it an area ripe for opportunity.
In order to address the consumer expectations for brands to engage in sustainable practices, there has been an increasing focus on the sourcing of materials and use of sustainable methods when bringing products to market. For example, brands have started tagging the source of items to provide consumers with full transparency of a product’s creation and impact and to demonstrate that sustainability is a core value (and not just a tag line). There has also been an adoption of circular business models by brands including Stella McCartney, which is creating innovative ways to reuse materials, including recycled nylon and polyester as well as a partnership with Protein Evolution, Inc., a biological recycling company that will help recycle Stella McCartney’s textile waste into new fabrics.
Through its partnership with Provenance, a transparency tech provider, Ganni is showing that by using data and third-party proof, it can bolster the consumer trust in a brand’s production when many other retailers are struggling to certify their garment origins. Provenance is a certified B Corp, working with the highest sustainability standards in the industry. According to Glossy, “Ganni can display supplier information on a map, identify the processes and ingredients that go into each garment, and let consumers access the information on the garments they are purchasing. Each claim on the brand website requires a minimum level of evidence to make it credible, backed up with data from the brand’s supply chain that is recorded on the blockchain. Blockchain allows for the fragmented data to come together on one immutable ledger that displays every contact point in a garment’s production history.”
More than 150 brands are using Provenance’s Proof Point tech, including Unilever, Napolina, Arla and Cult Beauty.
In terms of increasing engagement, brands are becoming more flexible in their marketing initiatives, using creators on social media platforms and giving up control over campaigns and brand images. This is leading to more informal content such as live streaming of online events. Given some of the changes of relying on third party data sets, brands are also focusing on harnessing the valuable consumer data they have direct access to. This facilitates the brand’s creation of its own digital consumer-engagement ecosystem and brands are moving more towards direct to consumer (DTC) models. A recent McKinsey report suggests that Nike’s digital sales grew by 36 percent in the first quarter of 2020, and Nike is aiming to grow the share of its DTC sales from 30 percent today to 50 percent in the near future. As Nike’s CEO and president, John Donahoe, puts it: “The accelerated consumer shift toward digital is here to stay”.
Is direct to consumer (DTC) the future?
Direct-to-consumer gives brands the freedom to connect, engage, and sell to their audience exactly how they want to. This gives brands that use a DTC strategy in their business model significant control over their services and numerous opportunities and benefits.
A recent emarketer report puts direct-to-consumer ecommerce sales as being valued at $174.98 billion in 2023. The report also forecasts steady revenue growth in the next few years as more ecommerce brands adopt the DTC model.
However, The Business of Fashion warn “that mounting digital marketing costs and e-commerce readjustments have put the viability of pure direct-to-consumer business models into question”. It seems the key to success in 2023 for most brands will be the need to diversify their channel mix beyond DTC to generate growth.
What are some of the challenges?
There are huge opportunities for engaging with the buyer of tomorrow, but there are also some challenges from a consumer, tech and data perspective, including:
Authentic and transparent consumer interactions and ‘dark patterns’
Consumers are increasingly rejecting brands which seek to manipulate rather than facilitate customer interactions, particularly in the online space where more sales than ever are made. There is a clear opportunity for brands to take a lead in creating a transparent and functional online environment which truly benefits consumers, whether this is by helping consumers choose between suitable products or by making transactions faster. However, there will be challenges too as brands will need to be careful that they avoid inadvertently creating ‘dark patterns’ (i.e. misleading online techniques which manipulate consumers into choices they might not have otherwise made) which is an area of increasing regulatory scrutiny in the UK, EU and US.
Supply chain limitations
Even in challenging economic times, global demand for quality and speed remain. This is in turn putting a huge amount of pressure on global supply chains which are struggling as a result of geopolitical uncertainty, global unrest, dissenting workforces and a rise in raw material and transport costs as well as availability of such raw materials and supply chain services. This means that brands need to consider their supply chains carefully and ensure they have sufficient resources to deal with these supply chain challenges. Whilst AI can help to speed up the efficiency, such external forces cannot be ignored.
Consumer trust
There is a need to find a balance between leveraging the efficiency of machines and the value of human interaction. People love the speed and utility of a machine (e.g. organising a return, checking the delivery status of an order), but when they do want to speak to a person, that interaction needs to be genuine and personal in order for a brand to differentiate itself. In a recent study, Vonage found that 30% of consumers prefer contacting a business through their mobile phone and there will always be customers who prefer to speak to a real person. Therefore, brands must ensure they have a well-run contact centre within a tech enabled customer service solution in order to provide buyers of tomorrow with the level of customer service they expect.
Data
Given the big data boom, all brands will have access to a huge amount of consumer data which can be leveraged for insights purpose. However, as McKinsey reports “the challenge is to capture and ingest data from a range of sources and then consolidate them in a common data lake that can support analytical models.” There is not only a logistical challenge here in establishing useful data sets, but also various compliance challenges that if not correctly addressed can result in significant fines. When handling such large amounts of data (a lot of which will be considered ‘personal’), brands need to be hot on transparency, purpose limitation, data retention as well as ensuring they have a lawful basis to use the data for the intended purpose. With the ever-increasing cyber security threats, brands will also need to ensure they have robust security practices in place to protect their valued data asset. Brands that don’t have the benefit of relying on their own extensive data sets will need to buy in data sets which comes with its own set of challenges [you can read more on this here].
Technology
Brands don’t just need to rely on savvy tech to deliver products to market, they also need to ensure they appeal to consumers whatever device they are using. We know that consumers now use an average of five connected devices to research, compare and purchase products. This increase in multi-channel use along with the development of the metaverse means that consumers are increasingly expecting a joined-up experience across all devices. Brands will need to ensure they have an omni-channel strategy that is able to deliver enticing, seamless, consistent and contextual experiences across all channels so as not to distance themselves from the buyer of tomorrow. While technology is developing at a rapid pace, so is the regulation that governs its use. Therefore brands also need to keep in mind the ever increasing tech regulation, particularly if they wish to engage in AI and/or the metaverse!
Future proofing a business is always challenging, especially in times of economic uncertainty. However, the good news is that people are still willing to spend; brands will just have to work even harder to ensure consumers spend with them and not a competitor. Appealing to the buyer of tomorrow will be essential in any brand’s marketing strategy and therefore focusing on being different, nimble, sustainable and above all honest will help brands flourish even in challenging times.
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