How Consumers’ Altered Lifestyles Are Shaping the Landscape
SMITH BRAIN TRUST – Business and marketing in 2021 will be affected by trends in new technology, consumers’ concern over climate change, equity, diversity, and income inequality, and the pandemic and its economic and psychological aftermath.
For companies of all sizes, the pandemic accelerated a shift toward online and mobile shopping. “A large part of this shift will be permanent as consumers have incorporated new behaviors into their altered lifestyles,” says Michel Wedel, Distinguished University Professor and PepsiCo Chair in Consumer Science at the University of Maryland’s Robert H. Smith School of Business. “The shift toward online is beneficial for branded products because of the trust and consistency they provide.”
With that shift, Wedel expects companies to increase search advertising and online brand marketing via user-generated content, influencers and brand ambassadors. This will further transpire, he says, “across the customer journey transformed by the pandemic, while forging authentic connections with customers around issues such as sustainability, equity and inclusion.”
Wedel identifies and expands on key platforms and tools for opportunistic marketers.
With the growing success of image and video sharing platforms, visual marketing will become an ever-more important aspect of marketers’ toolbox. “I expect more deployment of automated image and video content personalization, production of short sharable clips for movies, streaming, and other entertainment products, livestream shopping, and mobile and outdoor video and augmented reality (AR) advertising,” Wedel says.
Big Data and AI
The rapid acceleration of mobile and online consumer behavior also will create opportunities for big data analytics, machine learning and AI to provide real-time market insights. “Supervised analytics where humans oversee, and tweak applications will become critical to prevent algorithmic exploitation, intrusion and bias,” Wedel says. “Super-granular personalization, for example through converging recommendation engine, chatbot and virtual shopping assistant technologies, will enable companies to capitalize on market dynamics like the trend towards working from home and the migration from cities to suburbs induced by the pandemic.”
These shifts, he adds, drive the need for a host of new products and services targeted at the individual needs of consumers.
Market research will become more important, with companies’ uncertainty about the pandemic's impact on consumer psychology and behavior still running high. Wedel says consumers can expect an accelerated growth of the use of technology in market research. “This will include the use of eye- and face-tracking and other neurophysiological signals to quantify consumer psychology, and machine learning applications on social media data to support new product development, product positioning, competitive analysis, market segmentation and advertising.”
Pent-up demand for discretionary spending – on luxury goods and experiences such as dining, out-of-home entertainment and travel – is widely expected to unleash once people will be able to resume their daily lives. “Many luxury brands are ready to deploy analytics insights and marketing resources to capitalize on that trend.”
Traditional shopping malls are poised for a slower recovery and will need to rethink their marketing by moving toward offering comprehensive consumer experiences. “This includes shopping, dining and entertainment, and encouraging tenants to provide the ease of shopping that consumers have come to expect online,” he says. This is achievable “by deploying analytics to support product search and recommendations utilizing mobile, beacon technologies, and in-store AR and VR try-on technology.” In general, omnichannel marketing practices, such as click-and-collect and return-in-store will continue to grow, he adds.
Complicating the recovery, Wedel notes, is a growing segment of the population with limited discretionary spending and increasing debt, brought by unemployment and income inequality and made worse by the pandemic. “Companies focusing on price competition, economies of scale and cost-efficiencies in production and distribution can provide great value for these consumers,” he says. “Hardline discount retailing, everyday low pricing, layaways, and long-term payment options, and free shipping are some of the tools to target this segment. I expect increasing opportunities for value-oriented sub-brands and small-ticket consumer luxury goods and experiences. Good prospects are offered as well by deal and resale platforms.”
Marketing in 2021, broadly, “will use technology and market insights to meet customer needs in real time by facilitating their interactions with each other and transactions with companies,” Wedel concludes. “And, in doing so many will help them navigate the economic and psychological aftershocks of the pandemic by providing value, utility, and enjoyment.”
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