As discretionary spending shrinks, brands need to know more about their customers than ever before. Here, Lindsay Forster, CEO of Shepper, discusses how companies need to evolve and learn given the ever-changing circumstances their guests are experiencing.
There are rough waters ahead for the UK economy. That was the unavoidable conclusion from the Bank of England’s commentary in August, with predictions of a long recession, continued high inflation, and real drops in household income. Higher interest rates combined with higher energy bills are sure to see consumers tightening their belts across the income spectrum. Consumer confidence dropped to its lowest ever level in the GFK survey earlier this year, and has stayed there since.
In a warning to established brands across the country, Sainsbury’s boss Simon Roberts has recently revealed a huge boost in customer’s choosing own-brand products at their supermarkets, over household names. But not all brands will face this issue: Unilever, which owns a legion of respected brands, looks set to keep profits rolling in through the cost of living crunch as the brands it owns have such strong relationships with customers. There are ways to weather this storm, and even weather it well, if positioned correctly.
Getting through the storm will be far easier for companies that have a map, a map built on detailed market research. It is more important than ever for brands to know as much as possible about their customers, and the experiences their customers have when interacting with their brands. Market research is always crucial, but the real possibility of loyal brand devotees leaving makes it of utmost importance right now.
Despite its importance, the wider market research industry does not look that different than it did when we last had a prolonged recession in 2008. It’s still the same old mystery shoppers, who often don’t represent target customers, turning up in areas they don’t live in during work hours, then filing a weekly report.
That creates a huge data imbalance. Brands can know an extremely large amount about how customers interact with their websites – how long they leave an item in their basket before buying it, how they browse between different items, even how long their mouse hovers over “buy” – but almost nothing about how they interact with goods they actually hold in their hands within their stores.
Shepper aims to address the imbalance, giving brands the kind of real-time insights they get about their online store for the real world too. We do this by paying tens of thousands of real people across the UK to go out and undertake market research in their own communities, at all hours of the day, often alongside their normal chores. If needed we can get reports ready in just hours, not weeks, and can get richer data too.
What does that mean in practice?
It could mean A/B testing a retail strategy in the real world in real time. One store tries one promotional display out, one store tries another, and within hours you can know which one is more successful as our “Shepherds” record which shelves are emptying – and whether your promotion is being displayed properly in the first place.
But why stop at consumer goods? It could mean detailed data on exactly how good the customer service is at your flagship store for someone who has a physical disability. It could mean a rapid report on how every storefront you have across the country looks right now, not two weeks ago.
This kind of research will also let you understand how seamless your online and real-world experiences are. Is a customer returning a product that they brought online being offered the same level of service instore?
As discretionary income starts to tighten, many brands are likely to see a drop in sales. It would be easy to blame this entirely on the worsening economic situation, which will certainly contribute. But a huge number of people are still going to be buying plenty of goods and services – knowing exactly why they might be stopping interacting with your brand specifically will be key. And if they’re not – what aspects of the brand experience are keeping them hooked?
This will be crucial not just for big-name brands that may already have sophisticated data about their stores, but for smaller companies too. The few key retail opportunities that a SME may have are even more important for them than a single high street store is for a mega-brand.
It will also be important for experiential-based businesses. Consumers have been increasingly turning from products to experiences as Covid-19 restrictions have lifted – we all realised during the pandemic that no number of new online delivery packages quite replaces the feeling of experiencing something in real life with loved ones. With the memory of lockdowns so close, experiences are likely to be something price-conscious consumers cut the last. Given that, experiential businesses will have to make sure each and every moment of whatever experience they sell goes as smoothly as possible.
Good market research isn’t going to stop the cost of living crisis hitting your company in some way. But the devil you know is better than the devil you don’t – it is always better to be prepared.