The future shopper is now

Profiles of three different consumers that are shaping the shopping landscape (and how retailers are meeting their needs).

Unboxed-market

This story originally appeared in the May 2019 issue of strategy.

It’s no secret: consumer expectations are at an all-time high. They’re reshaping the landscape at reckoning speeds. But – as WGSN highlights in its latest shopper forecast report – many brands are learning to not only survive, but thrive.

The Impactful Shopper: Big brands get into the sustainability game in a big way

If Tom Szaky’s vision comes to fruition, the world could one day be full of milkmen.

Not the kind that sport white uniforms and deposit glass bottles at your door before sunrise. No, they will arrive bearing a range of common household goods from some of the largest CPG companies in the world: Procter & Gamble’s Tide detergent or Nestlé’s Häagen-Dazs ice cream. Their goods will come in premium containers made to last (for a small deposit paid upfront), so that, once empty, they can be returned to the facility from whence they came – eventually finding their way back into the system and in front of someone else’s door.

Szaky, CEO of New Jersey-based TerraCycle, may have not set out to create a modern “milkman model” when his company launched Loop in January – but that’s essentially how it will bridge the gap between the inherent disposability of CPG and consumers’ growing environmental consciousness.

Today’s shopper is more likely to think about the environmental impact of their purchases before they get in line, according to trend forecasting company WGSN.

LOOP_P&G-PANTENEFor years, sustainability has butted heads with price and convenience, says retail expert Carl Boutet. And Katherine White, a marketing professor of consumer insights and sustainability at the University of British Columbia, agrees. She says researchers have identified an “attitude-behaviour gap” – a tendency for consumers who long for sustainable options to bow out when it comes to putting money on the table. Their reasons are complex: saving the planet remains an abstract and futuristic ambition. Meanwhile, switching to sustainable options can come with short-term personal costs, she says. Add to that the fact that eco-friendly products are often perceived as being inherently less convenient, effective and attractive.

But that’s changing, according to WGSN. The proof is in the size of the companies getting on board. Loop, for example, has attracted the interest of a growing coalition of behemoths: PepsiCo, Unilever, Mars, The Body Shop, Mondelez and Danone, to name a few. The program is being rolled out to consumers in New York and Paris in May, with a planned expansion to London, Toronto, Tokyo and San Francisco by 2020.

It comes after some retailers, such as the Unboxed Market in Toronto, have adopted the Bulk Barn model (which allows Canadians to bring their own reusable containers to the bulk shop) in an effort to help shoppers reduce waste.

NNNI Mango ChunksLoblaw’s “ugly” produce meets eco-shopper demands, too. Since 2015, it’s sold produce that’s smaller in size or slightly misshapen – in other words “Naturally Imperfect” – and which wouldn’t have normally made it into stores, let alone shopping carts. The product line, under Loblaw’s No Name brand, costs 30% less than its “perfect” produce and the retailer has had enough positive response to expand the line. In 2017, it added frozen fruits and veggies, and the line now includes about 36 products.

The payoff for brands that go eco-friendly could be huge. A 2019 report by Accenture notes that Unilever’s sustainable brands (including Dove, Vaseline and Seventh Generation) have seen an average of 30% faster growth than their non-sustainable counterparts. Those brands also now account for 70% of its overall growth.

Meanwhile, brands that fail to act now are likely to face bigger pushback in a couple of years, Boutet says. “It’s just going to be too hard a pivot for them [later], so they have to start building [sustainability] into their equation now.”

The Anxious Shopper: Companies calm customers’ frayed nerves by minimizing in-person interactions

Muji-products2

Related to consumers’ newfound need for speed – and in some ways fueling it – is the social isolation emerging from an age obsessed with constant digital updates. Technology has led to an anxious mood state that businesses and brands have looked to alleviate. As a result, consumers, always within reach of their phones, are becoming more introverted and isolated.

This new segment has emerged out of last year’s “Invisible Individual,” the term coined by WGSN to describe those whose chief concerns were privacy and data. While these shoppers tended to opt out of email blasts and other forms of communication, WGSN’s Laura Saunter says the new segment are “people who want to shy away from interactions with retailers almost entirely.” According to Mintel research, 33% of U.S. respondents prefer to interact with people online than in person.

While the impacts of this trend are being felt across demographics, Gen Z is at the forefront. The younger demo prefers researching products independently and arriving in store already familiar with what’s on offer so that they can come and go with minimal interaction with sales staff. “They don’t want to queue; they don’t want to speak to people,” Saunter says.

WGSN’s Shopper Forecast report points to Soulfoot, a sneaker store in Germany, as a recent expression of a retailer leaning into this trend. The flagship shop features display units with screens that become transparent once a sneaker is scanned using RFID technology, revealing information about its selection of Reeboks, Asics and other brands.

Moreover, display tables double as points of sale, so that customers can scan, pay and leave having purchased their kicks in peace.

Similarly, Google ran hardware pop-up shops last year that gave customers the chance to touch and feel the products on display, while learning about them from self-led digital tutorials rather than sales staff.

“Customers could enjoy an unaided, try-before-you-buy product experience, without the pressure to purchase,” notes Saunter in WGSN’s report.

The Age of Anxiety has reared its head in other ways, too. Today, some retailers are designing products and retail spaces in ways that don’t overwhelm.

Japanese retailer Muji (whose name translates to “no-brand quality goods”) has gained prominence for its minimalist packaging of plain-and-simple household goods and apparel. It’s an aesthetic and brand credo that aligns with what others have called “calm design.”

Brandless-otherSan Francisco-based D2C startup Brandless, which launched in 2017, uses a white box as the key branding element for its food and home items. Its products are sold in packaging that’s wrapped in muted hues. The brand says it’s an approach based on stripping away typical brand clutter to focus on what matters most, such as vegan and sulfate-free ingredients. Its approach is not unlike that of M/F People, an American minimalist lifestyle brand, whose plain packaging and calm design reflect the emerging philosophy that, sometimes, minimal branding is the best branding.

Such minimalist approaches can also help anxious consumers overcome product and price fatigue. A 2019 trends report from digital agency Isobar states: “While seemingly counterintuitive to the idea of increasing brand engagement… mindfulness and social media detoxes [can] make brands appear more human, less self-serving, and establish an emotional connection with consumers.”

The Impatient Shopper: Retailers make strides in the race to give shoppers speedy options

Exterior_3-Nike

Today’s shoppers are time-starved and convenience-driven, says Laura Saunter, retail insights editor at WGSN and the author of its Shopper Forecast report. Modern shoppers want (and have come to expect) a frictionless shopping experience from the discovery phase through to purchase and delivery.

The ubiquity of connected tech has, in part, made immediacy the new gold standard: 64% of shoppers expect companies to respond to their concerns and questions in real-time, with Canadians using about nine different channels – from simple texts to hands-free voice AI – to do so, according to a 2018 Salesforce report. These shoppers, it seems, have simply forgotten what it means to wait.

With information at their fingertips, they expect brands to satisfy their needs and wants as they think of them. Naturally, they have flocked towards ultra-convenient, on-demand models for their purchases, where a one-day turnaround on orders has become the new norm.

Amazon_Go_in_Seattle,_December_2016In 1995, Amazon’s U.S. customers expected their deliveries within nine days, according to WGSN. Last year, shopper impatience drove that number down to only 24 hours. Kantar estimated that 45% of American households were willing to pay the USD$99 Amazon Prime fee (it’s since risen to $119 in the U.S.) in exchange for the benefits of free and unlimited two-day shipping.

Other brands have been striving to offer high-speed delivery offerings ever since. Last December, Loblaw joined the race when it launched PC Insiders, a paid membership program (currently CAD$9.99/month or $99/year) that offers free click-and-collect on groceries, as well as free shipping from Joe Fresh and Shoppers Drug Mart to its 16 million PC Optimum members.

The needs of the impatient shopper are driving similar changes in-store, as the use of smart checkout technology becomes widespread, Saunter says. Amazon broke new ground with its cashier-less Amazon Go concept stores last year, she notes.

Saunter uses Dirty Lemon, a DTC-born functional beverage brand from the U.S., as an example of a company that’s following suit with Amazon. Customers who visit the store can grab one of its beverages from the fridge and leave without ever swiping a device. Instead, they’re asked to text the details of their purchase to a customer rep, who then charges the order to their credit card. Initiatives like these eliminate transaction pain points and are ultimately about “trusting and also empowering the consumer,” she says. “It’s also giving them the level of service that they want.”

Nike_Speed_Shop_1Walmart launched Jetblack in the U.S. in 2018, a membership-only shopper concierge program that allows customers to place orders by text for USD$50 per month for a variety of brands, including Saks and Pottery Barn. And in February, American supermarket chain Kroger began rolling out Kroger Pay, an app enabling customers to pay at cash using a barcode connecting their loyalty card and payment information. The program is expected to go national later this year, and follows the grocer’s Scan, Bag and Go program launched in 2018. Through that program, Kroger customers use a wireless scanner (or their phones) to scan and bag items as they shop throughout the store. Once at check-out, all that’s left to do is for customers to pay using a mobile device.

Nike is also making strides to deliver on convenience. With the opening of its Speed Shop in NYC last November, the footwear giant showed just how serious it is about serving time-starved customers through connecting the in-store and digital shopping experience. Speed Shop is located in the basement of a six-level megastore. It comes with its own entrance so that busy customers can easily slip in and out by avoiding the shopping hordes on other levels. And through enhancements to the NikePlus app, customers can reserve products from home and later retrieve them from digital lockers in-store – making the Nike fitting experience as seamless as checking the mail.