The phrase “it’s easier to close down than open up” has been used a lot in the last year and is particularly relevant in consumer markets as we get tantalisingly close to re-opening stores. Opening up the doors and attracting customers poses fresh challenges for under pressure management teams. Niall Savage, Retail & Manufacturing lead, explores the issues.
What do customers want post lockdown? Some business owners fear a portion of their loyal customer base has now migrated online and abroad for good, while other more optimistic merchants have faith that their customers want more than a scroll and a click and a box arriving a few days or weeks later.
For retail, a great unknown is how much of the changes seen in consumer behaviour are permanent. Have consumers values changed? Are there different things really driving the buy decision, e.g. does purpose over profit apply to all consumers or only the more discerning, younger consumer?
Management are tasked to develop strategies to engage with their customers to ensure long term sustainable profitability for their businesses. Most agree that doing what they were doing in 2019 will not be as successful, but how much of what worked in attracting customers during the various levels of lockdown will work once things open up?
In our recent “Me, My Life, My Wallet” insights report we attempted to look at global “big picture” trends that will drive what future business will look like. One of the most interesting of these was accelerated equality across generations both in how information is consumed and what motivates consumers to buy. In a nutshell how people decided to buy was less dependent on what age they were.
We are seeing this in key trends such as penetration of technology (and specifically smart phones), the importance of ethical retailing and in general the narrowing of the generation gap. Our research indicates that COVID-19 has accelerated the sharing of values across generations.
The Silent Generation (aged 75+) have rapidly rapid adopted and indeed embraced technology - 81 percent now use a smartphone, compared with 61 percent pre-COVID-19 and are now more concerned with economic and social disparity - it now concerns 75% of the over-75s, compared to 40 percent pre-COVID-19.
For the Baby Boomers (54 to 74 year olds) the “echo effect” from younger generations, including their offspring, has influenced Boomers, who are now much keener to use firms who share their values (83 percent). They are also going cashless far quicker than previously modelled or anticipated.
For the younger generations, they are also starting to draw influences from their elders. 75% of Generation X (37 to 53 year olds) are worried about their children’s success and the world they are going into. The much-maligned Millennials (17 to 36 year olds) are gaining responsibilities with 32% now caring for an aging parent. Finally, 92% of the up and coming Generation Z (7 to 16 year olds) are concerned about the economy.
Why does this matter? Well, many traditional marketing efforts are demographically targeted but audiences are now less driven by age profile. Sustainability, ethical trading and value-based marketing will drive the purchasing decisions of more consumers.
Nobody has all the answers as we move forward, but what is certain is that focusing on customer needs will always be important for staying and remaining relevant.
Wondering how to progress your retail business post-lockdown? We can help. Contact our Retail team for experienced guidance – we’d be delighted to hear from you.