Tag Archives: Gekko

Spring in the Step for Retail – Gekko Research

As the UK heads towards the spring and an enhanced bank holiday season, millions of consumers have revealed they are planning to go shopping on the forthcoming Bank Holiday weekends. These shoppers are more likely than ever to do this with friends and combine shopping with other leisure pursuits.

​These are some of the findings of a new research report commissioned by creative customer experience marketing agency Gekko and carried out by YouGov. The survey of 2,000 consumers reveals that 13% (9 million)* are definitely planning to hit the physical shops and this rises to 18% of 18-34-year-olds, presenting retailers with a meaningful opportunity for sales uplift.

Indeed shopping is the fourth most popular (12%) Bank Holiday activity behind going for a walk, (45%) visiting family and friends (41%) and going out for a meal (25%).​ 19% of respondents also revealed they are likely to spend more on a Bank Holiday weekend than an ordinary weekend, equating to 13 million people. The most popular sectors for retail visits are home improvement (DIY, garden centre) at 22%, fashion (21%), homeware/ home furnishings (16%) and department stores, 14%.

The sociable modern retail experience

The survey also revealed more about the modern retail experience and what Brits are expecting from their visits to High Streets and Malls. Interestingly, retail is increasingly a sociable experience, especially for younger shoppers. 

45% of people combine shopping with a meal out, (rising to 53% of 35 – 44-year-olds) and 30% with meeting a friend for a coffee/ drinks (rising to 40% of 25-34-year-olds).​ Meanwhile, 55% of us prefer shopping for the home with family and friends versus 39% who do it solo.​ 

60% cite a pleasant retail environment as an important factor in a great retail experience with a marked split between women and men (67% v 53%).59% want to see promotions, while 42% want to be able to engage with knowledgeable shop staff. 

The top reason, when able to select all applicable, for in-person shopping versus online is to try before you buy (47%). The opportunity for physical retailers to play to their strengths here is huge, with this 47% equating to £233bn* in spending based on 2022’s retail sales. 

Retailers urged to transform their thinking

On the back of the findings Daniel Todaro, MD of Gekko is urging retailers to transform their thinking about retail and how to encourage customers instore.

“Our research clearly indicates that we are seeing a real trend toward retail as leisure. After two years of lockdowns, largely working from home and soulless deliveries, shoppers appreciate the benefits of a good physical retail experience. This is underpinned by sociability, combining a trip with meeting friends and dining. Retailers and brands need to complement this by providing an enticing and human-centred experience.”

He continued: “Too often we are seeing a rather nonchalant approach and attention given to customers which equates to potential lost opportunities. Retailers must think creatively about how to enhance the customer experience. A great environment, attentive and knowledgeable staff is more important than just focusing on promotions. With a potential audience of millions on the forthcoming Bank Holiday weekends, retailers can champion the timeless values of a good retail experience to enhance the customer journey.”

To read more about our research, click here

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Five factors driving purchase behaviour in the current climate

The last few years have seen a series of unprecedented events that have created a new paradigm where consumer expectations and needs have been radically redefined. In this new world, retailers need to respond with a new approach in tune with our changed times. 

So how did we get here? Firstly, the pandemic’s cultural legacy has been a shift to a life where many of us continue to work from home, meaning retail businesses need to cater to a new stay-at-home existence. Meanwhile post-pandemic we have seen political instability and huge inflationary pressures impacting many. The climate crisis is also becoming more apparent on the back of record global temperatures and a series of catastrophic natural disasters. This is also feeding into permanently changed behaviour from millions, particularly younger consumers.

For every retail marketer, an evolving playbook is needed for this new age to respond to this evolution of behaviour. Both cultural, economic and environmental. Based on some recently commissioned research with YouGov, we identified five key factors driving behaviour at this time.

1) Affordability

This means something different to everyone, but in a recession or a flatlining economy, customers spend differently. So what does affordability mean for your consumer and how do brands accentuate this factor? I recently spoke alongside AMDEA who are the body that represents the white goods industry in the UK, who did some research in relation to the Eco buttons on washing machines and dishwashers.

They revealed it was saving consumers on average £90 a year. They now really highlight this fact to drive consumers to brands promoting this feature either in store or online. Knowing that affordability is a critical criteria for consumers, brands can smartly promote the long term savings they can offer. Perhaps paying back the cost of the appliance within five years. When you multiply this reduction in energy costs across several appliances in the home, you can see how the savings increase.

Furthermore the energy saving ‘eco’ modes can provide a win/ win of appealing to sustainability minded consumers.

2) Essential trumps desirable

We are seeing far more caution in the market for spending on big ticket items in particular.   Therefore positioning your products as ‘essential’ items in the psyche of your target audience is important as part of the marketing mix.

Perhaps the days of assuming there is an implied need for your brand are no longer present. Disposable income in all households, even middle earners, is becoming more scarce. They may want your product. That desire may be there. They may covet it. They may feel that they need it, but unless it’s absolutely essential and integral to their life, they are not going to buy it. 

Therefore highlighting why your products are ‘essential’ to their needs. It is not so much that it is on offer but more, how does it add genuine value to their lives? Why is this going to be a product they can’t live without? Tapping into the primal needs of the customer in more challenging times is a way retailers can craft their story and resonate honestly with their target audience.

3) Durability

As an extension to being essential, people will need to feel that the item that they are buying is built to last for more than the lifespan of your average reality star.  Low down on the list of drivers influencing behaviour in today’s climate are more ephemeral qualities like perceived ‘brand value’.

Rather than offering a lifestyle associated with a brand or product, retailers could focus on the quality of their products. This should be the starting place for a conversation about a brand and how it will last for someone whose budget is going to be squeezed for some time. The hardiness of your products, particularly for those more expensive items in your range, is crucial. No one likes being ripped off but people are far less willing to tolerate buyer’s remorse in a recession.

Indeed we are now in a new reality where brands have to accept quality and durability is delivered at a more affordable price point. Certainly if they want to maintain market share. Losing market share in a downturn can be very difficult to recover from, when times return to being good. Long term thinking needs to trump short-termism.

4) Sustainability

The longer something lasts, of course the more sustainable it is. Sustainability is a huge driver for younger generations. Far from moving away from this priority at a cash strapped time, consumers are in fact doubling down. Indeed research from SAP revealed that despite the cost of living, over half (52%) of UK consumers aged 18-34 were actively looking to shop more from retailers with strong sustainability credentials last Christmas. 

This is not greenwashing but also understanding this generation will do their research about the full life cycle of a product. The good news is the extent to which this isn’t something that needs to sit in isolation to your other brand positioning. If something can save money through assisting less energy use or being more durable it is therefore more sustainable and solves for a number of current consumer concerns.

Think through the life cycle of your products and make sure they stands up and are robust. It is not just a page on your website espousing your values, but should run though your whole business model like a stick of rock (made with ethically sourced sugar).

5) Innovation

Finally innovation remains of critical importance. To grow you have to be of relevance tomorrow as well as today. Particularly when there is a real need to stand out from competitors with people less willing to make multiple purchases. 

Indeed innovation plus value has also been a winning facet of the trend for air fryers. Indeed according to research by price comparison website PriceRunner, demand has soared by 3,000 per cent since 2021.

However critically the air fryer answers several other current consumer needs states. We, post-covid are eating at home more and it is a way of getting your family and your friends and getting your kids involved. It is also healthier. This addresses the growing trend for healthier versions of popular meals.

Most crucial to the surging trend though is the value proposition. The money that can be saved through cooking at a time of rising energy costs is significant and of course energy efficient.

In summary, retailers do need to recognise changed behaviour and a new paradigm on the back of a series of interconnected trends and crises. These centre on changed lifestyles that are more based in the home, a growing movement for sustainability and most crucially the need to save money.

Consumers quite simply won’t invest in the way they did before meaning retailers need a laser like focus on their new needs states. The values they need to highlight are: value for money, being essential, durability, sustainability and innovation. The more they can be all of the above, the more customers will respond.

To remain relevant as we face an economically challenging climate is tough.  For some, this will require a radical step change.

To read the full article by Daniel Todaro, Managing Director please visit Retail Sector

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What did CES 2023 offer up in the current cost of living era?

CES is the annual (notwithstanding Covid) tech industry gathering in Las Vegas that showcases the latest technology and products in the consumer electronics industry. Did the 2023 show present any hope for consumers struggling with cost of living pressures?

Recent Gekko research revealed that the cost of living crisis has had a dramatic impact on consumer spending with 66% slash spending on non-essential considered purchases and 43% on essential items. On a day-to-day basis, the main priority for many is ensuring that the bills can be paid and as a result, a large proportion of homeowners are looking for ways to save money, whether that’s cutting back on the heating or even switching appliances to save on electricity.

So, against this backdrop, we watched with interest for the big reveals and announcements that were coming out of CES in the first week of January to see what might appeal to cost-conscious consumers thinking of investing in money-saving and more efficient solutions for the home.

It’s no surprise that a tech giant like Samsung managed to grab headlines at CES and the updates to their smart home solution certainly presents some tangible savings for homeowners. Samsung’s SmartThings Energy and in particular their new AI Energy Mode which offers support for more devices and regions with even more significant savings. This new update includes 15% more energy consumption savings for compatible refrigerators, up to 20% for compatible air conditions and up to 35% for compatible washers on selected cycles. This update will allow the user to save electricity on these products which equates to savings on the user’s energy bill. The SmartThings Energy service which can be viewed on the SmartThings app available on both Android and iOS can show the energy consumption of the user’s SmartThings products and how much the estimated cost is. You can view this by day, week or month and it will even break down the energy consumption per hour. This app is very handy to keep track of the “Demon Appliances”.

If multitasking is your thing then a desk, bike, and computer combo might just appeal, with the added benefit of saving yourself a bit more money on your electricity bill. The eKinekt BD 3 from computing brand Acer addresses this somewhat niche requirement. They have branched out into the world of fitness with their eKinekt BD 3 exercise bike which is designed to be a desk, where the user can work and exercise at the same time whilst also producing electricity that can power the user’s laptop. Acer stated that cycling at a somewhat leisurely pace of 60 RPM (revolutions per minute) for an hour can generate up to 75 watts of power.

Moving out into the garden, a new solution to tackle water wastage was announced. The Moen Smart Sprinkler Controller can monitor the moisture levels of your soil and tracks local weather conditions. The user can also monitor water usage and estimated savings as well as set up customised watering schedules that take advantage of weather tracking so the sprinkler will not activate if the rain is predicted in the area which in turn will save the user money. Thinking about the UK 2022 summer drought, this kind of solution would certainly help users become more efficient in their use of water, cutting consumption, wastage and cost.

Although not announced at CES, something that has been gathering a lot of momentum recently and will be featured on the spec sheets of many new products revealed at CES is Matter, a new proprietary standard for home automation that has the potential to offer indirect savings for consumers. Matter is essentially Smart Home 2.0. In simple terms Matter is a new wireless standard that should unify the smart home and make operation easier for users. This means that every smart device you may have such as a smart plug or smart light will talk to each other as opposed to how it used to work with each device being locked to that specific manufacturer and then locked to a specific control centre such as Google Home or Apple Homekit. Until now, with non-compatible standards, consumers have essentially been locked into a brand/product’s ecosystem if they want full functionality. However, now the user will be free to mix and match and not worry about losing the functionality of their products because they’re mixing manufacturers, this, in turn, will save the consumer money as they can take advantage of sales rather than having to wait for that one specific product to drop in price as there are always alternatives for every smart home product.

This is by no means a conclusive list of products that can help consumers save on their household utility bills but rather some of the notable ones that we saw coming out of CES2023. There are of course other products either already available or coming onto the market that can assist with saving on energy consumption. From smart plugs that can be turned on and off remotely so helping users cut down on energy consumption to readily available smart light bulbs, which being LED, offer immediate tangible savings over traditional light bulbs.

CES 2023 was a step in the right direction for sustainability and pro-consumerism, with a lot of companies focussing on the overall sustainability of their products and ensuring that energy consumption is kept to a minimum as in these current times saving money on the electricity bill is a must. This all ties in with the increased industry focus on home appliances and energy saving. In the UK trade body AMDEA is educating the home appliance retail sector on how consumers can make savings when using products as part of its highly successful Know Watt’s What campaign in helping combat energy price rises.

In terms of pro-consumerism, one of the most important updates to come from CES 2023 as mentioned earlier is Matter which opens up the opportunity for consumers not to be tied down to specific manufacturers and allows full Smart Home Freedom. Expect smart home brands to be increasingly vocal about their Matter integration and compatibility.

You can read more by Callum Puffett, Marketing Executive by visiting Gekko News
Photo by CES

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How brands can stay front of mind in an era of continuous disruption

Daniel Todaro, managing director at creative customer experience marketing agency Gekko, advises readers on what is driving consumers during these difficult times and how brands might best react.

We are living in an era of significant disruption, requiring an updated approach to brand communication in sync with our times. The question is do brands need to redefine their raison d’etre to stay relevant to appeal to very changed consumers?

A new paradigm

The pandemic’s cultural legacy has been a shift to a life where many of us are at home more and need products and services that cater to a new stay at home existence. Meanwhile, the aftershocks of the pandemic have caused huge inflationary pressures impacting many. This has created a new economic reality where affordability trumps desirability.

In a recent research study we carried out with YouGov we interviewed a cross section of consumers throughout the country to understand what is now driving purchasing behaviour. We uncovered five key motivating factors driving purchasing behaviour at this time. Brands need to respond to these if they want to remain front of mind for modern consumers.

1) Value for money
In a world of soaring costs and stagnant wages, consumers revealed that one of their key reasons for making a considered purchase was the value for money a product offered. Brands should react by smartly promoting the long-term savings they can offer.

For example, AMDEA, the body representing the white goods industry in the UK, did some research in relation to the Eco buttons on washing machines and dishwashers. They revealed it was saving consumers on average £90 a year. They now really highlight this facet to drive consumers in store to purchase their members’ products.

2) Essential trumps desirable
Positioning your brand and products as ‘essential’ items in the psyche of your target audience is a second key factor, also borne out by our research. The days of assuming there is an implied need for your brand are no longer present.

Disposable income in all households, even middle earners, is becoming scarcer. The ONS has estimated the biggest fall in living standards in 2022/23 since records began. Consumers may want your product, but unless it’s absolutely essential and integral to their life, they are not going to buy it. So why is this going to be a product they can’t live without?

3) Durability
As an extension to being essential, people will need to feel that the item that they are buying is built to last for more than the lifespan of your average reality star. Low down on our list of drivers in today’s climate are more ephemeral qualities like perceived ‘brand value’.

Rather than offering a lifestyle associated with a brand, a brand should focus on the quality of their products. This should be the starting place for a conversation about a brand and how it will last for someone whose budget is going to be squeezed for some time.

4) Sustainability
The longer something lasts, of course the more sustainable it is, and this is a huge driver for younger generations in particular. Far from moving away from this priority at a cash strapped time, consumers are in fact doubling down. Brands should be wary of greenwashing and understanding this generation will do their research about the full life cycle of a product.

5) Innovation
Finally, innovation was identified as the fifth key driver of consumer purchasing behaviour in the current climate. This is why Google has attracted new customers with both the value of their Pixel phone but also its innovative Magic Eraser functionality.

Indeed, innovation plus value has also been a key driver of the demand for air fryers. According to research by price comparison website PriceRunner, demand has soared by 3,000 per cent since 2021. The money that can be saved through cooking at a time of rising energy costs is significant and of course energy efficient.

The air fryer also answers several other current consumer need states. We, post-Covid, are eating at home more and it is a way of getting your family, your friends and your kids involved. It is also healthier.

It is crucial that brands adapt to remain relevant. For some this will require a radical step change. As author Mandy Hale put it: “Change is painful, but nothing is as painful as staying stuck somewhere you don’t belong.”

To read the full article please visit Transform Magazine
Photo by freestocks on Unsplash

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Adapting For The Peak Season & Beyond

The Festive period is here and every retailer is gearing up for a rather different Christmas than we may have considered normal, the Christmas cookie-cutter approach is no longer relevant and adapting to your local audience is critical to success. We are living in a time of significant disruption and reimagined stability, requiring an updated approach to brand communication in sync with our times, a more cost and sustainable time. Established brand value propositions built up over many years are increasingly becoming irrelevant in a world reeling from a pandemic, a nonsensical war in Europe, embedded inflation and a recent economic crisis. The retail environment we all knew as recently as 2019 is becoming more like a faded memory of a bygone era.

The question is do brands and retailers need to redefine their appeal to stay relevant to a shifting consumer appetite based primarily on economic and environmentally, socially relevant trends? Particularly when facing a predicted period of prolonged economic downturn throughout the world, making the most of this festive trading period is essential in order to capitalise on the nation’s consumers’ appetite to shop either for themselves or as gifting.

A New Paradigm

Due to the change in how we lived that we experienced recently, the legacy lives on and our needs have been radically redefined. The pandemic’s cultural legacy has been a shift to a life where many of us are at home more and need products and services that cater to a new stay-at-home existence.

Meanwhile, the aftershocks of the pandemic and political instability and market fluctuations have caused enormous inflationary pressures impacting many. This has created a new economic reality where affordability trumps desirability in the purchasing behaviour of millions. Including those who perhaps considered themselves more ‘well off’.

The climate crisis is also front of mind and certainly hasn’t dissipated despite the more immediate worries. Events like COP 27 educate us to do more by increasing awareness and encouraging changes in living habits.

For every retailer, a new brand playbook is needed for this new age. Our understanding of consumer behaviours is understood better through research. A recent study we conducted with YouGov pointed to five key motivating factors driving consumers’ intent to purchase. These may assist to ring in the cheer for your store during this ‘peak’ period.

1) Affordability

In a survey of 2,000 consumers, we asked people what were the key drivers that would persuade them to make a considered purchase? The number one reason, perhaps unsurprisingly, was that it was within their budget. I recently spoke at the ERT Turning Point conference alongside AMDEA, the body that represents the white goods industry in the UK who did some research in relation to the Eco buttons on washing machines and dishwashers etc.

They revealed it was saving consumers on average £90 a year. They now really highlight this facet to drive consumers in-store to purchase their members’ products. Knowing that affordability is a critical criteria for consumers, brands can smartly promote the long-term savings they can offer. Perhaps paying back the cost of the appliance within five years. When you multiply these savings across several appliances in the home, you can see how the savings increase.

Furthermore, the energy-saving ‘eco’ modes can provide a win/ win of appealing to sustainability-minded consumers, particularly Gen Z, who also want to save money and the planet, as we all should be focussed on. Retailers can also benefit by highlighting appliances with these features as part of their promotional marketing as more and more consumers are having to rely on eco settings to reduce energy bills.

2) Essential Trumps Desirable

For 73% of consumers in our survey, the idea that a product was ‘essential’ was a key reason they would consider a considered purchase. Therefore positioning your products ranged as ‘essential’ items in the psyche of your target audience is important as part of the marketing mix.

Perhaps the days of assuming there is an implied need for the categories are no longer relevant due to changing consumer lifestyle and habits. Disposable income in all households, even middle earners, is becoming more scarce. They may want a product. That desire may be there. They may covet it. They may feel that they need it, but unless it’s absolutely essential and integral to their life, they are not going to buy it. At least not just yet maybe, unless you can convince them otherwise. Think about how you do this.

The lesson is therefore highlighting why your ranges are ‘essential’ to their needs. It is not so much that it may be that there’s an offer but more, how do they add genuine value to their lives? Why is it potentially going to be a product they can’t live without? Tapping into the primal needs of the user in these turbulent times is a way a retailer can craft their story and resonate honestly with their target audience.

3) Durability

As an extension to being essential, people will need to feel that the item that they are buying from your store is built to last for more than the lifespan of your average reality star.

Rather than offering a lifestyle associated with a brand, as retailers, you can focus on the quality of the products you are selling them. This should be the starting place for a conversation about a brand and how it will last for someone whose budget is going to be squeezed for some time. The hardiness of your product, particularly for those more expensive items you may range, is crucial. No one likes being mis-sold an item but people are far less willing to tolerate buyer’s remorse in a recession. Dob this at your peril, as it’s likely that you’ll never see that customer again

Consumers are also now genuinely asking, why do I have to pay more for quality? Surely, even if I’m buying at the entry-level of the range, it should still be a quality product. The craftsmanship of its build and robustness need to be communicated to the customer clearly and honestly by your staff to all without bias. 

Indeed we are now in a new reality where brands have to accept quality and durability is delivered at a more affordable price point. Certainly, if they want to maintain market share. Losing market share in a downturn can be very difficult to recover from when times return to being good. Long-term thinking needs to trump short-termism. This changes the way in which you sell to your customers of all demographics.

4) Sustainability

The longer something lasts, of course, the more sustainable it is. Sustainability is a huge driver for younger generations. In our research sustainability came through as a top driver of behaviour for 23% across all age groups and rising significantly to 38% for Gen Z. 

Far from moving away from this priority at a cash-strapped time, consumers are in fact doubling down. Indeed new research from SAP reveals that despite the cost of living, over half (52%) of UK consumers aged 18-34 are actively looking to shop more from retailers with strong sustainability credentials this Christmas.

They want to understand that a product is not destroying the planet. This is not greenwashing but also understanding this generation will do their research about the full life cycle of a product. The good news is the extent to which communication forms part of the sales process enables these factors to be included in the discussion. If something can save money by assisting less energy use or being more durable, it is therefore more sustainable and solves many current consumer concerns.

5) Innovation

Finally, innovation is the other key driver of consumer purchasing behaviour in the current climate. Indeed innovation plus value has also been a winning facet of the trend for air fryers. Indeed according to research by price comparison website PriceRunner, demand has soared by 3,000 per cent since 2021. This an opportunity to be understood and embraced to appeal to your consumers this gifting season.

However, critically the air fryer answers several other current consumer needs states. We, post-covid are eating at home more and it is a way of getting your family and your friends and getting your kids involved. It is also healthier. This addresses the growing trend for healthier versions of popular meals.

Most crucial to the surging trend though is the value proposition. The money that can be saved through cooking at a time of rising energy costs is significant and of course energy efficient. This is why we can be sure that this may be one of the most popular Christmas gifts this year as already on Black Friday it became a sell-out line in numerous brick-and-mortar stores and online with Curry’s stating they sold more than 18,000 during the week of Black Friday.

In summary, retailers do need to recognise changed behaviour and a new paradigm on the back of a series of interconnected trends and crises. These centre on changed lifestyles that are more based in the home, a growing movement for sustainability and most crucially the need to save money.

Consumers simply won’t invest in the way they did before, meaning retailers need a laser-like focus on their customers’ new needs. The narrative a retailer needs to highlight is value for money, why it’s essential, the product’s durability, sustainability and its innovation.

To remain relevant as we face an economically challenging climate is tough.  For some, this will require a radical step change. For others, it’s underway and the new normal.

To read the full article by Dan Todaro, Managing Director please visit ERT Online

Photo by Carl Raw on Unsplash

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Adapt And Thrive: How Retailers Can Succeed in 2023

The cost of living crisis era has shaped much of this year and looks set to be a trending topic well into next year. While we would all like to see the worst of it behind us, the latest OBR forecasts show that economic recovery is still some time away, with their data predicting a 7% decrease in household incomes in the coming two years. Read on to see how retailers can succeed in 2023.

A recent survey conducted of 2,165 respondents by the Gekko group and carried out by YouGov highlighted just how much spend has already been restricted in certain categories. It identified that 66% of those surveyed said that they are cutting down on non-essential items. 43% were decreasing spend on their essential household goods.

While these headlines confirm the severity of the situation the country finds itself in, within the retail sector the way consumer behaviour has changed as a result still presents opportunities for brands and retailers to succeed.

Gen Z Least Likely to Cut Spending

Interestingly 52% of 18-24-year-olds in our survey said they were decreasing their spend on non-essential purchases, the lowest of all age groups. Gen Z are brand focused and remain loyal to those that match their values in ethics and sustainability. Employed and with new money in the bank, this tech-enabled generation is just as willing to engage with brands both in-store and online.

At the other end of the spectrum, as we get to the older categories, there are further cutbacks with 75% of 35-44 saying that had reduced non-essential purchases. Of course, these older generations are likely to have more disposable income with which to keep up their levels of spend. Often being homeowners, these customers are the most likely to be purchasing big ticket electronics items like appliances, and therefore are particularly discerning about the quality and durability of these products.

Regardless of your target group, it is important to remember that there are valuable inroads to sales across the generations. A customised approach is required to provide a meaningful connection, translating through the customer journey to purchases.

Recession-Proof Premium Market

Much focus has been on consumers trading down for their purchases, but data also shows that the premium market has also been relatively recession-proof for a number of reasons. Premium customers are more likely to have kept purchasing regardless, being less affected by cost of living growth. Meanwhile other groups are also likely to invest in high quality devices as they are built to last, crucial with the cost of living squeeze likely to last.

According to Counterpoint Research, there was a 95% YoY growth in smartphone sales over $1000 in Q2, highlighting the ongoing demand for the very best devices. With their ranges coming into focus across all demographics, Premium bands can capitalise on this interest by offering accessible routes to their products through pricing plans and brand marketing.

Trading up and down for items is one way that consumers are switching products or brands, but there are others to look out for. We found that 48% of respondents were willing to switch for non-essential purchases as a result of the impact of the cost of living crisis. Within the electronics sector, budget (69%) and durability (52%) were key motivators to switch, with sustainability (23%) the third most important driving factor. The sustainability topic is not one that is going to fade away and is a particularly important one for younger Gen Z customers, who will connect better with brands that show ethical credentials.

So how can retailers and brands continue to succeed in this turbulent period? The ongoing lessons learned from the events of the past two years remain relevant.

1. Remain Adaptable

Showing adaptability when it comes to your consumers’ needs is imperative. Be prepared to pivot your messaging based on their needs now will pay dividends. This will stand you in good stead to succeed when the economy and consumer confidence begins heading in the right direction.

2. Continue to Invest In Your Brand

Building loyalty now will pay off in the long run, and investment in your brand during challenging times will pay off later with others disappearing from view. Discerning customers are looking for the best products at the best deal, therefore brands need to reinforce just why they should choose them.

3. Demonstrate Your Brand Values

Shouting about the values of your brand is also vital. We have seen evidence that consumers across demographics will stay loyal to those that they feel an affinity with, so to do that they need to know who you are and what you stand for. This can be through marketing activities in-store, online or across all channels simultaneously.

A recent LinkedIn survey highlighted that 78% of respondents agreed brands that maintain or increase their marketing spend during economic troubles are the best placed to recover faster afterwards.

4. Show Empathy With Your Audience

Demonstrating empathy in your go to market strategy during this cost of living crisis will ensure you remain relevant with all consumers when competition for attention is at its fiercest.

A positive omni-channel customer journey will lead to better engagement and enjoyment for the consumer. After all, a bit of joy goes a long way in these challenging times.

To read the full article by Tom Harwood, Data and Insight Manager please visit Talk Retail
Photo by Michal Matlon on Unsplash

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How retailers can win customers in a more challenging climate

As we enter this critical quarter for retailers, they are faced with a series of new challenges dampening consumer confidence. The impact of inflation with consumers facing real term pay cuts, the impact of increased energy costs and now surging mortgage costs on the back of a disastrous mini-budget, which the effects are unlikely to be reversed as quickly as they were created. 

A headache-inducing cocktail of challenges in this critical time for boosting the bottom line. Yet retailers have shown remarkable resilience and adaptability over the past two years to continue to offer customer-centric strategies. They will need these qualities to continue to survive and thrive. 

So how to react? In a recent study we carried out in conjunction with YouGov, we wanted to look at the impact of this inflationary period on consumer behaviour. What are the drivers of purchasing in these challenging times and what is the impact on cross category purchasing? By understanding the motivations of different consumers at this time retailers can ensure they truly focus on their needs. Those that do will be rewarded.

Consumers cutting spending on essential items

The research highlighted that the cost of living crisis is being felt at the sharpest edge by those on the lowest incomes. Many are struggling to afford the basics as energy bills have rocketed, despite the support package now being provided.

For essential household items, more than 2 in 5 respondents revealed they had reduced their spending (43%). Of these, 1 in 3 (32%) have cut spending on essential household items by more than 15%. 3% have cut spending on essential items by more than 50%.

There are some significant variations, based on gender, location, age and financial situation. 48% of women have reduced spending on household items, vs 38% of men. Of those who have reduced their essential household spending, home owners (of any type) are the most affected, with 63% saying they had cut spending by up to 15%, compared to 51% of renters.

Londoners are least likely to cut spending significantly. Of those who have reduced their spend on household essentials, just 2% of Londoners are cutting spending by more than 50%. Meanwhile in the East of England this rises to 6%, and 7% in the North West.

This highlights the uneven nature of the situation and the need to not have a one size fits all strategy in communicating with audiences.

Spending plummets on big ticket items

For considered purchases, 52% of 18-24 year olds have cut back on spending, compared to 68% of 25-34 year olds and three quarters (75%) of 35-44 year olds. The categories hit hardest by a cut back in spending of consumers of these goods are: Consumer electronics and homeware and home furnishings with 61% of consumers of these goods reducing spending. Next was Clothing & apparel 60%, DIY and garden, 50% and Baby and child, 41%. As the cost of living increases and the ability to secure a new mortgage or afford the one you already have will impact further the decision factors around a considered purchase.

The factors driving purchases in today’s climate

Of those factors we know that are driving purchasing behaviour for more expensive items. In today’s environment the number one factor driving a considered purchase is that something is within budget, 69%, durability/ being fit for purpose was next, 52%. Third in the list was sustainability, still favoured by 23% of respondents. Brand awareness was considered by just 13% of respondents. For Gen Z (18-24 year olds), the result for sustainability was far higher at 38%.

Millions of consumers looking to switch brands

Another key takeout is that brand loyalty has plummeted in the current climate. 60% of people would switch brands for essential items and 48% of people revealed they are more likely to switch non-essential considered purchase brands.

This suggests the need for a tailored approach for brands to remain relevant in the current environment. Ephemeral qualities like brand values seem less important when people are rightly concerned about affording bills.

Quality and price consideration crucial

The focus in generating sales and retaining customer interest should be price and durability as the two key factors driving buying decisions. People still need big ticket items but necessity trumps desire in the current environment.

However, it is important for brands to have expertly crafted messages for different audiences.  with sustainability still crucial, in particular for younger audiences. Having the right tone and audience-centric approach will help brands and retailers remain relevant and necessary during the next few months.The results reveal the cost of living crisis has had a dramatic impact on consumer spending at all levels. It highlights that there is a real need to focus on value and  longevity to win customer loyalty with the need to craft audience-specific messages like never before. If retailers and brands keep this in mind, without the need to apply offers, they can still thrive amongst the turbulence and uncertainty. 

To read the full article by Dan Todaro, Managing Director please visit Retail Sector

Photo by Rachel Hannah Photo on Unsplash

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5 Retail Trends Impacting Customer Behaviour

We live in extraordinary times. While conventional wisdom pointed to a significant economic recovery after the challenges of the pandemic, a different picture has emerged as we look to the Autumn. The cost of living crisis is impacting everyone and has dramatically impacted the willingness of consumers to engage in discretionary spending.

Recent events have proved that markets can shift in an instant, and reacting to these effectively can be the difference between keeping or losing customer loyalty. It means working harder than ever to understand the trends that are impacting behavior. But after the horrors of lockdown, retailers with the right smart strategies can emerge from this bumpy road back to a more normal trading environment.

It is key to utilise opportunities across store and ecommerce to ensure your offering is ahead of the game as we look forward to the golden quarter. So what are we seeing that is worth consideration? I think there are five key trends impacting behaviour in the second half of the year.

1. The Inflation Era Shows No Sign Of Abating

We are living in an era with the highest level of inflation since the 1970s. This has been driven by pent-up consumer demand after the pandemic and the Russian invasion of Ukraine. According to the most recent BRC-NielsenIQ Shop Price Index data, shop prices hit their highest point of inflation since 2008 as the balancing act between supply chain costs and a cost conscious consumer continues. For July, Shop price inflation soared by 4.4%, up from 3.1% in June,

Consumer concerns regarding the cost of living cannot go ignored by retailers and brands. Intelligent pricing strategies are a  key priority, as well as ensuring your customer journey is quality enough to capture a consumer willing to shop around.

2. Customers Being More Canny With Considered Purchases

In this inflationary world consumers are needing to think very hard about big ticket items. Particularly when looking ahead to further energy price rises in the Autumn. This is having a noticeable impact on existing sales. There was a 4% MoM decline in global smartphone shipments according to the latest Counterpoint research market review. This represents the second consecutive month of MoM decline, along with being the 11th consecutive result showing YoY sales decline.

Despite many ongoing success stories, the overall market has yet to reach pre-pandemic levels. While component shortages have been partially sorted; inflation, a slowdown in China, and the war in Ukraine have all affected recent demand.

With smartphone upgrades being a discretionary purchase it is incumbent that retailers focus on the value of any big ticket items. For appliance manufacturers emphasising the ability to help save energy and costs can be key. With running costs becoming of more interest, consumers will be looking at eco-credentials for new appliances, as well as potentially opting for better quality units that will stand the test of time.                                                     

3. Personalisation and Experience Key to Driving Return Visits

There is also an expectation of quality customer service and personalisation. Something that will please consumers and drive up the chances of a return visit, whether that is online or physical store. Research commissioned by Gekko last year found that the top factors driving sales were experience related. This includes the ‘ability to see and touch a product’, and expert, tailored advice.

Empowering the consumer through increased personalisation is vital, particularly as 80% say they would only shop with a business that embraces it. It is the ability to differentiate in today’s environment that will mark out success from failure.

People now have an elevated expectation of their shopping experience, looking for curated, one-to-one engagements at various stages of their journey. Such interactions breed brand loyalty and recognition, meaning you can count on people coming back for more if they enjoy their time with you. Recent research by MoEngage found that only 25% of retailers currently personalise their communications with their customers, so there is a real opportunity to get ahead of the curve.

4. Embracing Omnichannel and New Tech

2022 has seen a return to steady growth for ecommerce in conjunction with the full return of bricks and mortar footfall. With both channels set to grow sales this year after the end of lockdowns, it becomes more important than ever to ensure your omnichannel presence is informative and engaging.

The proportion of retail sales online was 26.6% in May 2022 and remains substantially higher than the 19.7% in February 2020 before the coronavirus pandemic. Research we commissioned last year also showed 80% of consumers would now research online before buying an item instore. It is crucial to ensure you have a seamless and joined up journey across your various touchpoints.

5. Sustainability and Ethics

This continues to be a top consideration for consumers when it comes to choosing both how they shop and who with.

According to Deloitte’s latest Sustainable Consumer research, environmental awareness amongst UK consumers has rocketed in the past year with 85% now making more sustainable lifestyle choices. The findings revealed a strong desire to adopt more circular practices, such as buying products in sustainable packaging.

Credentials need to be backed up and also authentic, an increasingly savvy market will disengage otherwise.

So the road ahead may be bumpy but with the right map retailers and brands can navigate through the difficulties. Understanding the consumers’ specific needs is key to ensure retailers can be back in the driving seat for the second half of the year.

To read the full article by Rupert Cook – Marketing Director Gekko Group, please visit Talk Retail

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How physical stores can ensure they are refit for the future

The events of the past couple of years have accelerated the pace of change in the retail industry. Retailers have simultaneously had to react quickly to events out of their control, while also embracing the ongoing trends that were clear even before the pandemic hit.

The role of the physical store has been one of the biggest topics in the spotlight. The absence of stores during lockdowns created two slightly paradoxical trends. Firstly their importance was maintained and even strengthened in certain ways. 

With the growth of ecommerce during the lockdown era, some feared that the writing was on the wall for traditional bricks and mortar retail. These concerns, however, were short lived as shops re-opened their doors and visitors flocked back. 

Yet at the same time, the need for change in the industry was also apparent. Ecommerce was embraced by everyone, even the most hardened luddites, meaning physical retail needed to redefine its purpose. 

According to ONS figures, online share of retail has consistently fallen since its peak back in February 2021. Still far higher than the pre-pandemic level of 19.9%, but with the balance restored somewhat by the opening of the high street. So the demand remains strong yet evolution is required to keep up with the pace of this new retail world environment.

The return to prominence has been so strong that the idea of growing a bricks and mortar presence has become a priority for both existing and new entrants to the market. Many previously online only retailers are developing ambitious plans to expand their portfolios. Amazon itself is reportedly planning on rolling out 260 Amazon Fresh stores across the UK over the next few years in a challenge to the existing grocery hegemony and an effort to make a physical imprint in the market.

So with more stores on the agenda for many, and occupancy rates back on the up as footfall gradually rises once more, how do they need to adapt to succeed in this current retail landscape?

Play to their strengths

Consumers have grown more used to utilising both online and offline channels when shopping. Our own research found that 85% of people now research online before heading to a store to purchase. As a result, they are looking for a shopping journey combining the ease of online browsing, with the added ability of being able to try things for themselves and ask for real advice when needed.

Retailers need to ensure they have the most in demand products on display, with all the relevant information at hand, so customers can enjoy getting to know their potential product with ease. Better yet, have knowledgeable brand advisors on hand to answer any questions and demonstrate useful features.

This part of the store experience should be built upon by retailers and the brands they stock as part of wider omnichannel improvements. Invest in improving these elements for the customer in order to create a positive shopping journey, playing to the true strengths of the store. This includes ensuring they truly understand what makes your retail space both an efficient and enjoyable place to be. 

Incorporate your online channels

Store expansion does not mean you can forget about the online channel, in fact customers are now expecting their interactions between the two to be seamless.

Consumers should be able to look on your website or app and see product availability in the store they are heading to. Offering an immediate connection to the store keeps the customer on side and more likely to remain loyal in their hunt for an item.

Physical retail can also now play a huge role in online order fulfilment by being a base for deliveries and click and collect orders. Complement this with accessible pick up points so that online customers are satisfied with their entire omnichannel shop, while also helpfully adding to your footfall figures.

Embrace technology

We have already touched on how technology might help create a better shopping experience, but there remain many opportunities to embrace it in physical retail.

For example, utilise your app to connect users to their store experiences through better personalisation, stock locations, or further product information.

One brand who are great advocates of this approach is H&M, which has started to roll out tech-enhanced shopping experiences in its COS stores. With seamless payments, personalised recommendations, and even a smart mirror that allows customers to request further items without leaving the changing room.

Offering these convenient elements will help the customer feel empowered, valued, and much more likely to make a repeat visit, while also giving you insightful data. Be forthcoming with the information that matters to them, otherwise shoppers will disengage and look elsewhere for it.

Think differently

Stores have the ability to excite and energise in real life better than any other channel, which is why we are seeing collaborations, new events, and online retailers joining in the physical experience.

Online star Bloom and Wild has been opening up a series of pop-up shops around the UK, utilising a bricks and mortar presence to give customers a real view of the plants on offer, with experts on hand to guide and advise. In terms of real engagement, the value of physically promoting your brand in a busy retail area cannot be underestimated.

The idea of the store ‘as an experience’ has grown to such an extent that it expands beyond just individual stores and into entire areas. The new Battersea power station shopping district will be just one example of the new type of retail district. A hybrid of Apple offices, event spaces, shops and hospitality. The combination of which looks to be the key to a bright outlook on high streets and shopping centres. 

The physical store has an exciting future and the possibilities are near endless for those that embrace change. Creating a multidimensional space that compliments rising ecommerce, along with shining in its own right, will create a space customers will yearn to return to. 

To read the full article by Tom Hardwood, Data and Insight manager please visit Branding Magazine

Photo by Clay Banks on Unsplash

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Building Brand Loyalty in the Modern Age – A New Route to Success

The concept of building brand loyalty used to be relatively straightforward. Effective marketing and delivery of a positive customer experience would create a positive association for a brand. The lifetime value of that relationship could then be hugely profitable, with consumers unlikely to switch.

However, we now live in a world of choice and information overload. An increasingly digital landscape, dominated by tech giants who hold many of the cards. In this new world, run by algorithms and AI, traditional long-held attachments are being unwound. As we culturally shift in shopping habits, people are more likely to remember what they bought from Instagram or Amazon but not the actual name of the brand. Does this mean brand loyalty is dead or at the very least waning?

Brand communication – from top-down to influencer-led

In the old world, brand marketers would use above-the-line platforms to create a strong identity and desire for a product. The brand direction was determined in a very top-down fashion, often based on the instinct of the CMO. A ‘needs’ state was identified and answered and an advertising campaign was launched highlighting the brand’s unique qualities.

In today’s world, we have shifted to digital and younger generations will see campaigns on Tik Tok and Instagram where the product is being advocated by a brand ambassador or a paid-for ad placed on social. In this new era, the control of the brand’s identity has been repackaged, personalized, and filtered through the lens of influencers. Having never heard of the brand, the influencer’s recommendation can be enough to create a consumer of a brand.

In fact, large segments of audiences will have never even seen an advert on TV or in a newspaper because they don’t touch a newspaper or they don’t switch on a TV. Or the brand has not included it as part of its media planning. According to recent research by Nielson, only 10% of Gen Z rank watching TV as their most popular entertainment activity. In fact, across the 18-34 bracket, live TV viewership dropped by 23% year on year.

The changing nature of brand loyalty

So, this digitally dominant world has created an entirely different mindset when it comes to brand loyalty. For socially digital natives, brand loyalty is about what it offers to them in value. A brand like Paul Smith will have a huge amount of brand equity among Gen X or baby boomers for its quality, tailoring, or painstakingly built partnerships and marketing campaigns. However, this will mean nothing for younger generations living in the moment and wanting to know what a brand can deliver here and now.

For younger consumers, if it is a relevant brand, it will be popular for them. If it’s not, they are just not interested. Quality has given way to relevance or price consciousness. Indeed there has been a huge rise in interest among younger audiences in mobile phone brands that offer a lot of the same features as iPhones but for a fraction of the price, like Xiaomi built with an Android skin. The tease here is the freedom an Android device offers a user who doesn’t want to be part of or associated with ‘that crowd’.

For digital natives, there is a checklist of what is really important for them when they spend their money. In recent research, price promotion was rated as crucial for this audience, but ethics are also vital. How long is a product going to last and what are they going to use it for? Does it meet my needs and values?

The life cycle of brands

In this new age, the life cycle of brands is also shorter, almost sonic. Brands can spring up quickly to consciousness but equally, their success can be shorter-lived. This has been evidenced by the spate of high-street retail brands that have disappeared.

Glossier is a D2C brand that sprung up in relatively short order. They have quickly scaled up the ladder of investment based on perceived digital growth that would continue endlessly. The direct-to-consumer beauty brand has raised an astonishing $80 million in Series E funding and reversed the traditional model.

They have latterly embraced physical retail with a pop-up store in Covent Garden, London,  and the swift ascent to being a much-loved brand is highlighted by the queues of people outside. However, they recently had to lay off staff as the growth they have experienced has not been maintained. Could the bubble burst as quickly as it was created?

How do brands build loyalty today?

It is certainly difficult for brands to build loyalty in the modern world because they are having to think about a very different culturally younger generation and manage a more traditionally minded older audience.

To square up this circle, value and values are two unifying themes that can be focused on, although realized in different ways. As consumers, we are all more interested in the purpose of brands and this is a clear differentiator. Brands today, particularly consumer goods products, have to think not only about how they make a product but also how they produce it. According to a study by Cone/Porter Novelli, 77% of consumers say they have stronger emotional bonds to purpose-driven companies.

Also, what added value are brands able to offer beyond the immediate product or service? How are they innovating to remain relevant? An excellent example of this is the Google Pixel 6 device, which enables users to remove photobombers and unwanted objects so that they “disappear like magic” using a “magic eraser”. Also, Portraits on Pixel represent the nuances of different skin tones for all people beautifully and authentically, to take true, accurate portraits. It’s innovations like these that create an immediate way for brands to build loyalty in the modern era.

Canny partnerships unite different audiences

Additionally, partnerships can be a great way of uniting seemingly disparate groups around common themes. CK1 Palace was a great example of this. A new collaboration between Calvin Klein and Palace Skateboards was launched with a tongue-in-cheek film celebrating cities that came to define these two labels. For streetwear brand Palace, it was London and its lively skate scene, with grainy film textures creating some retro-cool. 

Also included are high-contrast, black-and-white style studio shots, synonymous with Calvin Klein. The combination of nostalgia and modern relevance was a canny move that other brands would do well to replicate. Calvin Klein has opened new stores and you will see members of Gen Z proudly walking around Carnaby Street in London with a Calvin Klein shopping bag. This shows an effective strategy by a heritage brand to remain relevant and build loyalty with different audiences.

Towards a new approach

Creating brand loyalty today is far more difficult in a digital, social media-dominated world of increasing fickleness. Heritage brands are in trouble with a younger generation who has no interest in timeless qualities built up over many years. But brands can succeed if they adopt a new playbook. This needs to focus on the values and value of their product and on leveraging partnerships to remain relevant.

According to author Maurice Franks, “Loyalty cannot be blueprinted. It cannot be produced on an assembly line. In fact, it cannot be manufactured at all, for its origin is the human heart.”

To read the full article by Daniel Todaro – Managing Director Gekko Group, please visit Branding Magazine

Photo by Keagan Henman on Unsplash

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