Empowered, digital-savvy, socially aware, and environmentally conscious ─ meet the new generation of consumers. They prefer convenience and comfort over conventions, shop from companies that put purpose over profit, sharing their opinions confidently, and crave to become a part of a larger brand story as co-creators. They consider themselves more than just consumers and believe in giving back to the planet. Behind such dynamic evolution of consumer behavior is a combination of tech and non-tech factors.
Easy internet access to more than 600 million people and the largest number of tech nerds (Gen Z and millennials), along with rising per capita income, renewed societal norms (after COVID-19), higher social awareness, and increasing health consciousness, are rapidly reshaping consumer preferences and expectations.
To win the loyalty of such empowered set of consumers and stay relevant in the market, the consumer industry must offer differentiated, elevated, and more engaging Consumer Experience (CX).
Simplify, immerse, accelerate, and revive are four key themes that capture changing customer expectations.
For brands to be able to curate and deliver on these expectations, the larger ask would be to understand the motivations behind these trends. Let’s look at what these mean individually by way of a few use cases.
Simplify: Characterised by the need for convenience and efficiency, with a touch of personalisation.
Hyper personalisation – A leading streaming service uses AI to curate and personalise each user’s homepage to their individual watch history and preference.
Hyper local retail – A growing number of online retailers are expanding to offer quick delivery of fresh fruits and produce. This is through marrying the trust associated with local “brick-and-mortar” stores with that of the convenience of online shopping and home deliveries.
Flexible payments – Using AI, computer vision, and data from multiple sensors, customers shopping at a physical store can walk out without the queueing for the bill, as they pay for the items that they pick up and place in their cart. In India too, a growing number of payments apps are offering a full suite of payment capabilities, specifically suited for a tech-forward and digitally literate user base.
One-touch engagements – Consumers look for simplified one-touch interactions (discovering products, initiating purchase, making payments, etc.) in an omni channel environment, thereby expediting the need for Indian organisations to shift from the existing multichannel ways of working.
Immerse: Designed around unique experiences, enabling discovery and imagination.
Metaverse – A luxury apparel brand created a virtual art installation for its Gen-Z customers on the Metaverse, allowing them to buy their apparel and trying them on their metaverse avatars. Customers will see multiple use cases emerge in the Metaverse in the near future—right from buying a high-end house to choosing a fancy dinner jacket.
Gamification – Using incentives linked to purchases, a leading coffeehouse chain encourages users to earn rewards on their orders and unlock levels with higher rewards. Consumer interactions are now being gamified beyond the transaction, and Brands are encouraging and incentivising customer advocacy through reviews, referrals, collaborations, etc.
Influencer marketing – Virtual influencers are increasingly becoming trusted agents amongst consumers. An online marketplace has been collaborating with influencers who have a niche following to grow awareness about the platform while increasing sales.
Accelerate: Imagined with cutting-edge tech to focus on consumer interest.
Crypto/blockchain – A leading multinational telecom company allows verified connected devices, vehicles, smart street furniture, and machines to transact securely without human intervention, but with complete owner control.
Phygital retail – An online beauty products and cosmetics retailer allows users to interact with influencers within the app while they share tutorials using products available in the store.
Interconnectivity – To further optimise guest experience, a leading hotel chain has created a hyper-connected, voice-controlled, and tech-integrated room with multiple IoT systems that allow devices to interact with each other.
Proactive and predictive service – Brands have started designing intuitive products requiring zero manual intervention to detect any malfunction. These products have a self-healing mechanism that informs service providers of any possible issue that can be addressed well in advance.
Revive: Centred around trust, authenticity, and a sense of belonging.
Sustainability – To cut back on return volumes and cull back the carbon footprint of the fashion industry, an apparel retailer has been providing users with a real-life trial experience online. Brands are increasingly including “recycling” as part of their customer journey. Businesses that embed sustainability and green initiatives as part of their core strategy will increasingly see greater relevance amongst consumers.
Customer trust and transparency – Given the growing awareness amongst users with respect to their privacy and data, a leading news daily provides complete and transparent information on where data preferences can be accessed, and the benefits associated with users sharing their data.
Community engagement – With more consumers turning towards online communities, a growing number of organisations are capitalising the power of community in building brand image, troubleshooting, customer service interactions, and co-innovating. This also includes influencers and artists who are monetizing their content using non-fungible token (NFTs). Another example is the surge in digital co-working spaces that allow users to cultivate focus, while maintaining a sense of community.
Winning formula for the consumer industry
Rapidly changing consumer expectations have sparked a new battle within the consumer industry. Big or legacy brands, great brand histories and image, and tried and tested traditional marketing models are no longer enough to keep pace with the demands of empowered modern consumers. Companies must refresh and align their strategies and operating models to offer improved CX to attract, engage, and retain customers. They need to be one-step ahead of customers and delight them by predicting their future needs and offering just the “right product or service” to them. For this, they must decipher the best combination of mind (intuition) and machine (technology and data) to create an ideal and impressive CX and secure a space in the heart of consumers.
Authors – Deepti Sagar, Partner, Deloitte India & Karishma Gupta, Partner, Deloitte India