7 consumer trends that will define the digital economy in 2021, according to Adobe
We found a compilation of excellent references for understanding the 2021 trends, which you can see here, and decided to translate some of them, in different segments. This first one was written by Mercedes Cardona, and is from Adobe.
While few say they will miss 2020 when it ends, last year’s events – read: the pandemic – will continue to shape consumer behavior and, in turn, how brands market to them in 2021. Evolving consumer behaviors include how they buy and what they buy, new priorities about what’s important, and higher expectations about customer experiences (CX). “Our pre-pandemic customers are no longer the same,” said Fiona Blades, chief experience officer at MESH, a market research firm. “Their needs are changing.”
1. Online shopping will play a bigger role
Consumers have certainly become more comfortable with online shopping as a result of the pandemic. Case in point: Cyber Week, the five-day period between Thanksgiving and Cyber Monday, broke all kinds of records this year, as many Americans chose to shop online to avoid crowds in stores amid COVID-19 concerns.
Data from Adobe found that consumers spent a colossal $34.4 billion during Cyber Week, representing a 20.7% increase year over year (YoY). By comparison, the YoY increase from 2018 to 2019 was 13.4 percent.
In addition, although many people spend more time at home, with access to larger devices such as PCs and laptops, smartphones still accounted for 41.1 percent of online revenue during the five-day period, up 7.4 percent year over year. That number will only continue to grow in 2021, especially as 5G becomes more widely available and completely redefines what is possible from a CX perspective online and on mobile devices.
Also worth noting: social media is driving more online sales. Over the Thanksgiving weekend, for example, social media generated one in 10 visits to retail websites, a 17% increase over the previous year. The growth here is what is important to note, as social media generated only 3% of online revenue. Organic search was the biggest winner during the period in increasing revenue share, up 11 percent year-over-year. Paid search continues to dominate both revenue and visitation this year (25% and 24% respectively), but direct traffic is not far behind (21% and 22%).
At the end of the day, an experience-based approach to commerce – across all channels – will be imperative by 2021. And remember: shoppers want online shopping experiences that minimize friction: “they don’t buy from Amazon because they like the brand or want to wear Amazon T-shirts,” said Alex Hamilton, director of innovation at Isobar, pointing to Amazon’s innovative and personalized online experience as the secret of the e-retailer’s success.
2. Don’t touch it
As the online holiday spending shows, consumers expect contactless experiences in 2021 as they continue to take steps to limit coronavirus exposure, experts agree. Forrester predicts that brands will look to replace touch screens, in-store feedback buttons, credit card PIN pads and other touch media with touchless interfaces that rely on gestures, voice and proximity.
The pandemic was also an accelerator for augmented reality (AR) and virtual reality (VR) experiences, said Ivan Markman, business director at Verizon Media. With social distancing the norm, brands have found new ways to engage, with an “overwhelming appetite” for events, he said. For example, the organizers of London Fashion Week in September used VR to replace some fashion shows.
“With social distancing, content and immersive experiences will be another topic that will keep us busy,” Markman said. As 5G expands, platforms will have more potential to deliver these experiences across devices in a more integrated way. And with the arrival of the iPhone 12 5G, more consumers will be able to access them.
Digital platforms will begin to add connections into extended reality experiences for consumers, and “there will be a huge demand for brands to cater to them in those experiences,” Markman said.
3. Solidarity spending
Given the turmoil of the pandemic and the Black Lives Matter movement in 2020, purpose and corporate social responsibility will be a requirement for most brands, as consumers now demand, said Adobe CMO Ann Lewnes.
“Now it’s not just nice to have,” she said. “You’re seeing companies making this a great move to plant their flag everywhere.”
Consumers have developed a stronger affinity for what Kilpatrick of Pinterest called “supportive spending”-being more thoughtful about why they make a purchase, who they buy from, and merchants who emphasize their values. She cited as an example how some consumers are choosing to buy from black-owned businesses to support the Black Lives Matter movement.
In addition, consumers have learned to value community more than “things for their own sake” and expect to see brands helping to rebuild a better post-COVID-19 society, said Marie Stafford, intelligence team leader at Wunderman Thompson.
“It’s about thinking as a brand: what is your net positive impact? There are deep roots in that,” she said.
Sustainability is also important for consumers, who expect the brands they buy from to address their environmental impacts in packaging, recycling, and production.
4. Talk to the bot
The level of consumer demand for personalized experiences is increasing and expectations are higher, said Ali Reed, managing director of the Essence marketing agency in the UK. He noted how one Generation Z participant in a focus group, for example, was “genuinely angry” about hearing ads for a garden center on his audio stream.
One powerful way to keep up with these consumer expectations is automation, and today’s technology now offers options to marketers. Five years ago, people didn’t expect to have a speaker in their living room that they could command to do things for them, said Tim Irwin, CEO of EMEA at Essence. Now, 66 percent of marketing insiders believe most interactions between brands and consumers will occur through AI in the next 10 years, from the consumer digital assistant to the branding service bot.
Marketers will need to spend some time improving the technology, advises Mastercard’s director of marketing and communications, Raja Rajamannar. The connected car, for example, is turning vehicles into a mobile office, where CX will need to be handled as if it were taking place in the living room. And this in-home voice response system will require marketers to develop a “sound signature” in the same way they have a logo, or else they may become invisible to consumers.
“There are all these new technologies coming,” Rajamannar said. “All the marketing rules will be totally changed upside down.”
5. Sofa-based content consumption
The lockdown, and so many people continuing to work from home, means much more time spent streaming media on platforms like Netflix and Hulu, a behavior that should last long after COVID-19, experts said. In fact, streaming media has become mainstream media, with viewers hooked on “Tiger King” and subscribing to Disney + to watch “Hamilton” while the theaters are closed.
Adobe Digital Insights research, which used Adobe Analytics to analyze more than 24 billion video starts and more than 6.6 billion hours of video content viewed online in OTT (OTT = Over The Top, is the on-demand content like Netflix)., desktop and mobile platforms, discovered binge-watch patterns in recent months and found that consumers completed videos more frequently during the pandemic than before. When looking at video time spent, OTT was the main driver of growth.
Cutting cable channels “was already one thing, and it really took a leap,” said Todd Kaplan, PepsiCo’s VP of soft drinks for the Americas. “None of this was new, [mas] people are now using it properly.”
It’s a great opportunity for brands, thanks to the “explosion in viewing time,” added Babs Kehinde, senior director of publisher development at Pubmatic. In addition to typical commercials, brands can also consider strategic product placement in content.
6. Decrease brand loyalty?
The growth of online shopping has turned many products and services into commodities, experts say. Craig Dempster, global CEO of performance marketing agency Merkle, cited a survey showing that 75 percent of consumers tried new websites and brands during the pandemic and 65 percent expect to integrate them into their post-COVID-19 lives.
Generation Y and generation Z have always been seen as less brand loyal, and that trait is growing now, said Ryan Hedges, vice president of strategy and experience at The Marketing Store. Many consumers are not buying what they used to buy, instead turning more to comfort and nostalgia, as can be seen in the sales growth shown by General Mills breakfast cereals or the ratings of the 1980s trend “Thundercats” episodes on Hulu, he pointed out.
These changes will affect the way marketers handle their loyalty programs. Rewards programs had already evolved from point reward schemes to more experiential rewards, but with travel paused, this has forced marketers to rethink their rewards to offer more services that can be delivered in a digital environment.
“Loyalty points mean nothing if I can’t spend them,” Hedges said. “Showing them real value, rather than word-of-mouth value, will be the key, and that will expand and grow in 2021.”
7. Health and wellness
It is no surprise that after more than a year marked by constant concern about coronavirus infection, anything health-related will be the priority of consumers.
“Security has become the new trust. It’s absolutely fundamental now and it’s what people are looking for in brands at the moment.” Fiona Blades, President and Chief Experience Officer, MESH
Even non-healthcare companies will need to make decisions based on health. Fer Machado, CMO of Burger King, noted that his organization had to make a quick decision to require masks in all its stores.
“When the crisis comes, you want safe options,” he said.
People are also reconsidering how to invest their time – and they are investing in themselves, said Kilpatrick of Pinterest. This can mean making complete changes in their lives, she said: “Intensified excitement and self-investment go hand in hand.
For example, home exercise services exploded in popularity during the pandemic. Peloton, a bicycle exercise company, expects profits to increase by 40 percent this fiscal year.
Ironically, while the pandemic has brought a kind of mentality back to basics, it has also been good for some indulgences. Consumers are placing a different emphasis on what luxury means to them, said Ed Pilkington, CMO of Diageo. He noted that sales of $100+ bottles of spirits are growing because people want luxuries that they can afford, since they cannot treat themselves in other ways.
“I’m not going to have dinner in an expensive restaurant that’s going to cost me $200, $300, $400. So a bottle of Don Julio 1942 [tequila], which costs $130…is really great value,” he said. “People are elaborating that value equation and finding that they can access it.”
It is safe to say that COVID-19 will continue to shake things up as we move into 2021. According to James Morris, CEO of creative / entertainment and sports at Dentsu Aegis Network, in the future brands will have to address their role in society change: “The big reflection of this year is that we can do more – and we need to do more.”
