A new wave of digital change
In parallel, consumers are shaping the next wave of the digital revolution. Blockchain, cryptocurrency and metaverse technologies are accelerating. And this revolution is being led by younger consumers.
One in 10 younger consumers (aged 18-40 years) have now used digital currencies to make transactions, compared with 3% of over 40 year-olds. Meanwhile experiences are also becoming more virtual - 15% of younger consumers have explored the metaverse, compared with 2% of older consumers (over 40 year-olds).
This revolution is in its early stages but is rapidly changing consumer expectations of digital experience from brands and retailers. In addition to managing the challenges of today, brands and retailers need to continue to invest and innovate in digital for tomorrow.
What UK brands and retailers need to do to embrace the new needs of the consumer
To prepare for this new wave of consumer behaviour, brands and retailers need to take decisive action. It’s clear another crisis is coming, but consumers are at least more prepared than they have been in the past.
Brands and retailers must consider how they engage and inspire an increasingly price sensitive consumer, whilst meeting and exceeding their growing sustainability and digital experience expectations.
We suggest UK brands and retailers focus on four key areas:
1. Manage the perception of value alongside an exciting offering
The need for businesses to be seen as offering good value continues, but it must both persuade the reluctant, lower-income consumer that value is on offer as well as engage the more affluent consumer with exciting new offers.
2. Manage price increases from increased costs
In our last index, an effective price architecture and tiering of ranges was key. As retailers – as well as their customers – seek to absorb rising costs, the importance of carefully managing the subsequent price increases will be essential.
3. Meet the consumer need for sustainable, economical consumption
We have seen that the changing behaviours, such as the trend to buying more second-hand or the money-saving cooking skills learnt during the pandemic, are here to stay. Retailers need to reflect this and many already are doing so, with their own second-hand and rental platforms, for example.
4. Accelerate digital investment for future digital engagement
Although many brands might feel their digital revolution took place during the pandemic, more change is coming. An acceleration of digital investment is required to meet the next wave of change in how consumers are digitally engaging, especially for younger generations.