Marketers confused about consumers’ priorities post-pandemic
Marketers are finding it harder to keep track of consumer expectations following the pandemic. The vast majority (91%) of marketers say they will need to evolve their brand and business model in order to keep pace with consumers’ new priorities.
Despite nearly all restrictions having been lifted in the UK, the aftermath of the pandemic is still affecting how marketers think. Most UK marketers (59%) are now finding it harder to predict consumer priorities.
More than one in four (28%) marketers believe they need to radically overhaul their business model within the next decade to survive.
Marketers believe convenience is the fastest-growing need of consumers, with value for money and environmental impact tied in second place. At the other end of the spectrum, with online shopping gaining traction over the past two years, having a physical store to visit now ranks as one of the least important needs of consumers.
Source: Chartered Institute of Marketing
Shop price inflation reaches highest level in over a decade
In April, shop price annual inflation rose to 2.7%, up from 2.1% in March. These rates of inflation are above the 12- and six-month average price increases of 0.4% and 1.5%, respectively.
This means shop price inflation is at its highest level since September 2011, more than 10 years ago.
Food prices increased by 13% in April compared to a month before. The rate of inflation here accelerated to 3.5% in April, up from 3.3% in March. This was even higher in categories like cereals and cooking oils, which are being particularly impacted by the war in Ukraine.
Non-food prices saw the highest level of inflation since records began in 2006. Inflation for non-food items rose to 2.2% in April, from 1.5% in March.
Helen Dickinson, chief executive of the British Retail Consortium (BRC) says this is unlikely to be the end of price increases.
“Retailers will continue to do all they can to keep prices down and deliver value for their customers by limiting price rises and expanding their value ranges, but this will put pressure on them to find cost-savings elsewhere,” she says. “Unfortunately, customers should brace themselves for further price rises and a bumpy road ahead.”
Source: British Retail Consortium-NielsenIQ
Most marketers expect to invest in retail media next year
More than three-quarters of marketers (78%) say they plan to invest more in retail media over the next year. This means placing ads within retailers’ category pages and search listings based on their first-party audiences.
Amazon still tops the list of “most desirable” retail media environments at 40%. However, competitors like Boots (30%), AO (26%) The Very Group (22%) and Asda (18%) are closing in.
Overall, marketers are looking to invest more in first-party data-led advertising approaches.
But despite this ambition, marketers spend on walled gardens is still rising, up 29% compared to last year. Plus the vast majority of agencies (91%) expect the cost of campaigns in walled gardens to continue to increase over the next 12 months.
Over the last year, media agencies saw a 27% rise in cost per conversion on the ‘big four’ technology platforms: Google, Apple, Amazon and Meta.
Brand loyalty called into question during cost of living crisis
Consumers are valuing saving money above sticking with their favourite brands during the cost of living crisis. Six in 10 people say that they would stop spending with their favourite brands if money was tight.
Most people think the cost of living crisis will have a substantial impact on their lives. Just 16% believe they can ride out of the cost of living crisis with minimal or no change to their everyday lives.
Consumers intend to, or already are, switching their shopping habits to save money. More than eight in 10 (85%) of consumers say they will be on the lookout for cheaper alternatives when shopping, a figure which rises to nine in 10 among lower income households.
As well as switching products, consumers are making cuts in order to stay afloat during the current crisis. Almost half (45%) are already reducing non-essential expenditure, with the biggest cuts seen in eating out, buying clothing, takeaways, beauty services and leisure.
Source: Mindshare UK
Bad log-in process affects how consumers feel about brands
The ease of the logging-in process for online stores can be a key factor in consumers’ purchasing decisions. A survey of more than 2,000 UK adults finds one in four (25%) will leave a website and purchase from a competitor if they can’t remember their password to access their account.
Meanwhile, most consumers (56%) say they will have negative feelings towards a brand or website if they have frustrations with its logging-in process.
A difficult logging-in process can mean brands lose their customers entirely. A third of UK adults (33%) admit they will stop using an online account altogether if they forget their password.