Shopper behaviour is changing day after day.

A whopping 81% of Brits have changed their shopping habits due to cost-of-living pressures in the last 2 years.

It all comes down to one universal truth – consumers are reluctant to spend, and businesses are reluctant to make big decisions.

We’re at a point of post-new-normal. A post-post Covid world, where people are more hesitant with their money than ever before. This trend isn’t reserved for just one or two sectors, we’re talking downward trends across the board.

Instead, consumers are now focusing on their ‘need to haves’. Not to go all Maslow’s hierarchy of needs, but it’s a fact that consumers are now faced with a choice of this or that – it’s becoming less common that we can afford both.

Customers are looking for new ways to make their cash spread a little further, makings swaps to store brands, using buy now, pay later options like Klarna, or breathing life into pre-loved goods and choosing to go second-hand with apps like Vinted or Depop.

So, if we’re now in the new world of customer journeys, how do businesses navigate it effectively? How do we ensure that our goals are aligned with our consumer’s needs, not just their wants? Let’s look a little closer at that, shall we?

Need to have – the new normal

As 2023 began, consumers faced a challenging economic landscape, prompting 55% of them to cut back on non-essential spending. Traditionally, savings were reserved for significant purchases like luxury holidays or high-end furniture. However, with increasing living costs, 33% of consumers have found themselves having to dip into their savings just to cover basic needs. Additionally, 34% completely abandoned plans for big-ticket items altogether, prioritising necessity over luxury.

With consumers tightening their purse strings, we’ve seen a few trends beginning to emerge throughout the customer journey.

Swapping to cheaper brands

In a significant market shift, over one third (38%) of consumers are now willing to abandon well-known brands for more affordable supermarket value ranges. An additional 19% plan to make this switch in 2024 if they haven’t already, while 28% are considering it. Altogether, this could mean a staggering 85% of consumers may move away from traditional household names in favour of budget-friendly alternatives.

Buy now, pay later

Shopping habits and payment preferences have drastically changed; consumers are increasingly reluctant to spend their cash upfront. The “Buy Now, Pay Later” model has surged in popularity, becoming a major trend in 2024. In the UK alone, 36% of the population, or over 19 million people—a 5 million increase since 2022—have adopted this payment method.

Notably, 55% of millennials are utilising Buy Now, Pay Later services, particularly within the fashion industry. While it may appear to be a handy option to help spread the cost of purchases, it has created a demographic with much less financial stability – one that businesses aren’t necessarily keen to engage with.

Going second hand

A few years ago, it would be fair to say there was still a certain amount of negative stigma around buying second-hand goods. But that sentiment has changed, quickly and dramatically.

In 2023, Amazon reported a 15% increase in second-hand goods sales, generating over £1 billion in revenue across the UK and Europe. Similarly, eBay has seen a 20% rise in second-hand fashion purchases, and listings for second-hand furniture have surged by 140%.

Platforms like Depop and Vinted have also experienced significant growth, with Vinted’s sales jumping 51% year-on-year. Globally, the second-hand market has reached £354 billion in sales, with second-hand clothing accounting for £177 billion. This segment is expected to nearly double by 2027, growing three times faster than the broader second-hand market.

So, what does this tell us? Consumers still want to look nice, dress nice, feel good and enjoy luxury products, they simply don’t want to, nor can they afford to pay luxury prices.

A person types at a laptop while holding a credit card

 

Our top 4 rules for brands – what to do, and what not to do

At Verkeer, we work with a diverse range of clients, who in turn work with a wide range of consumers across a multitude of industries. From our experience, we’ve pulled 4 of our top DOs and DON’Ts that we recommend brands adopt if they want to remain successful when navigating the new world of customer journeys:

DO prepare to be interrupted: Consumer journeys are significantly longer now than they were just a few years ago, and in the time it takes customers to come to a purchase decision, there’s plenty of scope for rival brands to jump in and steal a sale.

DON’T race to the bottom. Price cuts may seem like a quick and easy way to attract consumers to convert, but long-term, this isn’t helping your business.

DO focus on retention and repeat customers,

DON’T push all of your time, effort and money into acquiring new customers.

DO share your purpose (but only if it has some substance). Consumers, now more than ever, resonate with authenticity, and sharing your story and help customers remember your brand.

DON’T just shout into the void. If your purpose doesn’t resonate with your audience and they aren’t engaging, you need to re-examine your stance.

DO lead with empathy. Understand that consumers are struggling now more than ever, and offering opportunities to help them through these difficult times will resonate with your audience long-term.

DON’T fail to adapt. If your brand is hyper-focused on nothing but making money, customers will recognise that and they will choose other brands more closely aligned with their beliefs and values.

The new customer journey

Fundamentally, the factors driving the traditional sales funnel are largely unchanged except for one key area. Something brand have never had to face before.

The digital era has opened up numerous opportunities to engage more frequently with our audience. However, it also introduces multiple potential drop-off points where consumers might disengage. Today’s consumers might ignore ads deliberately, procrastinate over decisions, switch to competing brands, or become discouraged by unexpected costs.

As a result, the likelihood of a customer dropping out of a purchase decision high sky-rocketed. It’s a double-edged sword that requires flexible strategies that will help increase engagement and effectively combat these key drop-off factors.

There are a few tried and tested ways that you can adopt to help shimmy your customers down the funnel and keep them loyal to your brand for longer.

Retention

Did you know that acquiring a new customer can cost 5x more than retaining an existing one?

So, how do you maintain your customer base effectively? Key strategies include:

  • Offering a great quality product
  • Segmenting your messaging and personalising it to your audience
  • Continually add value for your customers
  • Understanding how your audience progress through your products or services.
  • Listening and acting on feedback
  • Providing exceptional customer service

Showing your existing customers they matter plays a HUGE roll in strengthening their loyalty and encouraging them to engage long-term.

 

Share your purpose

Humans love stories. They entertain us, inform us and connect us. So it’s no surprise that communicating your brand messages through stories is 22 times more memorable than just relaying facts. To make your messages resonate deeply with your customers, here’s how you can craft them effectively::.

  • Make it authentic
  • Create an emotional connection
  • Keep it simple and clear
  • Be consistent across all channels
  • Make it engaging and test formats
  • Showcase the impact you have – prove your messaging has substance

 

Lead with empathy

There’s an interesting disparity in what brands want to do vs. what consumers think they should do right now when it comes to their marketing spend. 85% of consumers think that brands should cut down on their marketing spending to help tackle rising costs, passing the savings back to them. However, over 40% of UK firms claim they expect to increase their marketing spend this year.

So what is the solution?

Some practical things that you can do to show your empathetic to your customers and their financial situations include:

  • Acknowledge that times are tough and communicate pricing changes transparently
  • Offer flexibility in subscription models
  • Offer buy now, pay later options
  • Consider loyalty programmes to earn points for discounts or vouchers
  • ‘Just because’ discounts where appropriate
  • Improve visibility around the value your customers are getting from you brand, and how it helps them.
  • Focus on quality
  • Show trust signals and reviews
  • Allow people free trials where possible
  • Offer genuine no obligation help like workshops, webinars or product walk-throughs

 

Navigating the new world of customer journeys takes a little finesse. Brands cannot expect to stick to pre-pandemic tactics, in a world that is very different to what it once was. Consumers values and priorities have changed. The economy has shifted us from a population focused on what we want, to now prioritising what we need.

So, what are the three things’ brands need to survive?

Adaptability. Empathy. Transparency.

Unsure how to shift your business strategy to speak your customers’ language? We can help.

Get in touch today and let’s chat about how we at Verkeer can work our magic on your brand.

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