The coronavirus pandemic has accelerated societal changes and is forcing industries worldwide to adapt to the resulting changes in consumption, and WGSN has set out to predict what consumers will be looking for in the next couple of years.
In its annual Future Consumer white paper, the trend forecasting company has identified three key consumer groups that are likely emerge by 2022: ”The Stabilisers,” ”The Settlers” and “The New Optimists.”
According to the company, the coronavirus pandemic is shaping up to be the biggest global driver of change seen in most people’s lifetimes, and it is already forging new consumer attitudes. “Entire industries are having to adapt to a new reality that demands flexibility, resilience and, above all, creativity,” WGSN stated.
It has identified four “sentiments,” or trends, driving change in society. The first one is simply fear. A chronic feeling of worry about the impact of global warming, or eco-anxiety, is rising, along with financial concerns.
The second trend is the emergence of a “desynchronized society,” where people continue to do the same things but at different moments and end up breaking down communities through lack of consistent contact.
The third one is “equitable resilience.” The ability to resist, absorb and adapt is becoming an emotional priority in a period of accelerated change. WGSN warns that the hunt for happiness is creating a spike in “toxic positivity” – the concept that keeping positive, and only positive, is the right way for people to live their lives. “It means only focusing on positive things and rejecting anything that may trigger negative emotions. But there are benefits to negative emotions,” it adds.
WGSN believes that in 2022, consumers will look for emotional acceptance and gravitate towards dedicating more time to feelings. It notes that the coronavirus crisis has provided time for mass reflection, and while fear has presided as the reigning sentiment, people are pulling together to look toward a more positive future.
The fourth and last feeling is described as ”radical optimism.” WGSN points out that in the current situation it seems that the world is lacking hope, but there is a change occurring, and by 2022 “radical optimism will push through the negative and result in a new focus on feelings of joy and pleasure.”
The Stabilisers are mainly Millennials and Gen X people, and they are prioritizing “stability across all aspects of their lives, in reaction to desynchronisation and feelings of chronic uncertainty. They are starting to opt out of the cult of productivity and opt into a mindset of radical acceptance.”
To address them, WGSN advises simplicity, calm commerce and a unified communications strategy accompanying a unified network.
“Time-pressed and overwhelmed, The Stablisers are turned off by heavy product volume in store and online. Clutter loses conversions,” according to WGSN, which estimates that the need for simplicity has been accelerated by the pandemic.
It suggests that stores create an environment that “declutters the shopping experience, and focus on packaging with direct and concise labelling. Don’t take them on a journey. Save them time.”
Since 2016, WGSN has been tracking the rise of the mood market, composed of products and services designed around how people feel, and the consultancy feels that it continues to remain a dominant path to purchasing decision. It estimates that this category is ripe for long-term investment, as it will continue to influence in 2022 and beyond.
“The Stabilisers continue to prioritise Zen-like in-store experiences and products designed to alleviate stress and soothe anxiety,” it says.
As examples of calm commerce, WGSN indicates a new store presented by the Spanish supermarket chain Consum, whose flooring mitigates noise, where bright overhead signage is replaced with light displays on the ground, and shelving heights are lowered to avoid overwhelming shoppers. It also mentions the Eath Library showroom in Seoul, where the beauty and skincare brand offers tea and ample natural lighting, encouraging shoppers to unwind before looking at the product.
The research firm believes that in 2022 consumers will look to “radical acceptance,” or the willingness to experience life and ourselves as they are. “In the cult of improvement, radical acceptance blends the paradox between self-improvement and self-acceptance,” it adds. For The Stabilisers, this means instead of trying to optimize every aspect of their lives, they will identify where they need to improve and allocate time and resources accordingly.
By 2022, consumers should be seeing the benefits of ”unified commerce,” which takes omnichannel’s many systems of record and merges them into a single one. In so doing, unified commerce creates a seamless customer experience across all channels – in-store, online and across devices. The deployment creates unified visibility across systems (inventory, customer, product, fulfilment, etc.) and retailers can track what’s happening throughout their business in real time.
While companies converge on unified commerce, they also need to ensure that communications are unified. Constant messaging is overwhelming for The Stabilisers, and results in clicking off more than clicking through, according to WGSN.
It advises three strategies to effectively address this category. By determining key priorities, life events and preferred social platforms, retailers can shift ad spend to invest in large targeted platform campaigns that will drive sales and social return on investment.
Customers should be able to choose how often companies reach out to them and what kind of offer they would like to hear more about, thus helping brands find the right balance between engagement and harassment. “Test the communication pattern and frequency to hone a seamless brand identity across platforms,” WGSN suggests.
It also recommends taking cues from single-product e-commerce sites and focusing on key product attributes and information. At the most basic level, customers immediately overwhelmed by product pushes are less likely to convert.
The Settlers, typically composed of Millennials and Gen X consumers, are looking to plant roots in their community without sacrificing their careers, and they are driving a new era of localism in the process. Rather than prioritizing newness they gravitate towards more sustainable, community-driven initiatives and stores.
“As peer-to-peer commerce continues to gain market share from direct-to-consumer commerce, companies can align with this cohort by actioning their archives and opening dedicated stores and web shops stocked with past collections. The benefits of this strategy are twofold: it drives footfall to local shops, and feeds consumer demand for exclusive product in a sustainable way. Additionally, this strategy is an opportunity to highlight and drive conversions from leftover deadstock and fabric – a challenge that is top of [the] mind for many retailers in the era of Covid-19,” WSGN states.
Among various case studies, WSGN cites the partnership in 2019 between Ralph Lauren and Depop to sell a limited line of 1990s archive pieces. The Re/Sourced collection included more than 150 pieces sourced via Depop sellers. Also in 2019, the French womenswear label Sézane opened its archive collection with a dedicated online store. WSGN also points to Rere of Jakarta, which rescues the deadstock of other companies to make new clothes and sell them through its online shop and Instagram.
WGSN anticipates that peer-to-peer social commerce will continue to rise with The Settlers, who are focused on supporting community members and driving the new circular economy. It warns that traditional and institutional brands and retailers will continue to lose market share to local retailers and community-based shopping platforms. It advises companies to identify social commerce platforms for strategic partnerships that best align with their product offer. “Start small by deploying a limited product test, and track what’s gaining in terms of sales and discovery before full-scale investment,” it adds.
Currently, many people are relying on “hyper-localised social commerce” to supplement their income. WGSN predicts that such shopping behavior will remain strong for the foreseeable future.
One example of hyper-localized social commerce it cites is Storr, which has more than 30,000 vendors in the U.S. selling 175 brands, including Adidas and Alex and Ani. Users can open an online marketplace in three steps via a smartphone. Storr handles all the logistics, including shipping, returns and payments. Sellers are paid a sales commission of up to 30 percent and can donate a percentage to their charity of choice.
It also mentions the British peer-to-peer platform MyBeautyBrand, which allows Millennials and Gen Z consumers to express their favorite beauty personalities, share their favorite products and earn commission on the products they sell.
In India, shoppers are quickly adopting peer-to-peer sales, with Meesho empowering more than a million small entrepreneurs to run digital stores on social platforms, while Bulbul.tv allows people to “go live” and sell goods to their local community.
WGSN notes that in countries such as the U.S., China, Australia and Brazil, second-tier cities are the new urban champions, gaining economic impact and increasing their contribution to the national GDP. Smart companies are focusing less on tier-one cities as those markets are increasingly saturated.
Large brands and retailers need to consider micro-fulfilment to stay competitive with The Settlers, who prefer to support local shops and retailers. Unified commerce will allow retailers to identify gaps in the marketplace and adjust product accordingly, and with 88 percent of shoppers willing to pay more for same-day delivery or faster, this is a key priority, it stresses.
It notes that Target is embarking on a micro-fulfilment strategy in the U.S., remodelling up to 300 stores per year to speed up deliveries in local markets. In the first quarter of 2019, Target stores handled 80 percent of the retailer’s digital volume, including pick-up, drive-up, same-day delivery and home shipping.
The Japanese brand Uniqlo is now using data collected from its digital retail channels to determine the location of future physical stores in China’s emerging regions. The brand plans to open 1,000 new stores by 2021, moving further inland into China’s western region. Uniqlo has invested heavily on improving its digital operations in China, developing its Tmall flagship store and launching a WeChat Mini Program store in 2018 to enhance reach and brand awareness in lower-tier cities, where it has no physical stores, according to WGSN.
It also signals that Amazon Returns is now available at more than 1,100 Kohl’s stores in the U.S. Shoppers can visit their local Kohl’s to return eligible Amazon items for free, without a box or label. Kohl’s then packages and sends the returned items to Amazon centers on their behalf.
The New Optimists
The New Optimists range from Gen Z to Boomers, but despite the broad demographic, they have many unifiers, the largest being a voracious appetite for joy. For them, livestreaming will continue to be a dominant shopping option. “As more brands shift towards livestreams during the pandemic, we will see a lasting impact on shopping behaviours. Just as the SARS 2003 rebound is attributed to the rise of e-commerce in China, the coronavirus is normalising livestream sales for Western Europe and North America,” WSGN states.
This category is oversaturated with online advertising, and more willing to turn to livestreaming for bargains and limited-edition products, it adds, recommending that retailers invest in branded livestream shopping events to drive sales.
More than $413 billion in goods will be sold through social e-commerce in China by 2022, an almost fivefold increase from $90 billion in 2017, WSGN notes, citing a Frost & Sullivan survey.
Among its livestream case studies, it mentions the American cosmetics group Estée Lauder, which hosted daily celebrity and key opinion leader livestreaming campaigns during the last week of October 2019. Viewers were directed to Estée Lauder’s Taobao and Tmall online stores, where pre-sales reached $70 million in the first 25 minutes, surpassing Estée Lauder’s total Singles’ Day sales in 2018.
Meanwhile, in January 2019, Nike released a limited-edition shoe by livestream on the gaming platform Twitch. “The buzz around securing the limited-edition shoe drove high rates of engagement and conversions, and the product soon sold out,” WSGN notes.
It is also stressing the growing importance of augmented reality (AR) and virtual reality (VR) in shopping. “The New Optimists often feel like in-store shopping is a chore, and don’t want to dedicate their precious time to it.” WGSN adds that the group tends to gravitate towards peer feedback when purchasing, so retailers should make the experience sharable.
It cites a 42-year-old female respondent saying that she usually uses virtual try-ons when in a car on the way to the airport or after putting her children to sleep. “If I think it really looks good, I’ll buy right away, like with my Ray-Ban glasses,” she said.
Among its AR/VR case studies, WGSN mentions FlipFit, which enables users to receive a “fitting room in their living room,” getting advice from friends, and getting paid to give tips through the social commerce app. It also cites Carlings, the company behind the world’s first digital-only clothing collection, which has launched a T-shirt with a logo that, on detection, triggers designs that appear via AR filters on Instagram.
Meanwhile, the Brazilian company Amey is offering its own update on physical retail with the help of technology, artificial intelligence and customized service. Two large screens at the entrance of the store act as a virtual catalog where customers can browse and see all of the clothes available. With just a few taps, they can select the items they want to try, and in a few seconds the items will be in the fitting room. They then see their name on a screen, where they can request other colors and sizes, view options to create looks, ask a salesperson for help and/or purchase items.
WGSN adds that retailers that provide a platform for group ordering and delivery will see conversions among The New Optimists. Its advice is to streamline the commands for ordering, on the principle that the fewer steps the higher the sales. It estimates that brands that focus on hyper-local last-mile deliveries, such as festivals, outdoor venues and sporting arenas, will probably gain market share.
Among its examples, WGSN selected the South African supermarket Checkers, whose Sixty60 app was launched in November 2019, aiming to achieve 60-second order placement for 60-minute delivery.
In India and the U.S., 7-Eleven’s 7Now app provides for delivery to public locations, including parks, beaches, sports fields and entertainment venues. Depending on the shopper’s location, most deliveries are available within 30 minutes. In Brazil, Nespresso and the fashion brand Amaro are working directly with Courrieros, a bike-delivery service. Items can be delivered to any location (home, work, concert venues, festivals) in less than two hours on average.
Thanks to their celebration mentality, The New Optimists have a stronger urge to spread joy, especially when it comes to savings and discounts. This is driving a renewed interest in group deals and bundle buys, both online and in-store, according to the WGSN. “By 2022, retailers and brands that embrace The New Optimists’ giving and gifting mindset are set to win with this cohort,” it says.
In the U.S., the U.K. and Australia, there are numerous Amazon shopping groups on Facebook that share recently discounted items and deals of the day, it notes.
Other case studies include Pinduoduo, a Chinese third-party social commerce platform that mainly provides group-buying offers at reduced prices. The app uses the power of WeChat Mini Programs. For each product on sale, shoppers can buy the product individually or either initiate or join a team to receive a discount. The more people in the purchasing group, the bigger the discount.
WGSN also mentions Peddler, an e-commerce platform giving shoppers discounts on the most sought-after products. In theory, the more customers that want an item, the bigger the discount. Users can enter what they are looking to buy, and then see how many others also want the same product. The group can get savings of up to 55 percent.
In Brazil, the platform Enjoei offers free shipping and/or negotiated discounts if buyers purchase several items from the same seller. The company also offers a “create a bag” function (one large package instead of multiple boxes), to minimize the environmental costs of group purchases.
We have chosen to report on this WSGN study because it provides inspiration for any brand and any retailer in our sector.