It’s almost that time of the year again - the holiday rollercoaster from Halloween to Thanksgiving to Christmas! For me this usually means a lot of eating, drinking and shopping. For brands and consumers, it means the hustle for holiday shopping.
While a return to pre-pandemic normal feels like it’s within reach, consumer behavior won’t look like it did in 2019. Consumers this year are engaged and ready to go while maintaining the shopping behaviors that have become second nature to them over the course of the pandemic.
Here are four trends to keep in mind as we go into the 2021 holiday season:
1. D2C channels are building deeper relationships with consumers.
The pandemic brought in-store shopping to a complete standstill, as brick-and-mortar shops were forced to close their doors for months.
In the last year or so, plenty of consumers made the leap to fully digital buying behaviors and started relying on e-commerce channels to get what they needed. They did more research, became more comfortable with shipping times, curb-side pick-up and online returns. Shoppers that used to take pride in their weekly grocery lists and picking fresh produce became more comfortable using offerings like Walmart’s grocery pick-up service and food subscriptions.
Traditionally, consumer goods brands have reached their customers through retailers and third-party e-commerce sites, but the pandemic has shown that building relationships, driving trust, and making use of first-party data and owned e-commerce channels is the key to CPG brands’ success moving forward. By the numbers, D2C channels are more attractive than ever – comprising more than 14% of total retail e-commerce sales in the US
D2C models are simply the latest evolution for CPG brands, and a necessary one at that. Without shoppers in stores during the pandemic, traditional CPG brands had few ways to interact with their audiences. At the same time, younger, tech-savvy brands like Quip and Dollar Shave Club saw this opportunity to increase awareness and business for their brands in online spaces, took advantage of it, and now are major players alongside legacy brands that have owned the CPG space for decades.
2. Consumers want personalization, and brands are eager to please.
As consumers get more comfortable shopping online, brands all over the world are trying to step up their digital consumer experience and personalize these as effectively as possible to keep consumers loyal. . Consumers want more than just their first name at the beginning of an email – brands should be looking to deliver on personalized content and product recommendations, using dynamic content templates, and helping consumers find what they’re looking for, even when their needs, interests, and context changes.
The numbers help tell the story:
- 60% of interactions with brands happen digitally, up from 42% pre-pandemic
- Over 70% of consumers claim they only engage with personalized messages from brands
- Only 34% of consumers feel that brands adequately personalize the consumer experience
Consumers are looking for highly personalized, relevant digital consumer experiences, but brands are struggling to make that happen at scale. The problem isn’t a lack of data – retail and ecommerce brands tend to have tons of data on their consumers. Instead, the issue lies in using the data that brands have. Many brands are going back to basics of data management and infrastructure and leveraging AI tools to set themselves up for long-term and scalable success with personalization.
Data science is a key element of personalized consumer experiences. Without a strong foundation in collecting, tagging, and analyzing first-party data, brands are certain to miss opportunities to connect with consumers and build meaningful relationships.
3. Brands are becoming more socially and politically conscious.
There are two sides to every issue, and plenty of people think that brands should stay out of political debates or keep quiet on social issues, but trends show that more brands are using social media to take a stance on issues that are important to their consumers. In fact, 43.5% of CMOs believe that brands should take a stance on legislation – something that became clear as political divides in the US have widened during the pandemic.
Consumers expect brands to speak out. While C-suite executives and corporations may struggle to decide whether to raise their voice or keep quiet, consumers don’t grapple with their own feelings about your brand. More than 80% of consumers believe trustworthiness is more important for brands now than it was prior to the pandemic, and 50% say they want to see companies making a difference in society. Avoiding issues or remaining silent, then, may be worse for business than speaking out on issues that not all of your audience members agree on.
Take Airbnb, for example, which involved itself in the Afghan refugee crisis by providing temporary housing to 20,000 refugees around the world. Or Patagonia, the outdoors brand built around environmental activism and conservation efforts, which holds fast to its values even when facing the risk of backlash from consumers.
4. Cookies aren’t going to survive much longer – what’s next for digital marketers?
With Google hoping to phase out third-party cookies by the end of 2023, advertisers and marketers are scrambling to find alternative ways to track users and personalize online experiences. While this is a bigger issue for advertisers, digital marketers are also finding themselves in a tough spot when it comes to personalization efforts – 41% believe their biggest challenge will be the inability to track the right data.
Without cookies, how can you create personalized experiences?
Of course, there are alternatives on the horizon like Google FLoC and Universal ID that lend themselves to anonymity, but for retail and consumer goods companies especially, nothing is going to be as powerful as high-quality first-party data.
The key is to invest in owned, first-party channels like email marketing or loyalty programs to make sure that you’re collecting high-quality, first-party data. Consumers are going to have more control over how they share their data – that’s a given – but in order for them to share it with you, you need to provide value up-front with relevant and meaningful digital consumer experiences. As long as you understand how to collect, tag, and use your first-party data, the death of third-party cookies won’t have a major impact on your personalization or marketing efforts.
With the holidays coming up quickly, consumers are going to be engaging with brands regularly. For marketers, that means competing for their attention and their business. To make a positive impact on consumers and drive brand loyalty, it’s clear that investing in first-party channels to build deeper relationships with consumers and personalize experiences is crucial. Beyond that, brands also need to highlight their own values and show consumers that they’re not all talk – staying silent on issues and “playing it safe” simply isn’t a viable strategy anymore. Staying on top of these trends will help your brand maintain a competitive advantage and create a reason for consumers to keep coming back for more.
To learn more about these trends or how to get your brand on the right track to first-party data collection and predictive personalization at scale, check out our other blog posts or reach out to us today!