BLOG: In this forever changing world where technology is now at our finger tips, companies have had to be reactant to change and fast. Keep up to date on changing consumer spending habits and for top tips on market trends.
The Growth of private:
Brands call for more meaningful engagement.
Marketers are now focusing on more purposeful connections rather than just tailoring paid ad’s to everyone and anyone.
Brands must look at marketing to groups with the same interests to spark meaningful conversations. Consumers are happy to engage with brands online but are becoming much more selective as to which brands they interact with. In the social media world, it’s now content overload on every online platform. Now more than ever it is really important for brands to stand out from the crowd and engage with their target audiences.
The Growth of direct social selling.
In early 2018 Zuckerberg announced that Facebook has changed its algorithm this is to prioritise social media post’s that spark meaningful conversations and interactions. This has meant there has been an increase in the quality of what people see rather than too many random posts that are not specific to the user’s interests. This mean’s for Facebook’s users advertisements are more personalised.
Many consumers are becoming much more comfortable with social selling techniques hence there still being big investment from many companies on ad spend. With Instagram also adding ‘Instagram Shopping’ as a feature it further highlights the key growth in this area.
The Fake Influencer.
It's 2020 and influencers are not going to go away, in fact there are now so many out there! Brands are being much more cautious as to which Influencers they choose to work with, this is very much to do with influencers having fake followers which means it’s not always money well spent on product promotion. We are seeing brands work much more with Nano influencers. A Nano influencer is a person on a social media platform with a couple of thousand organic followers that can reach a specific market segment for example: A influencer may have a large following of users that are interested in sustainable clothing.
Video isn’t going away…
Long form and short form videos are the most shared content online. Although Instagram is popular for video as a platform, there is also a lot of influence on You Tube. We are now seeing more people flocking to this channel to learn about products, businesses and services. Let’s also not forget TikTok the most up and coming video channel, brands can’t really sleep on this anymore…
Always re-vamp your digital strategy
With algorithms constantly changing all the time on each social platform it is vital to keep up to date with changing marketing trends and align your digital marketing strategy accordingly. Voice recognition is now forecast to over-take SEO in the future. A tip to stay ahead of the curve would be to constantly adding value to your brand and how you are perceived. Brand > SEO.
Marketers are accountable for their performance data.
If social media takes a chunk out of a company’s budget, results and data are always going to have to be reported to the board. Monitoring conversations, growth and engagement and what social strategy is working will be key for successful digital strategic plan. Communicating these figures to the Finance Department also proves a marketers worth and adds value to the marketing department.
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How Costa Coffee became the UK's biggest coffee chain...
Costa is the UK'S market leader in coffee. Wherever you travel it's more than likely you will see a Costa Coffee store or come across a large costa branded burgundy Express Machine.
Costa holds the largest UK market share with 2,121 outlets in the UK closely followed by Starbucks with 989 coffee outlets. The coffee brand has recently been acquired by Coca Cola and is now diversifying its products to match the forever changing needs of UK consumers.
As a nation the UK has seen a dramatic change in purchasing trends. For a society that supposedly drinks tea, coffee now seems to be everyone’s favourite accessory. Even during the 2008 recession and onwards, coffee has surprisingly remained a luxury product as retail shops are closing, coffee shops are opening and diversifying.
Consumers tend to spend more time wanting a chat over a coffee in a relaxing environment rather than all day in a retail store. A coffee break is now not only a trend it's an experience and a place for people to meet with friends and wind down.
So how did Costa Coffee become so successful?
The previously Whitbread owned chain identified a key change in consumer buying and spending habits very early on during the 2008 recession. Younger consumers were starting to want more variety, ice drinks were becoming a trend and millennial's were buying into experiences more than ever before.
Costa pinpointed these changing habits and offered the UK market a relaxing atmosphere for a business meeting, a place where consumers could socialise after a shopping trip, a wide variety of customised products which had a sustainable focus along with stores situated in convenient UK hotspots.
A massive part of the success of Costa Coffee was down to their club card loyalty scheme, the loyalty programme had a prime focus on building emotional connections with customers. Due to increased competition in 2010-2012, challenger brands were also entering the market and on every street corner (PRET, Cafe Nero and Starbucks along with many other independent coffee chains). Costa chose to further differentiate itself by introducing a market leading loyalty scheme that helped to retain customers. Whitbread's clever CRM system analysed consumer buying patterns via the costa club card.
The savvy points card system analysed buying patterns by using the the 5 W’s (often used in problem solving in police investigations).
- Who bought the product?
- What did they buy?
- Where did they buy it?
- When did they buy?
- Why did they buy?
The CRM system utilises the above key information for each individual consumer and tailor’s personal emails to each singular person using this 5 W technique.
According to coffee critics in order for a loyalty scheme to be successful a brand must stay ahead of the curve and tailor their offering to each individual demographic and singular person. A good example of this is that the elder generation may be happy to swipe their loyalty card in store and the younger generation may be more inclined to use an App on their iphone, this is purely down to their habits and the generation that the consumer is part of.
Of course consumers will have two or three loyalty cards with every coffee shop offering the same incentive ‘The free coffee’ but a major part of the brands success comes from focusing solely on the customer experience and tailoring the offering on a personal level through email marketing tailored to each singular person. Still Costa remains the UK’S market leader and is further expanding by differentiating it's product range and increasing it's global reach.
In January 2020 it seemed like the UK was destined for a very successful year, employment was at it’s highest level, we had left the EU and gained control of our borders and many more consumers were spending more on eating out than ever before.
Then the global pandemic hit, no one predicted this except Bill Gates. The Founder of Microsoft anticipated that the UK was simply not prepared for an epidemic and foreseen that all the governments across the world had invested little in developing vaccines but had devoted excessive amounts of money towards nuclear.
As the coronavirus is hitting each country at a very fast pace and taking the lives of our loved ones, companies across the UK are forced to shut their doors, customer service teams have been sent home, field sales people told to cancel all face to face meetings and social distancing has been implemented across all supermarkets. This outbreak will have a major affect on how consumers spend money and ultimately change buying behaviours for the foreseeable.
Here’s just a few examples on how marketers predict things to go…
More shift towards online purchases.
The UK market has already been buying a lot more products online for some time now, many clothing retailers from the likes of Boohoo and Miss Guided are profiteering from many of us buying clothes online rather than your typical brick and mortar store.
Amazon the worlds biggest online retailer has had to hire 100,000 more workers to deal with the demand of online orders for home essentials. Typically, the Millennial generation were the ones who would be more inclined to order online and use an APP. You will now see even more of a shift towards online ordering from the Baby Boomers and Get X now people are having to become more interactive towards online buying processes (the easier the online buying process the more likely a consumer will buy the product).
Companies have been forced to send their employees home by the UK government, this is where technologies are becoming more critical than ever before. You will now see more of a shift towards video conferencing via Skype and Zoom. Gen X and Y will be trying out new technologies from the likes of YouTube video advances and TikTok. More of the population will become familiarised with finding new information via Apps and communicating via online web chats.
With more of us spending time at home, this is time that many of us have never had before. It's a time for people to reflect on what makes us happy, what are our passions? what is our life purpose? how can we take better care of ourselves and lead a healthier lifestyle?
Many will be using their time off work to set up a business, some will be reflecting on how less stressful their lives are without the daily commute and how they can better save money without dining out. Will we see a surge in demand for remote working?
We will become a nation that’s obsessed with cleaning and arranging.
This is where Instagram influencer Mrs Hinch will profiteer from a higher public interest on how to keep our houses clean and tidy. Hygiene is now at the top of our community’s minds, hand sanitizer is now the product of choice along with plastic gloves. As the gym became a trend many years ago and society became very focused on health and fitness products, critics are now predicting hygiene will be as important to us as fitness.
Along with being clean and tidy the prospect of being stuck in the house has lead to a surge in DIY sales, as house owners have seized the opportunity to make home improvements. The week of the 24thMarch 2020 Kingfisher which owns B&Q reported a 37.7% jump in sales.
The environmentally conscious consumer
People are now much more aware of how they act and ‘doing the right thing’. We are bound to see a shift in buying behaviours with consumers purchasing more environmentally friendly products. This is a trend that we have already seen grow over the past 5 years. As we all spend much more time with our friends and families we become more aware of ourselves, this can then lead to many of us purchasing more sustainably . Forbes magazine predicts that we will see more people spending on things that supports their core values and self esteem, this could even include luxury high priced items for self indulgence.
Summing this up, many corporate brands can profiteer from ‘learning from the new normal’ that’s if they pay attention. History provides evidence that brands can grow in distressing times. There are some great positive examples on how brands like Amazon, Netflix and Dominos expanded their horizons, by listening to consumers, innovation and transparency in communication and how they apply change management internally.
Brands that have done a U-TURN during the Coronavirus crisis...
Many big named brands like to be foreseen in a certain way by consumers and sustainability plays a big role in that.
Sustainability is not just about planting trees, its ultimately how you act as a brand or company, not just externally but internally too. Sustainability is how you treat your staff, doing the right thing by your customers and monitoring your carbon-footprint so much so that your organisation positively reduces green houses gases. Taking note of all this brands which have made noise about caring for customers and communities may have to dig deep to keep their promises that they have made to the outside world prior to this pandemic.
But the question is are brands living up to their purpose during the Coronavirus crisis?
- Waitrose/ John Lewis and Partners
Waitrose is a high priced food brand in the UK, known for quality and superior customer service. Consumers tend to pay the higher price tag for Waitrose food products because of brand perception. Typically, the supermarkets account for 60% of people’s food consumption, the other 40% is spent on customers eating out. The FMCG sector will profiteer during this crisis as the supermarkets are having to make up the extra 40% in consumer food demand.
But the senior board at Waitrose made this jaw dropping decision for ‘workers that are self isolating have to make up their hours in store upon recovery’.
Was this the right move from Senior Executives? For the underpaid key workers keeping the nation moving, isn’t it only right that they get their basic rights during these unprecedented times?
Would consumers continue to pay a high price tag for Waitrose food products following this move?
Tesco a direct competitor to Waitrose, offer food at a lower price and are giving their staff full sick pay should their employees contract Coronavirus. This move from Waitrose received so much bad press and even made coverage on the BBC news night along with articles being wrote from top reporters about how Waitrose are not doing their part and caring for their staff as they should do.
Due to all the negative press the board at Waitrose have now quickly reversed their decision. This is the part where Marketing Week have drawn attention to the fact that ‘Brands must dig deep during this crisis and have integrity'.
- Liverpool Football Club
Football Clubs are now also perceived as ‘brands’.
With the help of digitalisation, Football Clubs have been able to profiteer from the development of Apps, more advanced merchandise and enhanced football experiences from the likes of football boxes which always carry a hefty price tag.
Liverpool Football Club turns over millions of pounds each year yet made the decision to ‘furlough staff’ taking government money where it wasn’t really needed. A move like this is perceived by most as ‘greed’.
Big names from the likes of Jamie Carragher declaring that 'all respect and good will towards the club had been lost', The Mayor of Liverpool also voiced his disgust along with many MP’s and various other political figures. With rivals such as Manchester United advising staff to take NHS care rather than their Private Healthcare benefit to help the government free up beds for Covid 19, this puts Liverpool into the limelight on how exactly they are doing their bit. A move like this from Liverpool would follow them for years to come. Again because of the bad press, Liverpool’s Board were forced to apologize and reverse their decision… after all they are the seventh largest football club in the world.
- Lastly on a more positive note, Twitter…
Twitter has received some bad press over the years in regards to being a social media platform that has little control over online trolling and many critics always highlight that Twitter is simply not doing enough to stop online negative comments. For a brand that is often perceived negatively, Jack Dorsey CEO of Twitter has given £1 billion 24% of his wealth to help battle this global pandemic, this is by far one of the biggest single donations globally.
For a company and social platform that has been perceived in a negative way in the past this is sure a move that will follow Twitter in a very positive way in future.
Funding Covid Zero is the only way the world can move forward.
Sustainability trends in 2020 that we should be listening to…
As the world changes with the current crisis we as consumers are having adapt in many different ways. With sustainability being at the heart of most business strategies, it’s actually a key topic that’s been around for years and much more predominantly in the fashion industry. Fast fashion has a lot to answer for in terms of global warming and releasing pollutants into the atmosphere, as early as 2010 fashion leaders from the likes of Vivienne Westwood, H&M and Zara have been adapting their clothes with more of a sustainable focus this was 10 years prior to this global emergency. Climate change is now something that has to be at the height of the clothing industries agenda and even the packaging plays a part.
According to The Sustainability Annual Trends Report: 2020 will be a pivotal year for plastic action. With many more calls from activist’s than ever before, key retailers both online and offline should now be taking a more systemic approach to tackling the use of plastic, using more sustainable options that are less harmful to the environment. According to Actually Consumers: Products marketed as sustainable grew 5.6 times faster than those that were not. It seems consumers feel more confident purchasing a product that is ‘organic’ or ‘sustainable’.
Retailers must now make adaptations to product ranges and packaging to source more sustainable solutions as retailers and big corporates have been tasked with hitting government green targets (2030/2050).
So what are the most effective emerging solutions that retailers and big corporates can be using?
- A changed climate is the new normal, climate change is happening now.
Companies will need to start submitting climate risk assessments, depending on the business size this could mean submitting how many company cars are used, how much energy the business uses and in some cases how much shipping is undertaken transporting goods from oversees.
- Building the infrastructure of the future.
Driving innovation and disrupting business models, consumer goods companies are continually piloting the re-designing of their products and packaging that requires less plastics, in order for businesses to achieve this it will require collaboration and investment in the future. It has been said by many corporate leaders a business will cease to exist without a sustainable business strategy.
- Supply chain.
A 2020 forecast for supply chain management is that digitisation will continue to grow in sophistication, advancing end to end transparency. With lots of companies having to achieve their sustainability development goals set by the government it will require businesses to rapidly scale these technologies. Deeper collaboration between industries will also be needed for growth acceleration in supply change management.
- Human well-being.
Sustainability is not just about planting trees, it’s essentially also how you treat your internal and external stakeholders. A vital part of companies paying attention to human well being is how they treat their employees. For year’s mental health and well-being has been ignored by lots of global companies. Companies for a long time did not take into account stress management and flexibility surrounding working hours for families, this is now significantly beginning to effect many companies bottom lines. A key fact regarding this issue from The World Health Organisation is that untreated depression and anxiety leads to 1 Trillion in global productively losses each year.
Understanding generation X, Y and Z:
Everything around us is changing at its all at a very fast pace. One thing is for sure is that technology is now at our finger tips and we must embrace change along with the emerging technologies that now serve us. In 2019 we have seen You Tube being used more frequently as many of us turn to the digital channels for beauty tips and skin care regimes. As marketers we have seen the revolutionary Tik Tok video platform emerge which is now used by lots of the younger generation.
On the other hand, lots of us are more familiar with Facebook and Instagram, some are more old- fashioned and prefer TV advertisements. There is a term for all of these things and that’s the Baby Boomers, Generation X, Y and Z.
So what exactly are these terms?
The Baby Boomer 1944-1964 (56-76 years old).
You may have heard the term ‘Baby Boomers’ as it’s widely covered in the press. This is the generation born between 1944 -1964. This demographic are post world war 2 and are now also living through a national pandemic. They grew up in a time where fax machines still existed and jobs were advertised in the local newspaper.
This is a demographic that is now living for longer, even retail stores are having to adapt their offering to the Boomers and their differentiating shopping habits. They are the biggest consumers of traditional media, TV and radio. Boomers were born into an era in which house prices were at an all time low this has resulted in this generation holding 80% of the worlds wealth. They typically are consumers that prefer cash, loyal to 1 brand and 90% of this demographic have a Facebook account.
Gen X 1965-1979 (41-55 years old).
Born between 1965-1979. Referred to as the MTV generation. This demographic still read newspapers and magazines along with listening to radio. On average this generation watches 165 hours of TV per month, grew up in a time where finding a job was not easy and prefer transactions in person. Gen X went through an entire period of the technological evolution and the rise and development of the media, as well as enjoying the stability of work, they are less dependant on smart phones than Gen Y and Z. In terms of social platforms 9 in 10 have Facebook, less than half are on Instagram and Twitter/Snapchat remain the least popular social platforms with Xers.
Gen Y - 1990’s-Early 2000 (23-40 years old).
Gen Y and we’ve all heard the term ‘Millennials’. This demographic were born between the early 1990’s and early 2000’s. Typically have a bad reputation in the press. The Times Magazine refers to this generation as the ‘Me,Me,Me’ generation.
As a millennial myself we tend to want things quicker, and faster. This demographic are very impatient. We’ve had to be fast adapters to new technologies and we typically use social media to communicate. There was recently an interesting article wrote by the BBC calling all Millennials ‘The Burnout Generation’ https://www.bbc.co.uk/bbcthree/article/245d1d9f-17f6-483e-81d2-3979d69432c6 . This article addresses the pressures on Millennials their inability to switch off and how many of us have secondary jobs to survive, making use of the gig economy and working 100 hour weeks.
Generation Y will buy a £4.50 latte without a second thought and is also known as generation rent, Millennials buy into experiences, care more about health and fitness than previous generations and are keen buyers of beauty products and vegan food products. This demographic love mobiles, prefers to use Instagram and Facebook. Gen Y prefer brands that share their values and also care very much about mental health and wellbeing. Costa Coffee is a good example of a brand that quickly adapted as early as 2010 to millennial buying habits, differentiating and customising products to create a different coffee experience.
Gen Z – 1997-2012 (7-22 years old).
Gen Z are now entering the workforce, this demographic typically knows everything about Tik Tok and are a generation that was born into the world of social media, this is where you see children in restaurants on Ipad’s and it’s all they have ever known! Reports suggest this generation may be complete game changers in terms of how industries operate, with so many new emerging technologies and many consumers moving their shopping habits online, Gen Z will go into jobs that right now we don't even know they exist.
Gen Z care very much about sustainability and political issues. There is a political trend coming from America ‘March for our lives’ where young people are standing up against gun crime and we are seeing more young people in London taking a stand against climate change. In terms of social platforms this generation prefer Snapchat, Instagram and Tik Tok and typically research everything on You Tube. Reports also suggest they will be hard to market to as some companies are slow to adjust and adapt to the whole social trend. Some reports are limited for this generation and less advanced as this generation are only just entering the work force.
Make room for the skincare industry...
We’ve seen the make up boom, where lots of younger girls and even men have congregated to stores to get their make-up done for those all important big events. Beauticians now get paid to contour faces and consumers are quiet happy to pay the price tag. Getting make up done or having a specialist facial is now a nice break from our busy day to day lives.
Skincare products and services are becoming increasingly popular as we are seeing a shift in buying behaviours. Consumers are now buying more organic products and for the first time ever the skincare industry is growing faster than make-up.
The latest figures from the global skin care product market shows the true potential within this industry. Sales are projected to reach 183 Billion by 2025 rising by 4% each year. The increasing demand for herbal, anti-aging, organic and natural products is enforcing this boost in sales within skincare, followed by a rising awareness of SPF/UV protection fuelling more market growth.
The skin care industry is also being driven by the power of social connection. We as consumers know what products to use and buy because of the help of Instagram Influencers and You Tubers which also help us with our skin care routines.
Skincare brands enjoy a 40% higher Instagram engagement rates compared to colour cosmetic brands. Instagram stories has become a leader in this engagement as Instagram allows influencers to apply educational content.
Consumers finally have an outlet in which they can learn about products and routines. Social Media and the use of technology has helped brands and consumers to deepen relationships within the skincare industry and essentially become more educated on the product or routine before we buy!