The reaction to Covid-19 drastically changed consumer behavior and, as a result, forced many businesses to review their current models. In the simplest of terms, the pandemic forced brands to become innovators and consumers to be early adopters.
From embracing online shopping to actually reevaluating priorities and products used, consumers have demonstrated they can be flexible, but just as demanding, in the face of a global pandemic. On the brand side - the rate technology is evolving and the ambition of new ideas mean global organisations have the means to respond to the changes led by the consumer. The catch? It should happen in a space of a few months.
A typical product cycle, starting at development and market introduction and ending at the product’s decline, can take years. The two factors which make it that long are the research and technological development (RTD) phase and a brand’s ability to keep consumers engaged. Ideally, the latter should last as long as possible. The former, however, can have a negative impact if it’s dragging. What can marketers do?
Even if control over the RTD phase is limited, owning a product’s longevity after its release is absolutely in the hands of marketing teams. It all boils down to creating and, crucially, maintaining interest. It’s about consumer loyalty.
What happened to loyalty? The fundaments of caring
The health and economic pressures, changing priorities and fear of a long-term recession prompted consumers to be more explorative and critical about products they use. From financial factors and switching to private labels to environmental impact and the question of perceived value - consumers are more inquisitive, informed and aware. Convenience and product availability have also affected loyalty, particularly at the beginning of the pandemic outbreak when the supply chain issues first emerged.
In light of these challenges, how can brands ensure their customer base remains loyal? We’ve asked our in-house experts to combine a list of the most impactful factors when it comes to loyalty. Based on their experience in specific sectors and recent projects led - here are the three pillars of loyalty every global brand should consider.
1. Purpose and transparency
"It’s very encouraging to see this unified front, a drive to hold businesses responsible but also celebrated for their choices when it comes to a positive change"
Stephanie Triau, Client Director, Beauty, Fashion & Luxury
We have reached a point where brands are fully accountable for what they stand for. Not only it’s an expectation but a demand for businesses to clearly define their values. This has been very impactful in the luxury industry, with consumers openly discussing brand purpose in relation to their favorite logos.
For a couple of years now we’ve seen that the interest in environmental topics is gradually increasing, particularly within the younger audiences. From sourcing, labour and manufacturing processes to materials and carbon footprint - consumers are watching, judging and making decisions whether to continue to support a brand. One of our studies on luxury fashion in 2019 discovered that Sustainability was the most prominent brand value discussed online. This result was relevant to audiences in the US, UK, France and China which demonstrates it’s a global movement rather than a local trend. On average, more than half (51%) of consumers under 35 focused on sustainability, with a very similar result (49%) for audiences over the age of 35. It’s incredible and very encouraging to see this unified front, a drive to hold businesses responsible but also celebrated for their choices when it comes to a positive change.
Of course, the various events of 2020, particularly Covid-19 and the expansion of the BLM movement, have had an impact on the hierarchy of consumer beliefs. Race-related conversations are amongst most discussed today and the difference with the landscape just a year ago is enormous. We’ve seen the share of voice of race-related posts rise from 16% between October 2019 - January 2020 to 51% in Q3 2020. No global business should ignore this fact, particularly if diversity and equality are part of its mission statement.
The events of 2020 have also impacted the environment and sustainability topics, with both continuing to be growing areas of concerns for consumers. The themes gained 2.6 pts of share of CSR conversations of average netizens if we compare February-May 2020 to June-September 2020 on the English scope (15,9% of conversations in June-September 2020 vs 13,35% in February-May 2020).
We noticed several key angles when exploring this rise:
- The taste for all things local, as people embrace a grassroots movement, reflected in hashtags such as #shoplocal, #shopsmall, #supportsmallbusiness, #shopsmallbusiness
- Concerns about change related to sustainability and environmental goals: #circulareconomy, #zerowaste, #recycle, #upcycle
- Environmental impact policies: #sdgs, #sustainabledevelopmentgoals, #impact, and specifically related to fashion: #sustainablefashion, #slowfashion, #consciousfashion, #fashionrevolution, #ethicalfashion
As the pandemic allowed everyone to reflect on what and where they buy, consumers growingly expect commitments and action.
Sourced by Radarly CSR Project
"Winning brands are reviewing their approaches, adapting to the entirely new circumstances and consumers facing new sets of challenges"
Matthias Jeanson, Client Director, Beverages & CPG
Whilst the concept of adaptability might not be entirely new to brands, the events of this year have proven how important it is to have the means (technology, data, knowledge) to remain flexible and agile. As consumption habits shifted at the start of the lockdown, businesses had to be creative in finding new ways of reaching consumers stranded at home. Many beverage brands responded quickly, not only through updated marketing and advertising but actually adapted business models. Online shopping and direct to consumer sales might have been concepts worth considering before 2020 but the pandemic outbreak meant many brands were forced to implement changes in the space of a few months. There’s no shortage of success stories within this department, with AB InBev celebrating their unprecedented annual growth of DTC revenue. Winning brands are reviewing their approaches, adapting to the entirely new circumstances and consumers facing new sets of challenges. This adoption extends through the entire product cycle, with innovation certainly being championed more than before.
Recently, we’ve seen a number of briefs focusing on detecting new trends when it comes to flavors and packaging - a clear sign global brands are seeking new ways to entice and attract consumers. Some of the projects we’re working on today have been “in the making” for some time but the financial gap generated by Covid-19 means businesses need reliable results and fast. This is where AI-enabled consumer insights come in! We work with a number of global brands who use social data to predict which ingredients or flavor combinations are likely to become mainstream and therefore worth the investment. Danone has been one of the champions of our trend prediction capabilities, leveraging the power of online content when it comes to innovation. The next big flavor is just the beginning of the journey however. The new product must be rolled out across the world and this requires an up to date, intimate knowledge of the target audience. A lot of our focus is on identifying cultural and regional differences between specific sets of customer groups, so that our clients make informed choices when it comes to esthetics of their packaging and authenticity of their message. Consumers are much more likely to support a brand which understands them and the world they live in - even if this world and, as a result their lifestyle, changes faster than ever before. Spotting moments that matter and at the time when it’s optimal to implement is of utmost importance today.
3. Exceptional customer experience
"Gaming in itself is a tool used to increase loyalty. It can be linked directly to what, for me, is a wholly grail of the quest to maintain a solid consumer base - exceptional experience"
Kinnary Canet, Client Director, Gaming
Video games have been around for decades, steadily growing over time. However, what we’re observing today is more of a revolution. The social aspect of gaming, virtual reality, even the types of devices and controllers used by players have all contributed to the rapid expansion of the industry. As the category itself continues to grow, so is its audience and that presents opportunities not only for gaming and entertainment brands themselves, but also organizations not directly related to the genre. Fashion labels realized the opportunity to drive revenue early on. The Louis Vuitton and the League of Legends partnership was the first big leap within the luxury sector - now seen as an iconic move to design an in-game apparel line. High-end fashion labels are not the only ones who hope to connect with consumers through games though. It’s encouraging to see that retail, sportswear or entertainment businesses have also entered the space and use aspects of gaming in their quest to improve experiences they offer. Epic Games, the publisher of Fortnite, is probably a key driver of this movement - evolving from offering popular gaming titles to becoming an entertainment branding machine.
These exciting developments show that gaming in itself should be a tool used to increase loyalty. It can be linked directly to what, for me, is a wholly grail of the quest to maintain a solid consumer base - exceptional experience. It’s not hard to find examples of companies who, through gamification, considerably improved the mechanics of how they interact with the consumer. Brands like Nike or Headspace have been leading the charge with mobile apps which cultivate human psychology and encourage consumers to be the best version of themselves. In fact, according to one of our recent studies on health, technology is one of the top five drivers of the mental and physical wellbeing conversation. Now is the time to leverage this insight!
The worldwide lockdown has been an accelerator for the gaming industry’s growth. As a number of outdoor activities and competitions remain postponed or cancelled, consumers seek thrills elsewhere. The scope of the “gaming audience” has grown significantly this year, providing an unprecedented opportunity for brands to develop exceptional experiences, including metaverse. This phenomenon has now moved outside of the purely gaming world, impacting other areas of life like entertainment or culture. The interactive aspect of gaming enables brands to offer their consumers that little bit extra which, in today’s reality, might well mean remaining relevant and top of mind.
The time is now
What those three pillars have in common is urgency. Loyalty is not a dead concept. However, as many other aspects of our lives, it has just gone through a major transformation. The positive takeaways for brands? Consumer appreciation of the right, targeted and authentic approach is very likely to act as a loyalty catalyst. A push for peers, community members and users currently unaware of a product to give it a go. The unique power of social data and intelligence can significantly impact the two areas we identified as the driving factors of a successful product cycle - RTD and mainstream adoption.