2020 accelerated customers’ expectations. It has pushed companies to rethink their value proposition and to show creativity in the face of adversity. But how has consumer behavior changed concretely? And where will it head towards in 2021? We asked Tom De Ruyck, global consumer expert, to share his knowledge on the matter. Here are some key takeaways from our latest webinar session.
#1: Is the ‘new normal’ really all that new?
All year, trend-watchers have talked about ‘the new normal’. In one sense that’s true. The rapid move from offline to online was a big challenge for many companies. Some people have experienced the convenience of online ordering for the first time. And once something becomes a habit, that behavior is likely to last.
‘Purpose’ is another challenge. It’s no longer about what experience you want to offer your customer. What can you offer your customers beyond the transaction, in their personal lives? Customers expect companies to know their dreams, ambitions, and frictions, and that they contribute to these in a credible way.
This results in a kind of ‘bothism’, where customers don’t want to make choices or trade-offs. They want a great experience online and offline. They want to buy products at a good price but also produced in a sustainable way. So, in the end, customers want the same thing as before the pandemic: good products and the best possible experience. Those have become evident. However, COVID has acted as a tailwind that led to trends becoming mature faster than we expected.
#2: Define which consumer trends are relevant to your industry
The massive increase in online ordering also creates pressure on other parts of your organization like the supply chain and logistics. Consumer trends like Black Friday and CyberMonday only add to that challenge. In Belgium for example, Hema had to cancel its Black Friday action week because Bpost had trouble keeping up with deliveries. So, moving into 2021, it makes sense to ask yourself:
- Is it worth consistently decreasing the value of your products? In the end, consumers will postpone their purchases until the next big price reduction comes along. This drives money now, but what is the long-term effect on your value proposition and your purpose as a company?
- Do customers really need next-day delivery? If you think about it, there are only a small fraction of products that consumers really need the next day. For most things, they can easily wait a bit longer. So, is next-day delivery really needed? Do customers think it’s more important than sustainability?
These trends might be the norm, but are they relevant to your company or your industry? In the end, trends are generalizations of reality. They help you define what are important topics to discuss with customers. But if you want to figure out if it’s the right thing to do for your company, you need feedback. You need interactions with your customer.
#3: What will physical customer experiences look like in 2021?
Before the pandemic, many people thought that physical interactions were going to disappear, especially in retail. But that is not entirely true. Today, the difference is that online and offline can’t be a simple copy-paste of each other anymore. Companies need to understand what both channels have to offer to the customer.
2020 taught customers the convenience of online. So, in 2021, organizations have to find out the additional value of offline. Before the pandemic, Ikea for example already experimented with smaller flag-ship stores in city centers. These have become experience stores that are meant to inspire. And in the end, you can easily order online or via a kiosk in the store. For part of their target audience, this could be the Ikea store of the future.
For other industries, we see the same trend too. Take banking for example. Customers like to take care of financial matters digitally. But when we have a serious problem in our life, we want physical contact and we want to talk to an agent. The only difference is that our expectations will be much higher because there’s already so much information to find online. So in 2021, organizations will have to find out how online and offline can complement each other, and what value you want to bring in either of those channels.
To wrap it up
In many areas, 2020 has been a year like no other. But when we look at customer behavior, not much has changed. The pandemic only accelerated certain trends and expectations much quicker than we expected. In 2021 organizations will have to think hard about their purpose and how they can bring value online and offline. For that, they need to understand their customers’ dreams, fears, and expectations and adapt the experience accordingly.