Trust is an intangible asset with a very concrete impact. Social media is fast transforming the way consumers and brands interact, giving consumers more of a voice and putting pressure on brands - to be authentic, respond to consumers’ concerns, accept responsibility for mishaps, and even take a stand on social topics. In fact, 39% rank ‘trust in the brand’ among their top three reasons for purchase. This makes trust one of the top three purchase drivers for more consumers than ‘good location’ – only marginally less important than being able to find items in stock (42%).
Read Craig Skelton’s blog, Who do UK Consumers really trust and why? to dig deeper into the survey findings.
Artificial Intelligence (AI)
AI is a technology that’s moving rapidly into the consumer packaged goods (CPG) and retail sectors.
To date, AI’s most obvious impact is in the home but it's also being used increasingly by stores to optimise inventory and improve shelving techniques. AI is revolutionising logistics & delivery, and the ways in which companies profile and segment customers.
In the UK just 17% of respondents currently own AI devices – such as robots or automated personal assistants like Amazon Echo or Google Home, but 26% say they plan to buy one.
Read Rob McCargow’s blog, The AI revolution is here in retail and consumer packaged goods – but it’s only the beginning to dig deeper into the survey findings.
Despite the widely-publicised, recession-induced ‘new normal’ that’s been damping down consumer spending and corporate investment since 2008, our survey data shows consumers are very confident about the next few years.
In the UK the mood may be more restrained than that globally, but spending intentions remain in line with global trends. ¾ of UK consumers say they are planning to spend the same or more than last year.
What will they be buying? Grocery emerges once again as the only category with a net number of people expecting to spend more, while most people say they’ll cut back on eating out and big-ticket items.
Read Sue Rissbrook's blog Consumers and CEO's agree that the economic gloom is being overstated to dig deeper into the survey findings.
For decades, the predictability of long established shopper habits reduced risks and lowered costs for manufacturers and retailers. But fast forward to today, and we can see the landscape changing – with digital disruption spurring a reinvention of consumer habits, collapsing some routines and creating entire new behaviours. Instant gratification is becoming the norm - As soon as a consumer wants something, they can order it. They don’t even need to open their device – but can simply tell their digital assistant, such as Amazon Echo or Google Home, to make the purchase. That’s happening even for groceries, the last bastion of physical retail, with almost half of all respondents expecting to buy groceries online in 2018.
Read Jacqueline Windsor's blog Navigating new consumer shopping habits to dig deeper into the survey findings.
New Business Models
New business models are thriving but it’s not all doom and gloom for bricks-and-mortar, with e-commerce still representing less than 15% of global Business to Consumer revenues. 59% of our global respondents shop at Amazon or its Chinese equivalents, online retailers JD and Alibaba’s TMALL, but the fact remains that just 4% of total retail sales go through Amazon’s platforms.
So, for all of the headlines about the growth in e-shopping, the truth is that consumers still regularly visit brick-and-mortar stores. And there are many opportunities to experiment - and thrive - with new business models. Companies that move to seize these opportunities can still prosper, despite the relentless rise of the e-commerce giants.
Product shipments remain one of the hardest problems for consumer goods companies and retailers to solve. Shoppers' rising expectations for prompt delivery is adding pressure for companies to deliver better service at lower costs.
Watch this space for Oz Ozturk’s blog on what shoppers delivery expectations are and what the implications are for the UK