Against a backdrop of global political and economic turmoil, 2016 has been a transformative year for retail.
In the wake of Trump’s victory, US retail analysts are rallying to work out its immediate and long-term implications. In the UK, macro events like the Brexit vote and retailer BHS’ collapse wreaked havoc, yet retail spending grew by 1.3 per cent in September and consumer confidence is on the up. The high street is increasingly under fire, while ecommerce flourishes. The result is a very confusing terrain for brands.
Consumers, too, are no longer behaving as expected. What was once considered ‘typical’ is becoming irrelevant.
Take young people, for instance, who are throwing off unflattering stereotypes prescribed to their predecessors. Galvanised by business and politics, today’s students are more likely to be found in the library than university bar. 80 per cent of teens say career success is important to them, compared to just 62 per cent of Boomers and 64 per cent of Gen Xers.
But it’s not just about age. As people seek to dismantle gender stereotypes and expand notions of identity, brands and retailers are rushing to catch up, from high-street retailer Zara’s Ungendered to Selfridges’ Agender. And, if the rising popularity of discount supermarkets like Aldi and Lidl among wealthier shoppers is anything to go by, income is also no longer the reliable indicator of behaviour it once was.
For over 60 years, products and services have been marketed under demographic assumptions, but this isn’t fit for today. The world is changing. New technologies, social media, politics and a recent financial crisis are all responsible for the declining relevance of demographics. As retail, too, continues to change beyond recognition, marketers need to update their approach.
Driven by a desire to help marketers better understand the motivations of modern shoppers, we conducted a study, Beyond Demographics. This involved extensive research, speaking to 1,000 shoppers across different UK sectors (grocery, personal care, alcohol and tech) and industry experts.
Our preliminary research all pointed to one conclusion: demographics no longer accurately account for people’s shopping behaviour today, and marketers fail to move beyond them to their detriment.
This realisation is all very well and good, but we wanted to come up with a practical framework to help marketers make the right decisions. We turned to Victor Schwab’s 40 emotional drivers to help categorise our research, while Abraham Maslow’s Hierarchy of Needs gave it scientific validation.
The result? We discovered seven key mindsets that explain what motivates shoppers today. These mindsets are present across all ages, and aren’t specific to a generation or gender. A 66-year-old plumber is just as likely to have a ‘creative’ mindset as a 22-year-old student.
So, what are the mindsets and what do they mean for brands?
A conscious shopper values helping others and our planet, and makes ethical choices. Aiming to alleviate guilt through purchases, they look for ethical and sustainable products.
Creative shoppers want to appreciate beauty and search for aesthetics. When they buy, it is to gain beautiful and innovative things that they enjoy.
A fulfilled shopper aspires to be the best version of themselves, and to live a fulfilled and satisfying life. They look to inspire others and seek good experiences. When they buy, it is to improve themselves, and as a reward for their accomplishments.
An influential shopper values standing out by being their own person and expressing their identity. They buy to improve self-confidence and social status.
A knowledgeable shopper aspires to be well-informed. They value satisfying their curiosity and having journeys of discovery. They buy to gain knowledge and have learning experiences.
A secure shopper values protection and reliability, and avoids taking risks, aspiring to be safe and secure most of all. They value price and convenience when shopping. They buy to increase comfort, and will look for chances to save time, money and effort.
A sociable shopper seeks connections with others and wants to belong to a group. They value sharing and putting a smile on people’s faces. When they buy, it is to achieve the affection of others and nurture the meaningful relationships they have with friends and family.
These mindsets aren’t static and one person might access different mindsets depending on their life circumstances, whether that’s big events like buying a first home or getting married, or simply day-to-day experiences. For example, the sector people are shopping in has a direct effect on what mindset informs their decisions.
Given that groceries are among the most essential items we buy, for example, it’s probably unsurprising that people shopping from them associate with the ‘secure’ mindset – which looks for safety, security and value – most commonly. However, brands can also benefit from knowing that grocery shoppers identify with the ‘knowledgeable’ mindset, relishing their time in the aisles, and the ‘sociable’ mindset, often looking to make purchases for others.
Tech shoppers, on the other hand, paint a very different portrait. While they are also motivated by the ‘secure’ mindset, these shoppers are far more ‘creative’, valuing aesthetics and innovation, and ‘fulfilled’, illustrating the link between technology and personal wellbeing.
Marketers should use these mindsets as a primary lens through which to better understand people’s behaviour. They should consider which mindsets are most prevalent in their category, make contingency plans for what happens when shoppers enter the retail environment, and understand how mindsets vary across markets.
In a chaotic, complex and rapidly changing world, there can be no catch-all solution for retail marketers. Instead, they must take a nuanced, flexible approach to understanding shopper behaviour. This can be done by putting mindsets at the heart of strategies. If marketers apply the mindset model within the parameters of their sector, they will be better equipped to navigate – and conquer – this new retail landscape.
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