Retailers that fail to meet the omni-channel expectations of a growing and sophisticated digital consumer may be missing out on a major business opportunity.
The vast majority of people are now digital consumers, rational and adept at using technology to filter information and make purchasing decisions, according to an EY report, Consumers on board: how to co-pilot the multi-channel journey, featuring the results of a global survey of 30 000 consumers in 34 countries and in-depth interviews with business executives.
Companies must target “digital hypertaskers”, the shoppers of the future and the most sophisticated and challenging of digital shoppers, to create competitive advantage in the long term.
EY’s second international survey of the “new consumer” reveals how behaviour is evolving and the size and nature of the task that lies ahead if businesses are to prosper. Compared to the previous survey in 2012, with reference to the
South African consumers in particular:
* The only categories to remain stable in-store are purchases relating to cars, telephone and mobile contracts, and consumer loans;
* Buying online is becoming more commonplace. Household insurance and clothes have shown significant growth;
* Buying food & beverages as well as clothes online continue to lag global norms;
* While price remains the top criterion in the buying decision, it has lost ground to factors such as quality, and product warranty;
* Younger consumers, age 15 to 29, lead the way in product and service development. They are three times more likely to engage in co-creation activities, tapping into the insights of the consumers at the right points in the innovation process, than the 50+ age group. But some marketers risk ignoring this older, baby-boomer demographic, which is often labelled the richest generation;
* Price and quality are the factors that most influence the buying decision; however, rising brand loyalty across all markets underlines the appeal of brands that have invested in building trust and delivering an engaging customer experience.
Derek Engelbrecht, retail and consumer products sector leader at EY, says: “Our previous report two years ago painted a picture of consumers who wanted products and services to be designed, sold, delivered, serviced and purchased in a way that suits them. Today, they are even more knowledgeable and self-confident, doing more research before buying than ever before.
“Change on this scale demands attention. In the age of the smart consumer, it’s vital to realise that consumers consider themselves as ‘co-pilots’ when setting off with the intention of buying. We see evidence of active cooperation being offered in the development phase for new products in every category we looked at.”
Indian and Chinese internet users are leading the way in buying online, with a 75% and 70% digital share respectively, while South Africa come in at 64 % This figure falls to 63% and 50% in the UK and the US respectively, with purchasing in-store generally more prevalent in mature markets.
Compared with the findings from 2012, this latest research additionally shows that although consumers consider social media to be a good source of information, there is a rise in the number of people that see social media as a new way of communicating dissatisfaction (moved from 5.7 to 6.0 on a scale from 1 to 10 where 1 = disagree and 10 = completely agree) and also a rise in those considering social media to be a waste of time (increased from 4.9 to 5.4 on the same scale).
Hendrik Geyser, Advisory Customer leader adds: “Social media has provided consumers with a platform for their views and their creativity. It has changed attitudes and opened doors. Companies must address consumer concerns about the security of their personal data by prioritising cyber security and ensuring they monitor consumer sentiment on social media to prevent damaging comments from gaining traction.
“Regional differences in both consumer behaviour online and internet penetration also mean that best practices may vary from one market to another. Capturing and accurately interpreting data on local consumer preferences and behaviour using advanced analytics is therefore essential.
“Whatever the sector or region, businesses face stiff competition. Today, engineering an outstanding customer experience is as important as engineering great products. And in order to succeed, companies must build trust by meeting, or preferably surpassing, customer expectation.”