Lucia Juliano, Head of CPG research at Toluna, outlines what the retail industry can expect in 2022 and what retailers need to know so that they can deliver a better customer experience and on their brand promise….
The continual disruption brought by the pandemic has made it an eventful year for UK retail in 2021. With household costs and inflation rising, as well as a key focus on climate change, strong personal values and sustainable living, the need to understand constantly evolving consumer attitudes and behaviours has never been greater.
Throughout the year, our Global Consumer Barometer research, which taps into our community panel of 35+ million members to provide accurate and timely information on consumers’ perceptions, has consistently tracked changing consumer sentiment. We’ve found that consumer sentiment is changing as fast as the ongoing pandemic—and retail businesses must pay attention or risk the consequences. They must work to predict how consumers will shop, what they will buy, what they won’t buy, and when. They need to know what influences their purchasing decisions, including what brand values they look for and what drives them to spend money.
Retail businesses must be nimble. People expect brands to move at the same pace of everyday life, including our current news cycle. It’s essential to adjust messaging to adapt to the current climate and the way consumer behaviour is changing. If they don’t, retailers run the risk of sounding tone deaf. Personalisation is also key – retailers must empathise with customers’ everyday challenges and engage them where they are.
A glimpse of normality
With 2021 heralding the rise and ongoing success of the Covid vaccine, we started to see a glimpse of normality. This has led to increased confidence around spending and personal finances. Whereas just 40% of UK consumers said they were confident spending money in January 2021, that number has now risen to 55%. Between January and May 2021 alone, there an 11% decrease across the UK in concerns about personal finances.
As consumer confidence has risen, so, too, has their satisfaction with life. The most recent wave of our Barometer found that 60% of UK consumers are satisfied with their lives—representative of gradual and consistent improvement from 49% earlier in the year.
Permanent change in how consumers buy and spend
UK consumers have made many changes to their purchase behaviour this year, and many will continue to buy and spend differently going forward. When asked whether they had adopted new behaviours as a result of not being able to access the same items as usual, 23% of UK consumers said they had tried a new product. An additional 20% had bought from a new brand.
This is particularly true in the food and drink space, where we’re seeing consumers be more adventurous with their choices. Seventeen percent of UK consumers say they are trying more food and drink products/brands than before the pandemic. Twenty-three percent of UK consumers said they will stick with these new brands or products that they’ve tried during the pandemic, and 30% are open to trying new ones in the future.
Increasingly conscious consumers
Purchase behaviours are influenced by a variety of factors ,and the pandemic seems to have altered what is important to consumers. Sixteen percent of UK consumers say they now put more thought into the brands they buy, while 52% of consumers say it is important to invest time and care into the decisions they make.
In sectors such as food and drink, health and beauty, household products, and financial services, almost half (41% – 52%) of consumers say they review all brands before selecting the one they will buy. In fact, this is a more common occurrence than identifying a single brand ahead of time.
The importance of brand values
Going back to my opening point around brand values, our Barometer continues to show that factors relating to social responsibility are increasingly important to consumers and have a large impact on the brands and products they choose to buy. Fifty-two percent of UK consumers think about whether a brand supports the issues that are important to them when buying products or services, and 49% say they would switch to brands that were actively supporting social issues important to them.
The message for retailers? Regardless of the cause your brand supports, it’s more important than ever to communicate those values to your consumers; seventy-three percent of UK consumers will go out of their way to engage with brands that align with their values. Knowing this helps retail businesses differentiate their messaging from competitors or come up with something that’s authentic to their customers, which, in turn, wins customer trust and loyalty.