In the current marketing environment, there’s quite a disconnect between what brands believe consumers want in terms of customer experience and what consumers actually feel they want. While core consumer needs haven’t changed radically, how consumers want brands to deliver those needs has. Brands need to take steps to close this disconnect and provide the experiences consumers want.
Thankfully, Alliance Data has stepped into the fray. The tech company has recently published a study entitled “The Great Divide: Connecting Brands to the Real Needs of Today’s Consumer,” which explores the communications and marketing experiences that consumers most want. To learn more about this study, Loyalty360 spoke with Shannon Andrick, Vice President, Marketing Advancement, Alliance Data.
What was your team seeing in the market that led you to embark on this particular piece of research?
Retail is in the middle of a great reinvention. With all of the innovation and disruption in the landscape, we were interested in learning where consumers’ expectations had changed in the brand communications and marketing experience. At the same time, we wondered what core needs had stayed the same and, most of all, if brands are on the same page as their customers.
How were consumers’ expectations different from what brands believed to be important?
Within our research, several key gaps emerged between what consumers want and what brands are delivering. First, many brands struggled to prioritize what is most important to consumers, ranking all of the marketing and communications elements we mentioned as important. In contrast, consumers clearly indicated a wide range of priorities and needs, each with varying importance. After studying consumers’ perceptions of 31 different needs, three themes emerged: simplicity, personalization, and control. We found that consumers are seeking a simpler experience, more relevant personalization, and additional control over the brand communications they receive.
Were there any generational differences in consumers’ expectations? How about between retail verticals?
Each generation does have its own expectations for brand interactions. As expected, younger consumers (Gen Z and millennials) tend to engage with brands digitally far more often than older generations. However, it’s important to note that older consumers are still engaging digitally—just not at the same rate.
Consumers also set the bar very differently based on where they’re shopping. For example, specialty retailers have the highest percentage of consumers following them on social media, while general merchandise retailers have the lowest percentage of email subscribers, and consumers shopping for home décor and furnishings are most likely to recall online display ads. These results emphasize the importance of understanding where each brand’s consumers place their priorities, then testing and tailoring strategies accordingly.
How does digital engagement change what consumers want or expect?
Our research found that digitally engaged consumers have more needs overall. Consumers who use mobile apps or social media to engage with a brand also shop more frequently overall—both online and off. These consumers have higher expectations when it comes to ratings and review features, they want more control over the kinds of content they receive from a brand, and they have a higher desire to see photos within social media posts from a brand. Their appetite for technology offerings is also higher, as they are more likely than other consumers to use a retailer’s technology offering.
Speaking of technology, did consumers express interest in the latest and greatest technology innovations?
We certainly know that technology can drive consumer satisfaction. We’ve found that the key is understanding which offerings and innovations offer the most value to consumers—separating fads from value drivers. This can help brands decide where to focus investments in time and resources. Specifically, across all generations, there is a greater preference for innovation and technology that meaningfully enhance the shopping experience, especially those that deliver ease and convenience. For example, buy online/pick up in store had the highest consumer adoption rate at 31 percent, while virtual reality had the lowest, at 3 percent.
What aspects do you think are most important for marketers to understand as they begin their 2020 planning?
At the highest level, it’s critical for brands to continue to innovate and test new concepts, while not losing sight of the basics that matter most to customers. From a strategic perspective, that means simplified experiences, relevant personalization, and more control over how they engage with the brand. Starting with these three key elements, marketers should look for opportunities to add meaningful value to the consumer’s experience. Tactically speaking, we can see that digital engagement is having a significant impact on consumers’ expectations. As they innovate, brands should clearly identify their digitally engaged consumers and develop plans that speak directly to their needs.
Conclusion
As Alliance Data’s data has shown, brands can’t just provide customers the products that they want. Brands also have to offer frictionless, individualized experiences across all channels. They also need to innovate and develop customer-centric processes. Those that do should have a great deal of success.
To view the report, click here.