CSA Q&A: Publicis Sapient says match experience to customer values

Retailers should take advantage of direct consumer access to create an omnichannel experience that meets customer ethical and value requirements.

Chain Store Age recently spoke with Eiko Kawano, retail experience lead, North America, at digital consultancy Publicis Sapient, about how COVID-19 has both driven more consumers online and made them more aware of supply chain sustainability issues. Kawano offered thoughts on how retailers and CPG brands can alter their omnichannel approach to customers to create a direct relationship that is based on shopper values.

How did COVID-19 change consumer shopping behavior?
For many consumers, COVID-19 heralded in a moment of pause. Two significant changes happened at once; it became harder to find the items one was used to buying due to supply chain issues, and the way one bought them changed, as shoppers flocked to digital channels. People began to reconsider what they were buying, and how. Research shows that 75% of people switched brands in 2020. In addition, a Bazaarvoice study found that 62% of people in the U.S. began shopping online more as a result of the pandemic.

Coupled with this brand and channel switching were rising concerns over the plight of small businesses, a heightened focus on sustainability, and a spotlight on social unrest. These conditions created the perfect environment for the acceleration of an ethically-driven shopping experience. Despite (and because of) pressures on the supply chain, shifting to digital channels opened up an abundance of choice: consumers could choose to shop more safely, support their communities and reduce their environmental impact, while still finding the items they were looking for.

In response, the focus on purpose-driven brands, which had gained momentum especially with millennials and Gen-Z well before 2020, continued to grow. One study found that 63% of all consumers prefer to buy purpose-driven brands. Our research at Publicis Sapient found that 33% of people were more likely to buy from a brand that aligned with their values, and 20% wanted to be able to make a charitable donation through their purchases. Another report found that 88% of people expect companies to behave ethically.
 
How did retailers adjust their CRM and CX strategies in response?
Retailers have been making broad commitments to sustainability targets, implementing operational safety improvements, and undertaking discrete programs and activities. Walmart has committed to reaching zero emissions by 2040, Kroger committed to sustainable packaging for its private label, and H&M to 100% sustainable materials by 2030. In terms of safety, when stores first reopened, Sephora and American Eagle were among those that introduced new health guidelines that impacted their operational models, and their in-store experiences.
 
Recently, Amazon and Walmart announced that customers may be asked to keep items that wouldn't be worth the shipping costs to return, or would be costly to ship, thus reducing waste. Retailers like Lowe’s and eBay are also demonstrating a commitment to social impact, with programs like ‘Making It With Lowe’s,’ a program only open to underrepresented communities, and eBay’s ‘Up And Running’ initiative, which supports small businesses.
 
What shopping trends do you see emerging in 2021?
I see three major trends. One is values-based shopping. With an increasing amount of choice, the customer has an increasing amount of control. Shoppers will continue to demand more from the brands they engage with, and more from the retailers through which they purchase those brands. With sustainability becoming the cost of entry for many brands and retailers, shoppers will expect to see their values reflected in online shopping experiences, through the items the retailer carries, and a reflection of those values embedded into the search and browse experience.

Another is CPG & small business direct-to-consumer. The direct-to-consumer trend will continue to grow. Enabled by platforms like Shopify, brands and small businesses can now reach more customers, representing more opportunities for sustainable and purpose-driven brands to reach more people. 

Customers for whom values are important will continue to move away from large, mass retailers in order to support purpose-driven brands and small businesses directly – unless those mass retailers can find a role to play, as Target is doing with Black-owned businesses, and Walmart with pre-owned clothing via its ThredUp partnership.

The third major trend is safety-driven innovation: As the pandemic situation continues to evolve, retailers will be faced with fluctuating customer behavior. With rising and falling safety concerns, shoppers may shift back and forth between digital and brick-and-mortar channels. As a result, retailers must be adaptive in their store formats and fulfillment models.
 
How should retailers respond with technology and strategy?
With customers exposed to more and more choices, and platforms like Shopify enabling better direct access to the customer, retailers must acknowledge and support the customer’s values and preferences. In addition to expanding product assortments to carry more items from values-driven and sustainable brands, the shopping experience needs to shift to become more relevant to the customer. 

By building a complete picture of the customer through quantitative and qualitative data, retailers can start to understand the values by which customers shop and reflect those values in their experiences. Initially, this may mean simple tools that let customers filter by values as they search (e.g., vegan, recycled, sustainably-sourced), but over the longer term, retailers can begin to observe trends in customer behavior and use machine learning to predict what they might be looking for next. 

This predictability could help to enable better product sourcing, more relevant experiences in-store and online, and ultimately, increased customer loyalty and advocacy – driving increased revenues.