The UK is tentatively open for business. But is it business as usual? As retail, hospitality, and food and beverage brands ready themselves for the final quarter of 2021, many are asking: What’s next? What do consumers expect now? What’s changed forever? And what do I need to plan for?
These are just some of the questions tackled inRetail reawakened, a new podcast exploring the most pressing UK consumer trends via the diverse perspectives of brands, consumers, and industry experts. We hear from Burberry, Fortnum & Mason, Joe & The Juice and LEON as well as the BBC’s Retail Champion, a consumer psychologist, and councilor for Stockton-on-Tees (head straight toEpisode 4to hear how they’re bulldozing the town’s shopping centre to make room for a park).
Learn more about the serieshereor head straight toSpotify,Apple,Google, or wherever you get your podcasts, and have a listen. In the meantime (or if you’re more of a reader), below are three takeaways.
The three consumer trends you can’t ignore
Digital channels will likely play at least some part of your customer’s journey, so make sure they’re connected and the experience is cohesive.
Loyalty programs are getting a digital make-over. Goodbye loyalty cards, hello payment-linked loyalty.
The pandemic has made social warriors of us all. Consumers care and they’ll reward brands that can demonstrate they’re making a genuine and positive impact.
"Ecommerce is an essential and integral part of what retailers do.”
1. Digital is discovery
Online shopping is here to stay. According to our latest research, 34% of UK consumers will shop more online now than they did before the pandemic. And, even if the purchase eventually happens in store, it’s likely that digital will play some role in the buyer journey.
The days of ecommerce as an afterthought, or (worse) seen as competition to brick and mortar retail are over. As the BBC’s Claire Bailey tells us inEpisode 1: “Ecommerce isn't the most significant driver of retail success or failure. It is an essential and integral part of what retailers do.”
Craig Crawford, a driving force behind Burberry’s digital transformation, agrees: “Brands today will say things to me like: ‘My website is only generating 6% of my revenue, so we're only giving it 6% of our advertising and creative budget.’ and I say: ‘Are you kidding me?! How do you think they get into your store? How do you think they'd become aware of your store? Digital is discovery.’ You know, 80% of us, or some crazy number, won't go into a store if we haven't been online first.”
“You can't have a separate strategy for stores than you have for online."
But of course, today, it’s not just enough to have a beautiful store and a beautiful site. The two have to be connected, as Jon Weg from Fortnum & Mason explains inEpisode 2: “You can't have a separate strategy for stores than you have for online. Customers demand a unified experience and the brands that are already on the journey are the ones that are ahead.”
Your website is your shop window, a gateway to your customer relationship management, a source of new shoppers, and a loyalty driver for old ones. When used in conjunction with your other channels, it can contribute significantly to your bottom line. Data from the Adyen payments platform reveals that multichannel shoppers are worth 40% more to you.
2. Loyalty is ubiquitous
InEpisode 3we ask people in the street how they feel about loyalty programs. One person says: “You don't often know what you actually get with the loyalty program. I have a few and sometimes I'm just like: What is this card even for? They don't really tell you. You just sort of get signed up for one at the checkout.” Another complains they never have the right card in their wallet when they need it.
This is pretty familiar to most people and a big problem for a lot of brands, as David Wynne, CEO of digital transformation experts, Red Badger explains: “I think you get experiences that feel a bit broken. You still have to pull out a card and scan a barcode to get your loyalty points, your free cup of coffee, or whatever.”
These disjointed journeys are no longer acceptable to consumers, especially when it’s possible to create a more elegant experience with payment-linked loyalty. Head of Retail and Hospitality Solutions at Adyen, Jan-Pieter Lips explains: “First, customers are asked to identify themselves with a loyalty card, an email address, or QR code. But straight after that, they’re asked to make a payment, which is also an act of identification. So they’re being asked to identify themselves twice. Payment-linked loyalty combines those things by ensuring the loyalty ID is linked to the payment credentials.”
"Having payment embedded in the app means loyal customers simply need to press ‘reorder’ and the transaction goes through. It's basically the most frictionless experience you can have.”
Your customers will thank you. Our research found that 63% of consumers want you to link loyalty rewards to their payment card. It not only makes it easier for them; it also gives you access to data, which you can use to personalise the experience. Joe & The Juice uses the Joe app as its loyalty program, which is also linked to customers' payment methods. Senior Vice President of Strategy of Business Development at Joe & The Juice, Thomas Evald tell us more in Episode 2:
“From the moment you download the app, the communication evolves. From one visit to two, three, four, five, all the way up to our biggest tiers, we’ve customised the journey to make it human and personal. And having payment embedded in the app means loyal customers simply need to press ‘reorder’ and the transaction goes through. It's basically the most frictionless experience you can have.”
As customers increasingly move from channel to channel, it’s important your loyalty program can follow. Payment-linked loyalty is not only channel agnostic, it will improve engagement, help clear out your customers’ wallets, and increase satisfaction.
3. Consumers care
One of the silver linings of the pandemic is its acceleration of the rise of the kindness economy or conscious consumerism. InEpisode 5, consumer psychologist Kate Nightingale tells us: “When you’re faced with an existential threat, you ask yourself: what legacy will I leave behind? And you're going to demand it of others too - including brands.”
Our research data backs this up. 51% of UK consumers say they will go out of their way to shop with responsible businesses that demonstrated a social conscience during the pandemic. And 62% said that a brand’s ethics is more important now as a direct result of the pandemic.
"Brands create our societies and humanity. So the responsibility is enormous. But the opportunity is even greater.”
It seems the past 18 months have made social warriors of us all. So how have brands responded? Healthy fast food chain LEON has been leading the sustainability charge for almost 20 years. Its ethos is simple, as Digital Executive, Hugo Engel, explains: “Our customers are the best people to advocate for change and hold us accountable. But we also want to encourage them to do the same too. For example, we want to encourage people to eat more plants so we put vegetables front and centre in our dishes.”
LEON also wants to encourage them to donate to its partner charity Bags of Taste, which works with people in food poverty to improve their diets and finances. To do so, it’s making use of our charity donation solutionAdyen Giving.
“I came across Adyen Giving as a way to use the in-restaurant kiosks as a vehicle to do more good in our communities,” Hugo says. “You pay for your order and then a little message will appear on the payment terminal saying: ‘Would you like to donate to Bags of Taste?’ You can then choose how much you want to donate and simply tap your card to make the donation. That money then goes directly to Bags of Taste. What we really liked about Adyen Giving, is that Adyen absorbs the cost.”
Contributing to good causes and trying to make a positive impact on the world aren't just a way to make brands look good. Customers want businesses to act responsibly because they’re the vehicles through which they themselves can do good. Brands are no longer just somewhere to shop, they're instruments for change. As Kate Nightingale concludes:
“I have absolutely a firm belief that brands create our societies and humanity. We are constantly exposed to brand communications and it shapes how we view the world and our identities. So the responsibility that brands have is absolutely enormous. But the opportunity that stems from that responsibility is even greater.”
From digital discovery to ubiquitous loyalty programs, and driving positive change, there’s a lot for brands to think about. But each of these challenges comes with the opportunity to differentiate yourself and build lasting relationships with your customers.
Retail reawakenedis available onSpotify,Apple,Google, or wherever you get your podcasts. The series was underpinned by the findings from our latest research report which you can download below.
Retail report: New beginnings
Explore our consumer research and discover more trends for retail and hospitality businesses.