2021 brought a lot of change for the retail and consumer goods industries. If there’s one thing I’ve learned, it’s that you never know what to expect from a new year anymore, but that won’t stop me from trying to predict what 2022 will be like for consumers and the marketers who serve them every day.
This Year's Theme? Reconnecting.
For both brands and consumers, I think the theme will be reconnecting. After almost two years of living through a pandemic, consumers are tired and looking to reconnect. Now more than ever, the feeling of being understood and having your needs met is so important. Brands are hoping to build meaningful relationships with consumers, which means investing in personalization and a renewed focus on understanding their consumer and making their experiences joyful.
Whether we know it yet or not, the pandemic has changed us deeply, and its impact on our behavior as consumers is no different. Consumers have basically reinvented themselves: their values, the way they shop, and their financial sensibilities all changed over the course of the past few years. If 2020 was the year of unprecedented times where everyone focused on adapting and surviving, and 2021 was the year of figuring out what the new normal looks like, then 2022 will be the year of thriving in that new normal. It is an opportunity for brands to understand and connect with this new consumer.
Here are five consumer insights that I think will define how consumer goods and retail companies approach their businesses and consumers in 2022:
- Consumers have redefined their values and are making purchases more consciously.
Consumers have redefined their value systems throughout the pandemic. More than 50% of consumers say that the pandemic has given them the opportunity to reevaluate what their priorities are, and with those changed values and priorities comes a significant change in their purchasing behaviors. They have higher expectations of brands and consume more consciously than ever before. This not only means brands need to take a stand and even take action on issues that impact society, but they also need to adapt their messaging and create experiences that reflect these values and resonate with consumers.
Conscious consumption is shaping the purchasing habits of consumers as they pay more attention to how their behaviours impact their health and wellbeing, as well as the environment and society at large. While quality and price are still an important value proposition for consumers, brands that will have a competitive advantage in 2022 will understand that it’s not only what they sell that matters, but how they run their business. Taking a stance on social and environmental issues and aligning business operations with this will be an important way for brands to foster trust and loyalty with consumers.
- Consumer loyalty is harder to earn, but loyal consumers will pay more.
As a large amount of shopping is now taking place online and through direct-to-consumer channels, the consumer journey has changed, and with it, how brand loyalty is built. It’s not only easier for consumers to do research on products and deals, it’s easier for them to do research on brands and what they stand for. If they can’t find what they’re looking for, it’s not difficult for them to switch to other brands.
Maybe it’s because shared values are now more important than before, but consumers are much less price sensitive and more willing to switch to a more expensive brand if it can meet their needs. In order to earn a consumer’s loyalty and prevent them from switching to a competitor, it’s not enough to provide a good product at a good price. You have to show your consumers that you not only understand what they want, but you understand who they are as a person.
- Every digital channel is an opportunity to connect with consumers and expand your business.
The consumer journey isn’t just limited to in-store and website now. Consumers spend so much time on different media platforms that the journey now includes multiple channels (web, social, email, SMS, app), which means there are countless variations of touchpoints and individual consumer journeys. For example, if I’m shopping for skincare products, I generally discover new products and do product research on Tik Tok or YouTube, but ultimately make purchases through the brand or Sephora website. There might be other consumers who discover new products on Instagram. Brands that connect effectively with consumers understand they have to be where their consumers are at every step, whether that’s on their website, Instagram, TikTok or whatever new platform consumers are flocking to.
In the last few months, there has been a sharp rise in mainstream brands advertising on newer social media platforms. Along with that, the platforms themselves are evolving – for example, Instagram has the Shop feature and both Tik Tok and Pinterest are expanding Shopify integration.
The new definition of “omnichannel” is embracing social media . In order to meet their consumers where they are, brands will need to understand how consumers use different platforms and focus on optimizing and personalizing these digital experiences across channels.
- Direct-to-consumer channels are forcing retailers and brands to put consumers first.
The retail and consumer goods industries are going through a transformation now as D2C channels emerge and become the new norm. Before, consumer goods brands would rely on retailers to sell their products and retailers had quite a bit of power. However, D2C channels have changed the power dynamic and are forcing retailers and brands to become more consumer-centric than ever before.
Consumers now have more options on where and how to shop, meaning retailers must make sure they are providing value to consumers and brands must find more direct and meaningful ways to connect with their consumers through digital channels. Since they no longer depend on retailers, D2C channels will become more valuable to brands over the course of the next year and provide them with an opportunity to show consumers that they understand them and create relevant experiences that foster connection.
- Deliver meaningful micro-moments with smart personalization.
With consumers spending so much time online, meaningful digital experiences are the most effective way for brands to make consumers feel connected and understood. As consumers shop and engage with branded content online, brands have an opportunity to optimize consumer journeys and provide consumers with exactly what they are looking for at the right time.
It’s not enough to personalize digital experiences by demographics and broad segments anymore. Consumers want to be catered to as individuals, which means delivering personalized experiences that are relevant at every stage of their consumer journeys, across different channels. This involves understanding their changing preferences, external factors, and additional context that might impact their behavior in order to provide them exactly what they are looking for at key decision-making moments. Micro-moments like this are what will give brands a competitive edge – they help consumers feel understood without feeling like their privacy is being invaded. These are the important moments that could earn a consumer’s loyalty or turn them off completely.
As 2022 shapes up to be another unpredictable year, it is also an opportunity for brands to embrace change while remembering that it’s important to stay connected and consumer-focused. Brands that do this well will be able to stay ahead of the curve and maintain a competitive advantage by reconnecting with extremely evolved consumers that are still eager to spend money. By taking a values-driven and consumer-centric approach, brands can stay ahead of the curve and meet these changing consumer needs while growing their bottom line.