According to a Capegemini report, 70% of consumers buying products on social media said they trust influencers.
The report also says Gen Z shows the highest engagement here, with almost half (48%) discovering new products through online influencers and 32% continuing to purchase the same ones.
Additionally, 61% of consumers worldwide are now concerned about their financial situation, with Millennials (66%) and Gen Xers (64%) being the most worried, and Baby Boomers (55%) the least.
The report says that to navigate these pressures, nearly half (44%) of consumers say they are reducing their overall spending; an increase from 33% of respondents who said the same in November 2020.
Capgemini Research Institute has released the second edition of its annual consumer trends report, “What Matters to Today’s Consumer”, which reveals the impact of an increase in the cost of living on consumers’ consumption habits and preferences. .
The report says that while retail organizations continue to face disruption, there is a need to transform operations to meet changing consumer expectations for affordable products and pass cost benefits on to customers.
Some of the highlights of the report are:
Nearly three-quarters of consumers cut back on non-essential purchases during tough times.
Based on its survey of 11,300 consumers in 11 countries, the report found that nearly three-quarters (73%) of consumers are making fewer impulse purchases, while 69% are reducing non-essential spending such as electronics. , toys and restaurants. , as well as delaying the purchase of luxury items. Saving money is a priority for many people, with 64% of consumers buying products from hypermarkets and discount stores and 65% buying cheaper private label or discount brands.
“There is an opportunity for retailers to radically rethink their operational strategy in order to weather this storm and pass the price benefits on to consumers. By identifying new sources of revenue, creating new markets, transforming operations and optimizing costs, businesses can succeed without compromising sustainability or the overall customer experience,” said Lindsey Mazza, Global Retail Lead, Capgemini Group. “Harnessing technology for intelligent demand planning, inventory management and automated operations can not only help reduce costs and maintain margins, but also bring sustainability benefits to organizations. “
Consumers will not pay more for sustainable products.
Sustainability continues to be an important factor when deciding which retailer or brands to shop with, but only 41% of consumers globally say they are willing to pay more for a product than they consider sustainable.
This is a marked decrease from the report’s findings in 2020, when 57% of consumers said they paid higher than average prices for products they perceive to be sustainable.
The report highlights that brands and retailers need to re-evaluate their pricing strategies to provide affordable yet sustainable options to consumers and deliver loyalty programs that help customers through the current crisis while building long-term customer loyalty.
Retailers need to rethink their operational strategy around cost reduction, sustainability and experience.
Businesses are also grappling with challenges such as rising energy, labor and transportation costs, but according to the report, 67% of consumers say brands and retailers should offer lower prices for the products their families need.
The report highlights that retailers and consumer products companies will need to transform their operational strategy to achieve cost reductions in a way that also meets consumer expectations for sustainability and convenience. Transforming the way organizations use the workforce, adopting a technology-driven supply chain, and automating warehouse operations can also go a long way toward improving last-mile delivery while reducing costs.
Opportunities to unlock new channel growth with custom social media strategies.
The report also suggests that by leveraging the power of social media influencers and expanding into new channels to reach customers, brands can unlock new revenue streams and growth opportunities.
According to the study, 70% of consumers purchasing products on social media said they trust influencers when using the product and sharing their own experiences and reviews. For example, Gen Z shows the highest engagement here, with nearly half (48%) discovering new products through online influencers and 32% making the purchase.
The full report is available by clicking here.