What Thriving Businesses Do to Stay Connected to Their Consumers (and how YOU can do it too!)
There is no doubt that the consumer today has and continues to evolve and adapt to today’s volatile environment. The combination of recovery and constant change has spurred a very positive yet cautious consumer. As we gear up for recovery, reconnecting with our consumers and understanding the needs and motivations behind their behaviors, decision making and purchasing patterns has never been a more pressing imperative for brands and businesses. The consumer has spoken and revealed six key themes that have an impact on the way forward for brands and businesses.
BRAND LOVE. Brands are making a comeback, but they need to clearly build a relationship and align with the values of their target market
One of the most interesting themes we saw was the resurgence of Brand Love. Acumen's 2017 and 2018 ethnographic studies showed a very significant drop in preference for branded goods. Many consumers were shying away from brands and felt that many brands were not aligned with their own values.
Fast forward to 2022 and we are seeing a shift in the number of consumers who are seeking well-known brands and are favoring branded goods. The majority of consumers also now actively research the products they use and like to be engaged with brands. While the degrees differ, these trends hold true for all generations.
Because of this, there is an increased pressure for brands to deliver on their promise and to align with their market’s values and beliefs. 65% only buy from brands that they trust completely and 37% make their purchasing decisions based on the brands’ beliefs. Moreover, customers are even willing to boycott brands that don’t share their social and political beliefs.
Given this re-emergence of brand love, we will need to continue and even accelerate our efforts in brand-building to strengthen the reputation and trust of customers in both the company and brands and ask ourselves, is our brand delivering real value to its consumers and to the business?
As we move towards building brand love, it is important to understand what themes are relevant to our consumers today. Throughout the pandemic, there have been several shifts in the consumer mindset some of which are direct and temporary responses to the pandemic, while others more foundational shifts in mindset. While it is too early to determine what will stay and what will still evolve, these remaining themes will be helpful as we try to determine how to understand, reconnect and build brand value for our consumers.
AUTHENTICITY OVER ACCEPTANCE. Consumers value authenticity and are expecting brands to support their need for individuality and uniqueness
There is a marked shift in mindset where authenticity is beginning to overtake the need for acceptance. 60% of Filipinos want to be unique from others. Conversely, the need for external validation is decreasing as less and less people feel it is important for others to think they are doing well. As a result, we are seeing more consumers looking for products and services that are tailored to them.
NORMALIZATION OF SELF-CARE. Self-care shifted from being a nice-to-have to a must-have and it means differently to every individual and across product categories
Making time for oneself has been rising in importance in the past years and is now a pervading priority for Filipinos in 2022. But for these consumers, self-care can mean a range of things and needs and thus, brands would then need to tailor their offerings to the specific self-care dimension that their target market needs within their category.
To name a few dimensions, self-care can mean improvement of physical health by staying physically active, making good food choices, or getting enough rest. This can also mean caring for self emotionally - helping individuals take care of their mental health, find outlets for their feelings and manage their stress.
With all these multiple dimensions, it is important for brands to deepen their understanding to identify what self-care means for their core target market in order to participate in the wellness space.
CONSCIOUS CONSUMERISM. Sustainability has now evolved beyond environmental concerns and consumers are expecting brands to play a greater role in acting in their corporate values
In addition to prioritizing self, we are seeing an increasing importance being placed by many on social responsibility. Almost 80% of consumers want to give back, an equal amount is worried about climate change and more Filipinos are actively involved in political and social issues.
As a result, consumers are expecting brands to step up and they are taking action through the products they purchase preferring to buy from brands whose values align with theirs. On top of this, they are even willing to boycott brands that don’t share these beliefs.
SHIFT TO SIMPLE. Consumers shift toward simplicity and a more deliberate spending on higher quality items that project longevity, true relevance and value, but simplicity can mean a range of things and needs to be tailored to the brands’ target market.
Filipinos are looking for ways to simplify their lives. 1 in 2 Filipinos would rather buy fewer but higher quality items. We are also seeing decreases in the desire for lower quality items. Bargain hunting, purchasing 2nd hand items and buying items that will not last are behaviors that consumers claim they will do less of. In all of Acumen's work with the consumer businesses, Value for Money has always been a major purchase driver, but never has this been of prime importance than now.
For most, the desire to simplify has also triggered a more deliberate shopping behavior. There have been marked decreases in consumers making impulse purchases and consumers browsing in stores even if they don’t need to buy anything. Like self-care, simplicity can mean a range of things and needs that need to be tailored to the target market.
END-TO-END OMNICHANNEL. Consumer touchpoints and drivers now shift fluidly creating an online to offline hybrid consumer journey from awareness to purchase and payment
The acceleration of digital adoption during the pandemic has triggered the rise of a hybrid consumer journey from awareness and purchase to payment. Consumer touchpoints and drivers can shift fluidly from online to offline. This varies by category, and we anticipate that this is here to stay for the long run.
When we look at the different touchpoints within awareness and consideration, the must win touchpoints cut across offline and online channels.
Moving to purchase, we also see a hybrid where 63% of consumers mix both online retail and shopping physical stores which means that they sometimes buy online, and they also purchase offline, while 2 in 3 customers use their phones to buy an item or service monthly. The search interest in same day delivery has also grown by up to 70% as Filipinos seek to replicate the instant gratification of in-store shopping that they are used to.
From a payment standpoint, there is an increase in what we call the digital users for payments. Pre-pandemic, there was a chunk of consumers who previously preferred physical payments but are now digital convertees. In fact, 68% of unbanked Filipinos have only started to utilize digital banking as a result of the pandemic and they expect their transactions to be made online already.
Opportunities and imperatives for businesses
Given this consumer landscape, what is needed for businesses to recover, thrive or even strengthen?
Firstly, be more and more customer-centric. This is no longer an option, it is a must. Brands and companies must pay close attention to the emerging needs of the customers. Remember, Filipinos have become more cautious, more adaptive and flexible and so there is dynamism – in their needs, preferences and shopping behavior. The opportunity for further growth lies in aligning brand and product propositions to address the persisting, unresolved tensions in their lives today or riding on the solutions that they have found for their needs and desires and innovating products and services to maintain relevance, introduce variety, and drive repeat purchase. Secondly, continue to invest in brand-building. Those who continuously invest in strengthening their reputation and trust will be well-poised for the future. They’d need to be very conversant on what drives value for money and ensure that they have a competitive proposition vs all other alternatives. Lastly, revisit the business model, be agile and provide the right mix of omni-channel – digital and physical - customer experience. Companies must closely follow the shopping journey of their target market and ensure that their channel mix mirrors the new and ever-evolving shopping habits of consumers.
Bottomline, the businesses that will thrive are those that will stay connected to their consumers, evolve alongside their needs, and provide assurance that no matter the situation, their products and services will be made available and will deliver. Below are some key business questions to get you started:
About the Author Anny Oliveros
Anny Oliveros heads Acumen's Knowledge and Intellectual Property Development Center. She is a certified Agile practitioner and has had over 15 years of experience in Business, Strategic Planning, Marketing, Sales and Capability Building both locally and in South East Asia building global and local brands.