the changing face of consumer behaviour
TRANSCRIPT
© Prof. Moira Clark 2021
Where business comes to life
The Changing Face of Consumer Behaviour
Prof. Moira ClarkThursday 13th May 2021
© Prof. Moira Clark 2021
• How consumer behaviour is changing
• What we can expect going forward
The changing face of consumer behaviour
© Prof. Moira Clark 2021
© The Henley Centre for Customer Management 2021
Customers are becoming:
The 21st century customer
© The Henley Centre for Customer Management 2021
Ageing of populations
Source: United Nations Population Division; World Population Prospects (2006 Revision)
Perc
enta
ge
of
Pop
ula
tio
n 6
0 Y
ears
an
d O
lder
© The Henley Centre for Customer Management 2021
The world is getting older rapidly
A huge market of “over 65s” is emergingNote: Country position on the chart represents the year in which the over-65 group overtakes the under-15 group
Sources: United Nations; World Population Prospects (2017 Revision)
© The Henley Centre for Customer Management 2021
Over 60’s:• Mature economies - 22% to 33%
• Developing world - 9% to 20%
• 25% of China’s people over 65
• Japan alone has 30% over 60 now
- 64 countries will by 2050
In the UK by 2031:• 50% will be over 50
• Over 85’s double to 3.1m
• Those born in the:
– 1950’s expect to live to beyond 90– 1960’s onwards to live beyond 100– 2010’s expect to live to 110
Global ageing by 2050
Sources: UN ESCAP, Ageing Societies; Cancer Research UK, Demographics; AICPA.org, Global Forces
© The Henley Centre for Customer Management 2021
The performance of the brain for certain tasksslows from the age of 20
• Loss of grey and white cells in the prefrontal cortex, reduced volume of hippocampal
• Slowing processing speed
• Reduced working memory
• Declining long term episodic memory after 60
Healthy Aging Means:
Source: Hedden and Gabrieli 2004
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Implications for Service Performance
Older Consumers
• Will seek interpersonal relationships
• Will delegate choices to trusted service providers
• Less able to multi-task
• Simple decisions will take longer
• Complex decisions are "rationed”
• Time pressure reduces decision making effectiveness
• Distraction (music / noise) will hamper decision making
Older Service Personnel have all the same issues
© The Henley Centre for Customer Management 2021
•
• Brighter lights
• Comfort
• Seating
• Parking
• Toilets
• Sound
• Time
Etc.
… and what do older people want?
Larger print
© Prof. Moira Clark 2021
Are your customers becoming more intolerant?
Yes
No
Uncertain
Poll
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Have you had more complaints since lock-down ended?
Yes
No
Uncertain
Poll
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Changing Consumer Behaviour
• Complaints declined during COVID
BUT
• Consumers are no longer tolerant of a poor customer experience
Source: EY Future Consumer Index, Mar21 and Ombudsman Services Action Monitor Report August 2020
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Customers are connected and in control
Informed, Disloyal & Time-poor
Driven by Experience Increasingly Passive
Socially Dependent
39% research before purchase
Mental Availability Automation
71% purchase on socialrecommendation
© Prof. Moira Clark 2021
How is customer behaviour changing?
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Changes in consumer behaviour – going digital
Source: WeAreSocial.com, Jan21
Flight to digital and omnichannel: Emerging E-commerce trends for 2021
© The Henley Centre for Customer Management 2021
Consumer behaviours are settling into a new normal, even as countries reopen parts of their economies
• Shift to value & essentials
• value remains the primary reason for consumers to try new brands as well as new places to shop
• convenience and availability are most often cited as top drivers of consumers’ decisions about where to shop
• quality and purpose (desire to support local businesses, for example) are the more important considerations when choosing new brands
Source: Forbes, ‘Changes In Consumer Behaviour Brought On By The Pandemic’, Jan21
Changes in consumer behaviour
© Prof. Moira Clark 2021
Consumer behaviours are settling into a new normal, even as countries reopen parts of their economies
Changes in consumer behaviour
• Shock to loyalty
• 60% of consumers who tried a new behaviour plan to stick with it post-crisis
• Value, availability, and quality or organic products were the main drivers for consumers trying a different brand
© Prof. Moira Clark 2021
Consumer behaviours are settling into a new normal, even as countries reopen parts of their economies
• Homebody economy
Changes in consumer behaviour
© Prof. Moira Clark 2021
• Gen Z grew up with technology seamlessly integrated into their lives
• Now that companies have their personal data, [customers] want anticipatory, personalized experiences across the entire customer journey
The desire for experience
• You are NOT competing with your competitors – you are competing with the last best experience your customer had
Source: Harvard Business Review, ‘10 Truths About Marketing After the Pandemic’, Mar21
© Prof. Moira Clark 2021
• Younger audiences are leaving many public-facing social platforms and flocking to smaller, more intimate online destinations – or ‘digital campfires’
• The biggest cultural moments to capture the attention of young audiences in 2020 happened on digital campfire platforms, not traditional social ones
Where are brands reaching Gen Z now?
Source: HBR, ‘Where Brands Are Reaching Gen Z’, Mar21
© Prof. Moira Clark 2021
According to research in the Henley Centre for Customer Management, customers will expect:
• Entertainment/innovation
• Immediacy
• Omnipresence
• Proactive service
• Automated service
• Rich interaction
• Transparency
• Customer co-creation
• Customisation &
• Personalisation
Increased customer expectations
© Prof. Moira Clark 2021
1. Digital innovation and omnichannel experience
• Greater investment in digital assets to boost acquisition of customers
• Companies making the digital experience is ‘easy’ and as frictionless as possible
• Use of brand hosted communities to build sustainable and long-term relationships with customers (e.g. Under Armour)
• Improve and prioritise the use of Apps
© Prof. Moira Clark 2021
Digital innovation and omnichannel experience• Enrich the digital experience as far as possible i.e. samples,
videos, AR
Source: McKinsey
© Prof. Moira Clark 2021
Disruptive technologies are shaping consumer behaviour
The Internet of Things
• In 2012 companies spent $20 bn on technologies linked to IoT.
• By 2030 expected to exceed $700 bn
• IoT could contribute $14 tn to the world economy
Artificial intelligence and customer interactions - Conversational commerce
• 2021 – 1.5bn virtual assistants installations
• By 2023 - exceeds 8.0bn.• Could bots be the future
commerce platform?Conversational commerce?
© Prof. Moira Clark 2021
• AR and VR could form a $150bn market, disrupting mobile by 2030
• 1.3bn mobile AR apps by 2025
Next phase of mobile
Source: Overdigital, Augmented Reality
The end of the smartphone era?
• Less need to touch a screen.
• 85% say wearable electronic assistants common in 5 yrs.
• 50% say holographic screens mainstream within 5 years.
http://www.kurzweilai.net/ai-will-replace-smartphones-within-5-years-ericsson-survey-suggests
https://cdn-images-1.medium.com/max/800/1*RDB7q2UG9KdBIANWiA0kgA.jpeg
© Prof. Moira Clark 2021
2. Click & Collect (with physical changing rooms)
• Customers can quickly try on clothes and return them easily if they are not quite right – benefits the customer and the retailer
• Online fitting rooms are also increasing in popularity
© Prof. Moira Clark 2021
© Prof. Moira Clark 2021
Served by humanoid robots/holograms
Acroid 1 Shakira 2 Clooney 1
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3. Shopping local
• Almost 3 in 5 shoppers have said they are more likely to shop at stores selling locally-produced goods once lockdown is fully lifted, compared to before the pandemic hit the UK (Source: Deloitte Digital)
• Department stores should embrace local – repurpose some of the store for local fulfilment
© Prof. Moira Clark 2021
4. Entertainment & al fresco dining
• A third of Brits say they’ll spend more on eating out than they did before lockdown
• Customers keen to use pub gardens rather than eat inside
• Peter Jones, Sloan Square (John Lewis): “more inspiration, surprise, fun. We’re going to build a huge bar and restaurant here with food from our Waitrose farms” – Sharon White Chairman of John Lewis Partnership
(Source: YouGov May 2020)
© Prof. Moira Clark 2021
70% of customers said they try to purchase products from
companies they consider to be ethical
90% of customers are willing to pay more for ethical retailers…
… whilst over a third feel it is more important that
the brand’s values match their ownSource: KPMG: UK Customer Experience Excellence Report 2020
57% of all consumers have made significant changes to their
lifestyles to lessen their environmental impact Source: McKinsey
5. Consumers are becoming socially and environmentally-minded
© Prof. Moira Clark 2021
• Innovation and technology is significantly impacting the future of the high street
• It’s about providing an approach that is seamless, personalised, transparent andengendering trust
• It could be an era where the customer has never had it so good!
Summary: Changing consumer behaviour
Data analytics
Robotics
Biometrics
AI & IoT
© Prof. Moira Clark 2021
Thank you!
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