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Speaker 1 (00:00):
Welcome to unpacking the Digital Shelf where we explore brand manufacturing in the digital age. Hey everyone. Peter Crosby here from the Digital Shelf Institute. No matter how much we'd like them to stand still for just one freaking minute, consumers keep changing and it's really crucial for you to keep up with their moves or better yet anticipate them in order to drive innovation on the digital shelf in the right direction. That's why the smart folks from Wunderman, Thompson Commerce and Technology have put out their seventh annual future shopper report and their head of innovation, NAFI and Hugh Fletcher, their global marketing director and thought leadership lead. Join Lauren Levi Gilbert and me to give us the highlights of where shoppers are headed. I must warn you trigger alert, space Commerce comes up. Welcome to the podcast, Naji and Hugh, and thank you so much for being here to share the latest from your future shopper report 2023. We're thrilled to have you.
Speaker 2 (01:10):
Thank you very much for having us, having us.
Speaker 1 (01:13):
So shoppers are interacting with brands both in store and online. So this whole omnichannel experience is actually truly finally coming together, even though we still hate the word, but so it's continuing to evolve and brands are always needing to keep on top of what they are thinking so that they can adjust how they create experiences to meet them where they are. So the fact that you folks do this report every year is awesome. And so we'd love to dig into what you got out of that. So Hugh, do you want to kick us off with some details about the report and sort of it's how you approached it, et cetera?
Speaker 2 (01:52):
Yeah, absolutely. So yeah, feature is now in its seventh year. They've been for quite some time, and I guess the main aim of it is just to find out what's going on in the market, what consumers are doing, what they're thinking, who's winning. And I guess the reason for doing that is because when we talk to lots of retailers and brands, they're so busy focusing on the next quarter or the next half or the yearly results, they really don't have time to look up and see what's happening. So what we do is we take upon ourselves to talk to quite a few consumers across quite a few countries and find out what those trends are. So this report, it was launched back in June, covers 18 countries and 31,000 consumers. It's a massive report. It's truly global, and as a consequence we get a really nice view of some of the key trends that are happening in the market. And then we go out and talk to lots of people and hopefully fill in some of the gaps of their knowledge.
Speaker 1 (02:46):
And when you think about the key areas that it covers and what are some of the things you're trying to look for, what did that consist of this year?
Speaker 2 (03:00):
Yeah, so I mean it is got so many data points in it and it covers so much, but I guess our sort of brief synopsis of it is that we look at changing behaviors in the market. So what's happening with online spending? Is it going up, down? Is it staying stable? I think the answer to that is it's, it's going up since last year, but it's stabilized since Covid. We look at things like omnichannel, so you've mentioned that, and I think we'll probably talk about that later. Some of the challenges that some businesses have around dealing with omnichannel and also what the consumer expectations are. We look at who's winning, so not wanting to give away any secrets right at the beginning, but we look at the dominance of people like the marketplaces and what they're doing. But we also look at who's fighting back.
And as we mentioned, omnichannels given us lots of new channels, lots of those are trying to take a bigger share of a consumer's wallet. So we look at who's working well there, who's gaining some traction. We look at things like the environment and sustainability, how is that affecting consumers? We go to some quite weird places as well. We talk about the digitization of the consumer, the digitization of products, who and what we'll be selling to in the future. And then Naji who's everything to do with the future, talks about lots of what the technologies will be in the future and how they'll be affecting how we sell to consumers and how they'll buy. So it's a really broad report covering so many things.
Speaker 1 (04:25):
Well let's dig in. So out of the research, our audience there, the decision makers and strategy thinkers in e-commerce, digital and omnichannel. So when you think about it coming from the brand side, the people who are making the things and creating the stories, what are the things that they should be focusing on with this year's shopper?
Speaker 3 (04:53):
One of the things that's probably quite interesting is around work from home. I think still being quite a large factor in how people are shopping. So it's not just something that happened during lockdown, but it's something that seems to persisted over the last couple of years and more than likely into the future. We started to see so many more people wanting more work from home experience to be included as part of work, but we also started to see how they became less loyal to physical stores. So more than half of the people we asked these questions to said that then less loyal to physical. And also they've started to discover new brands because they're doing more buying a home, more people are available, they can get stuff delivered to their home. They're just spending that little bit more time online researching and trying new things. So I'd say that's one quite interesting area, but that basically means working much harder to have your online and offline experiences kind of marry up.
Speaker 1 (05:55):
Oh, I'm so sorry, Lauren, you do that? I'm going to shut up now.
Speaker 4 (05:59):
No, it's totally fine. I was just going to say, when it comes to the shopper wanting more experiences from working remote, I'm sure that has a lot to do with delivery and there's so many different kinds of delivery now, like to your door, buy online, pickup in store, curbside pickup. We could probably continue on with all the acronyms of what there are, but so what is the shopper really looking for when it comes to delivery? Because I know a lot of retailers are trying to offer everything when in fact it's not profitable for their business. So where do you think that the shopper is leaning towards for delivery?
Speaker 2 (06:31):
Well, I think that the message, we get loud and clear every single year. It is less about exactly what method of delivery, but it's the speed of delivery. So the message we always get is consumers want fast delivery. And when we're talking fast delivery, we're talking really fast delivery. So our stats tell us, correct me if I'm wrong here, naji, 24% of consumers say that they want the products that they order online to be delivered in less than two hours. 23% is telling hours 1% out, which is extremely disappointing. That was last year's number. Damn it fall under the first hurdle. But I think whether it's 23% or 24%, and we know it's 23%, what's interesting about that is that I guess consumers are just demanding things incredibly fast. And we saw the big spike in this actually last year. So previous years it was slightly lower, but this year significantly higher.
And these expectations being set by some of the businesses out there, most notably amongst the marketplaces, amongst the likes of Amazon. But we also have this very quick delivery companies that have appeared grocery deliveries, food deliveries, you can get these very fast. So the expectations being set incredibly high. So when we are looking at our data, it's less about the methods by which consumers get it, but it's more about the speed with which they get it. Now the challenge with that of course is it requires a huge amount of infrastructural investment. What we know is those businesses that are doing brilliantly at it have invested for a long time in the ability to deliver so quickly and lots of businesses are playing catch up or having to partner with these businesses in order to be able to deliver in that amount of time. And that again, is a challenge for some of these newer businesses into e-commerce for some of the businesses who are trying to make way and create greater revenue out of e-commerce. It's so
Speaker 4 (08:35):
Speaker 2 (08:36):
For us is a massive challenge.
Speaker 1 (08:37):
Yeah, I think because in talking to our audience, and I'm sure with your customers or your clients who are our audience, what they're being held to is finding a way to make this whole thing profitable and this is one of the least profitable areas of the whole business. And so don't you think that consumers wants and the ability to deliver are at odds? Do you have a sense in terms of from your perspective, whether that alignment's going to be able to happen in a way that works for brands staying in business?
Speaker 2 (09:19):
Yeah. Well, I guess the question, is it at odds? I guess the way we'd answer that is some businesses can do it, and that's setting the expectations for the consumers. And as we walk through all this data in future shopper, what you'll see is that consumers are incredibly demanding. So we might talk about the environment later, talk about fast delivery now talk about omnichannel and seamless experiences across those different channels. Consumers are really very demanding in an environment where one business can do it, they expect all other businesses to do it. And I think what happens is the benchmark has been set by the likes of the lead marketplaces across the world really in terms of let's say delivery, which means that now that's what consumers expect.
Speaker 3 (10:05):
I would say the top two things when we ask people what would you want to improve about the delivery experience, the top two was fast delivery, which is just every year it's all like
Speaker 2 (10:15):
You can never
Speaker 3 (10:16):
Deliver something fast enough. And the second thing is they want it to be cheaper. And interestingly, the third one is around more clarity on exact delivery times. So maybe you can't deliver on free delivery or making that cheaper, but there are things you can do to make the experience overall better. For example, being more accurate about delivery times, being able to say, you know what? I'm going to deliver it to you between the hours of nine and midday. Suddenly that's way better than, oh gosh, it's arriving at some point the coffee I buy arrives at some point.
Speaker 1 (10:55):
Yeah, that makes so much sense. And it kind of brings us to our next question because so much of buying online is building confidence with the consumer and content is a critical part of building that trust that I know what this product is, I know if it's meant for me or not, I've been able to see if other people liked it. And part of that transparent content could also be here's when you can expect it and if you build the expectations in, and if it's not unreasonably slow, then the consumer probably will be happier overall. But when you think of content as a category, what are you finding in the shopper report that the consumers are looking for to be able to get that confidence? Naji, you're the, okay, yeah, sorry,
Speaker 3 (11:45):
Go ahead. I'm looking at the percentages. The number one thing is accurate product descriptions by quite a way. And then after that comes high quality images, and then we see the brand also comes into consideration as well. So a lot of the other stuff included in that is really around high quality information that helps me make a better decision because in the end, that's what we need. You're not standing in front of the product to maybe feel the clothing to see the quality of the stitching. So how much information, how high quality imagery can you give me to help me make a much better, more informed decision? Because consumers now have access to so much information, so many different options. Once I land in your site, make sure that I have everything I need to make that decision and know that I've made the right one.
Speaker 2 (12:36):
And it's also about the speed of the decision, isn't it, Natalie? So one thing we talk about a lot is something that we call compressed commerce. So this is the concept that consumers want to get through from inspiration through search to purchase as quickly as possible. And what we see is that those businesses who are doing really well are those businesses that enable you to find products easily assess products, easily, understand products easily, and then transact and check out very easily as well. So it's really important that once you get the consumer in, you actually get 'em to transact as quickly as possible. Now, again, not banging on about too much about the marketplaces, but this is something that they are doing very well. But interestingly in this year's future shopper report, what we found was that there'd been a big shift in terms of direct to consumer brand sites as well, where they'd really improved on this, where the attrition from inspiration through search into purchase had lessened. So
Speaker 4 (13:33):
Speaker 2 (13:33):
What we were seeing last year is that while a certain percentage of consumers were getting inspiration and searching, then about 50% of those consumers were being lost elsewhere when it came to the actual purchase. And that trend has been reversed this year, and we think that's probably because lots of businesses have come back to review sites, which they spun up very quickly during Covid in order to have their presence online or to sell their products. And we think they've come back and reviewed cx, reviewed the checkout process to make sure they're not losing consumers right at the end of the experience.
Speaker 4 (14:08):
And we're hearing that consumers are looking for more to your point experiences or infotainment is a new fun buzzword. Was there anything in the shopper report around not only accurate product content and images, but telling a story, seeing themselves in the images, was there anything around what kind of experience or emotion they want to feel from the content?
Speaker 3 (14:31):
Yeah, there were two questions we asked specifically about that. So one of 'em was around the fact that people found shopping online boring, so nearly a third found shopping online boring, and then about 60% actually said that they wished online shopping was more exciting. So it kind of shows you that once you've kind done the foundational elements and everything works really well and everything is really smooth, the question is always what can you do now above and beyond to make the experience more interesting, more engaging, more exciting? Because you can't just sit still and just go, oh, do you know the site moves really fast? Search is really good. Someone else is going to end up doing that. The question is now what else can you do? Because
Speaker 4 (15:19):
Speaker 3 (15:20):
Search search is pretty fast on Amazon too, so what else are you bringing to it to make it interesting to make me come back?
Speaker 4 (15:28):
Well, do you have any examples of fun innovative things that brands are doing or that you've seen that is that uplevel from just, Hey, the presence of content?
Speaker 3 (15:39):
I mean, so one of our clients, D F Ss did something quite cool, so they integrated where they are into the experience. So it wasn't just about having really high quality imagery. One of the problems that we wanted to fix was apparently a lot of people buy sofas that don't fit in their home, not just style-wise, but physically as well. And so what we were able to do is actually build an experience where you could just scroll through the website, find a Sophie you really like and tap a button, and then suddenly you've got this experience of here's a big three D, so f r life size in my living room that I can suddenly walk around and have a more engaging experience with. So for me, I think things like that is probably quite a good example of utilizing a technology to help advance a story and make the experience more interesting.
Speaker 4 (16:29):
Speaker 1 (16:30):
Naji, when you're engaging with your clients on something like that, where is the impetus for that coming from? Who are the people around the table who owns the project? Are they using data to drive that or I am just curious as to how this comes alive
Speaker 3 (16:47):
With that one. We had a really good plan. So one of the things that we try to talk about a lot is if you're going to do something as a P O C, make sure you have some path to making it go live. Because so many people try stuff and then just here's a demo and off it goes into the bin and it's
Speaker 1 (17:05):
Never seen again
Speaker 3 (17:07):
Because it just happens all the time. I think for us it's really important that we put everything in place that when we made the P ooc first time, it was all about conversion. So we wanted to know the people that utilize this experience, do they convert more? So we tried it on one sofa for one product in one color, AB tested it, got the data back of I think it was two or three weeks, and we're like, well, the numbers are great. Okay, well why would we not do it? It is like, look at how high your conversion is. We have to do this. And then it just got rolled out across every single product line because it just made sense to do it. So if you
Speaker 2 (17:49):
Go into it knowing I want to change conversion, I want to do this thing, and it achieves it, if you then don't do it, that's just a disservice to the people who worked on that, right?
Speaker 1 (18:00):
Yeah. But what that requires, I would imagine, is cross-functional alignment among all the teams that would need to make that come to life. And it sounds like sometimes some clients will do it over and not with you, of course, because these barriers, but that's the piece that really matters is to make sure you can scale it when it's ready.
Speaker 2 (18:22):
I think also what we found is that the clients that do it well, the clients, I mean Lauren, you sort of referenced table stakes and getting the basics, but what we all know is getting the basics is actually incredibly challenging. So the best clients are those that can decouple the basics and the day-to-day running of their e-commerce operations and also maintain some kind of innovative approach to new technologies and how to integrate them. And if they can do those in parallel, then what you get is hopefully a fantastic experience and then some fantastically innovative experiences as well. What tends to happen
Is that businesses would like to create innovative POCs but actually spend most of their time fighting fires doing the basics. So the best companies are those that operate on slightly different strategic levels where they have strategies for the here and now, but also strategies for the future. And I think that's one thing we talk about loads with the future shopper is we are going to be talking about trends which are perhaps going to hit you in 10 years time. Now, if you're just fighting files on a day-to-day basis, you are never going to be looking at what's on the horizon and what you'd need to be addressing right now. You're not going to be investing in the infrastructure which will pay back in a couple of years time, but the best organizations that we work with are those that are still able to do that whilst also concentrating on getting the day-to-day right.
Speaker 4 (19:43):
Hugh, I absolutely love that point. Basic does not mean easy, and I think that is a hundred percent accurate and we see that across everyone I talk to from my personal experience being on the brand side, it doesn't mean that it's just like, whoop, we got it done. Easy button. It is really hard to get right in every category. And I think the cross-functional alignment piece is the hardest part. The fighting the fires, getting the right people on the same page, understanding why you're all marching towards the same goal and why it's important and how they see their piece in the bigger picture. But I also really like what you just said about having different levels of strategy. I think that's a really great point because a lot of organizations have a global capabilities team and then a lot of the execution happens in the regions, and that makes sense, right?
Because the region is the closest to the strategy. They're the ones who understand the market the best, but if you don't have a global capabilities team looking at what is happening next and empowered with a budget to actually make it work, I think that is the critical piece and I'd love to hear your perspective from working with clients, but that's how I've seen the mix of global and local and capability and strategy actually work well where the global team can actually execute on those trends and actually put in place a plan not to say, Hey, region, here's this cool capability now you need to fund it.
Speaker 2 (21:05):
Yeah, I think it's a challenge of business in general, which is sometimes hard to change in the sense that it's revenue orientated, it's margin orientated, it's not necessarily always able to look into the future even if it wants to. There are some organizations who totally understand the benefit of doing that, and those are the ones that we tend to work with very successfully when it comes to innovative POCs. And I guess just as an aside, just a little bit of a funny anecdote from Naji and myself, there was a couple of years ago we decided to write a white paper on Space Commerce. N's going to laugh because I always talk about space commerce. So we decided to write this piece and we started to research it and we were kind of patting ourselves on the back thinking, oh, we're going to be so clever and so innovative.
And as we started to look into this, we started to see that actually we were behind the curve. There were businesses already looking into the infrastructure of space. You have the likes of Jeff Bezos, Richard Bran, and Elon Musk. They're already talking about the infrastructure of space. You have some businesses looking at specific metals that can only be produced in space. Pharmaceutical companies looking at the effects of zero gravity. We were suddenly like, wow, we are way behind. And I think that was quite an interesting point for us to say, yeah, there are some businesses who are really thinking and really investing and those, especially when we look at some of the trends back in future shopper, are those businesses that are likely to be in a very good position in 5, 10, 15 years time to be right at the forefront of e-commerce or commerce or whatever it's going to be in the future.
Speaker 4 (22:46):
Speaker 1 (22:47):
Channel then that's a new one. Space commerce,
Speaker 2 (22:53):
We talked about. We talked about how your products can be set fired in from space right into your garden. Can they be manufactured in space? Can they be
Speaker 4 (23:03):
Warehoused in space?
Speaker 2 (23:04):
Can they be fired into you from space challenges?
Speaker 1 (23:09):
I do not want to look up in the sky and see something firing down from space into my home. If you want something delivered
Speaker 2 (23:17):
Anywhere in the world in
Speaker 1 (23:19):
Less than 90
Speaker 2 (23:19):
Minutes, it needs to
Speaker 1 (23:21):
Speaker 2 (23:21):
Speaker 1 (23:24):
Alright, future podcast coming. I was just going to say future podcasts.
Speaker 4 (23:27):
We definitely need to dig into that, but let's talk about all the other channels minus space. There's a lot of different channels that a shopper can purchase from. So in the report, did they have any insight around where they want to buy or how they evaluate where they want to buy? When we're thinking about in-store, online social commerce, what are the ways that they're looking to buy and any insights you got from that?
Speaker 2 (23:53):
Yeah, so I guess let's start with the in-store versus online. So I think we come from additional background, we're talking about e-commerce. So the tendency is just to position everything as everything's going to be digital in the future. The message we get out clearly pretty much every time we do future shoppers that in general consumers want to shop from businesses that have both physical and digital stores. So the stats, 60% of consumers globally would prefer to shop from a retailer that has a physical and digital store. So I think the first thing to say is physical is not dead. It plays a very important role. Then we also look at all the different channels, as you said, marketplaces kind of dominating at the moment. So our stats tell us at about 35% of all online spending currently going through marketplaces, about 14% going through branded direct consumer sites around about 5% currently in social commerce.
But obviously we're predicting that that will grow once we have the ability to buy within app. I think what we also look at, and not specifically just from this research but in other conversations in other research that we've done is just the challenges of all those different channels. So a piece of research that we did said that 94% of business leaders have an omni-channel strategy, which is fantastic. But then the same piece of research told us that 47% of business leaders said that there were just too many channels to effectively sell through. And I think this is the constant struggle that we find for our clients is just how do you effectively use resource and effectively use budget and prioritize which channels to sell through also while being bombarded by the marketing press about new channels and up and coming channels and elements that you should be looking at. And I think that is a really big struggle for businesses to work out where they should be focusing their attention.
Speaker 3 (25:47):
I think one thing that we're going to start to see as well is how good different channels are at different things. So what is online good for? What is offline good for? What is social good for? So working harder, brands will need to work harder to figure out where they want each of these different areas to focus. So for example, with physical stores, I personally think they're going to become less about profit and loss are more about the experience, more about talking to someone about the product, more about trying it than it is about them buying it. I think it's just going to be part of the experience. You go in, you try stuff, you talk to someone on the way home, you might buy it on your phone or when you get home you might buy it on your laptop or on social or whatever. So I think all these different places are going to just have to have different focuses as to what people want them to be used for as opposed to they all do everything, which is kind of where we're at now. Everything does has to do all of it, and that's just going to be impossible once we get to new channels that are being bloom and launched every month it feels like. So you're not going to be able to achieve
Speaker 1 (26:57):
Good experience. Well that's kind of the rub though, isn't it? Naji, because we've decided here based on their responses that shoppers are judgy, impatient and bored and they want things when they want it. And so that in some ways is what makes it go to the lowest common or I don't know, I dunno. Sure it's fair to call it the lowest common denominator, but that everywhere needs to serve every purpose because otherwise you're going to piss off some proportion of your shoppers is sort of what I'm hearing out of what you're talking about. And I know I was being more facetious than anything with their adjectives, but it's a really tough line to drive. And so how do our brands think about all these dichotomies? What are the signals that tells them I can afford to take my stores and make them experience lands and then we'll worry about them buying a product somewhere else. I know you're not saying it's that black and white, but I don't know. It seems really tough to me.
Speaker 3 (28:08):
It's an incredibly difficult place to be and I think that's why we spend so much time creating these customer user journeys because
Understanding exactly how all the different cohorts interact with your brand is incredibly important because for certain brands, the physical experience maybe is going to be the place that you go to make most of the purchasing and how you act within B2B is obviously different as well. But I think that's why brands need to work harder talking and researching their customer to create these better experiences. And sometimes you see brands just doing a thing because either someone else did it or because it's the time to do it. I remember back in the day of mobile, God knows how many years, I'm not going to say, well, everyone just wanted an app because everyone had an app. It was just, it was the thing to do. What do you want an app for? I don't know. This competitor has an app. Well yeah, but let's be a little bit more strategic.
And I feel like that's starting to happen with some of these new platforms that are coming out. So getting onto into gaming and stuff like that, but done in a way where you just think that's not going anywhere. You haven't thought enough about it and then obviously it's going to fail because you haven't thought about it enough, which means now you're going to not invest in it. So when it does become a thing, you are even more behind than you were before. So I just think there's just going to be more room for each brand to have to just think a lot hard about what each of these different channels do because yeah, you're right, people want everything all the time, but we can't just give it to them all the time. There has to be, well,
Speaker 1 (29:49):
That's something that I think is super interesting about, I mean it's a hard time that we find ourselves in terms of economics and the need for profitability and need to trim costs for top line, bottom line growth. But these are the moments where when it's no longer growth at all costs, it's growth at what cost and that forces hopefully more the desire for more informed decisions and maybe the ability for people a little lower in the food chain to push back on the c e o saying, where's my app? So because I would imagine part of your job is to arm your clients and your champions at your clients with the data they need to either get the innovation started or kill the thing that is not actually going to result in a business thing. Business
Speaker 3 (30:46):
Mean, if we go back to the D F Ss example, the web, they AR one wasn't the only demo we made. That was part of probably, I don't know, I think we looked at about 10 or 12 different things
And tested a few of them and one of them only made it to a test store and didn't even get past there. But they invested enough to know we have to figure out which one of these things is going to help us out because we know that we have to do something to solve it. We were trying to look at loads of different problems, but we had to test something. We couldn't just sit there and just wait. So I think that's another example of where you also need some push from the brand or from the client because they know they need to spend a bit of money and hopefully they trust their partners enough. They trust us enough to not just take them on a wild goose chase, right? We're committed to finding out whether or not we can increase their conversion, for example, which is easy for us because the analytics is there. So whereas with some other areas where it's difficult to see whether or not you've won or made a difference with us, it's really easy. We get the analytics, we've built the e-commerce systems that it's built on as well. So it can pretty much tell you within 24 hours whether or not something's works, right? So I think that's also another thing is the ability to test it.
Speaker 1 (32:18):
Yeah, those feel like real wins when it happens. Well, I love what you were talking about, the sort of juxtaposition of customer journey. You must know it. You must have one. That must be your sort of guiding light, which is a sort of a very foundational investment that a firm has to make and refresh on an ongoing basis and then making sure you have the room. It's sort of the basics versus the experimentation, the room to innovate and test to get those real performance improvements that everyone's going to be looking for over the next few years. And being driven on both sides by the evolution of the shopper is really important. So thank you so much for coming out to share the results of this with us and Aggie and Hugh, we really appreciate it.
Speaker 5 (33:11):
Anytime you're welcome.
Speaker 1 (33:13):
And I would say they've done a really good job with SSS e o. So if you go search Future Shopper 2023, future Shopper 2023 report, you will find it on the Google machine or whatever search you're allowed to use. Once the lawsuits with Google are
Speaker 5 (33:31):
Speaker 1 (33:33):
We find out what the new world's going to be. Thanks again guys, we really appreciate it. You're
Speaker 5 (33:38):
Welcome. Thank you for having us.
Speaker 1 (33:40):
Thanks again to Naji and Hugh for all of the data and the advice. Keep in touch with all the latest by swinging on over to digital shelf institute.org to become a member. Thanks for being part of our community.