How brands can win consumers’ hearts in the new marketplace
More than anything, actions define brands. When brands speak, what do they say? When they introduce new products, are they relevant? When they support...
How brands can win consumers’ hearts
in the new marketplace
A GfK What’s Next 4 Consumers guide
More than anything, actions define brands. When brands speak, what do they say? When they introduce new products, are they relevant? When they support causes, is the effort convincing?
These and other key questions resonate with consumers, now more than ever. In times of great need and uncertainty, consumers expect more from brands, and may be quick to judge those that fall even slightly short.
The past year has been a time for brands to take action, not sit on the sidelines. Many have stepped up, with wildly varying results – from moving and meaningful to transparently self-serving.
So what should brands
do next?
In a time when stability seems within our grasp, yet so much still needs to be mended, how can brands deepen their value to consumers? Many marketers, brand managers, and others are asking this question every day, searching for insight and inspiration.
To help guide brands in this difficult time, GfK has launched What’s Next 4 Consumers, a series of in-the-moment studies and conversations to look deeply at this unique moment – and explore what brands can do to anticipate the needs and wishes of tomorrow’s consumers. Our recent study of brand purpose and promise yielded sometimes striking discoveries about Americans today – and served as grist for a far-reaching discussion with GfK experts on brand strategy, consumer trends, and digital transformation.
The new shape of everyday life
The new shape of
everyday life
GfK’s research shows a continuing polarization in US consumers, with some saying that they have already returned to their pre-pandemic lifestyle, while others report that they will be cautious for a long time to come – perhaps never returning to the life they led before.
Recent GfK research shows that 57% of Americans plan to be cautious about resuming a more familiar, social way of life – while 21% report that they “can’t wait” to do the things they used to. Yet US consumers are almost evenly split on how they are actually living right now, with 53% saying they are “living normally as they did before,” but 47% reporting that “life has been very different.”
But the disruptions and difficulties of the past year (and then some) have also given many consumers new confidence and an appetite for experimentation. Things like click-and-collect or contactless payments have become second nature. For brands, this can be a double-edged sword – an opportunity to gain ground or lose it.
"During times of crisis, consumers adapt mindsets, adapt expectations from brands – but they're doing it at different paces. Brands need to stay in tune with target groups, to understand where they are on that trajectory. What are they comfortable with? What new levels of innovation are they seeking?" – Eric Wagatha, GfK Consumer Life
"So many consumers have had to change behaviors over the past year – and that really puts them in a mindset, I believe, of heightened receptivity. People are more willing to try different things and have different experiences, because they've had to over the past year. And in many cases, it's been positive – being served by a brand perhaps in a way that they didn't think was possible." – Natasha Stevens, Strategy and Product Innovation, GfK
"We're in an environment where anything is possible. We've had a huge disruption that has opened the door for a lot of innovative thinking – the ability to create, to evolve your product offerings, to think about how you can potentially message even a little differently to different audiences." – Amy Wills, Marketing Effectiveness, GfK
"Let's not look for a new status quo. I think what we've learned from all of this is that brands need to continue innovating, need to continue to risk it. If the discussion is, “How do we get back to normal?” I think you're missing the point. What we learned from the pandemic is that we need to preempt situations like these by keeping the innovation channel open at all times." – Eric Wagatha
The changing face of brand loyalty
The changing face of brand loyalty
The contours and timelines of brand loyalty may have been something that marketers and brand managers felt they had mastered. Not so much anymore … The pandemic, social justice movement, and economic collapse of the past year have rewritten the rules of loyalty – in ways that neither consumers nor brands may fully understand.
The good news is that brands still have great pull with consumers; almost 9 in 10 Americans have at least a few favorite brands, and over 4 in 10 say they have “a lot of favorites.” But when GfK asked people to rank the characteristics that make them loyal to brands today, the top concern was “safe use of my data” – cited by 59% -- followed by “treating all races, genders, and ethnicities equally” (54%). Overall, four of the six highest-scoring brand benefits veered outside traditional considerations (product quality, customer service) and even reflected 2020-centric concerns.
The past year has also seen consumers try new products simply because they had to. People who could not have imagined buying any other brand of paper towel or laundry detergent suddenly grabbed whatever was available – and were grateful to have it. Similarly, shopping exclusively online made many realize that brand selections on ecommerce site are often different than those found in stores – forcing more adjustments. The implications for brand loyalty are profound.
"The key takeaway here is that the loyalty equation will continue to expand. There are some fundamentals we can't set aside, but we need to keep on the consumer’s pulse. As we all moved online – all of a sudden, we’re entrusting a brand with a lot of information: credit card numbers, multiple transactions. This does become part of the loyalty equation." – Eric Wagatha
Resonating with new consumer concerns
Resonating with new consumer concerns
There have always been consumers who looked to brands for leadership and action in social causes – and most companies responded with traditional, somewhat predictable activities. But the past year has put brands in a sometimes-uncomfortable spotlight; they are expected to act more urgently and with greater sincerity, but also at risk of criticism across social media for any missteps. Sitting on the sidelines is perhaps the riskiest option of all – but how can brands move forward wisely?
GfK found, in fact, that Americans are divided on brands and social activism. While over half said that treating all races and genders equality is essential for establishing brand loyalty, one-third said they “frequently” avoid certain products or services because of their social positions.
This split is also clearly generational, with research from GfK Consumer Life showing that Millennials and Gen Z look to brands to take social action – even if they disagree with their positions – while older consumers would rather brands stay on the sidelines.
Source: GfK Consumer Life
"Once you get somebody into your brand, and you have some affinity, you can't just turn your head and walk away. Loyalty is there until it's not. We really need to continue evolving. What are the offers that continue to be appealing to those who are already our brand advocates, versus those who are maybe still considering us? Loyalty needs to be an additional way that we think about how we evolve our offering." – Amy Wills
"I think what consumers are really looking for from brands is not to take a definitive stand on one side of an issue or the other, but just to position themselves with some humanity, with some decency." – Amy Wills
"We're recognizing that brands need to play a greater role beyond the confines of product and benefits and service. Consumers are looking for direction and for corporate America to become more active. It's a little more challenging for a more traditional brand – one that's been around for decades – to all of a sudden start engaging. What we don't know at this stage is, how will their established customer base respond?" – Eric Wagatha
"The word we come back to is authenticity – brand authenticity. Are your activities, your ideas authentic to your brand? We've seen too many examples of knee-jerk reactions. When we're talking about social responsibility, it really needs to resonate with the core of the brand positioning." – Eric Wagatha
What we really know about tomorrow’s consumers
What we really know about tomorrow’s consumers
So many of the hopes and plans of today’s brands revolve around tomorrow’s buyers. Millennials, and especially Generation Z, have become nearly the sole focus of many mainstream companies – and marketers may have felt that they were beginning to get a handle on the youngest generation of consumers. The events of 2020 have changed all that …
Americans in the 16-to-35 age group were 60% more likely to be affected by layoffs and furloughs during the past year, when compared to those aged 35 to 50. And even though they are more likely to have had their hours restored, the longer term impact of this experience is likely to continue affecting their behavior as consumers.
Younger consumers also seem divided about their shopping strategies in the midst of the pandemic; while they are slightly less likely than average Americans to say they will buy “whatever is convenient or inexpensive,” they are also more likely to say they will switch away from a favorite brand. In our recent study of consumer attitudes, they scored lower on all characteristics of brand loyalty – meaning that brands have a harder time “sticking” to this group.
"This group is typically a little lower on measures of trust – they're just a skeptical bunch, a little fickle in terms of the brands they use. They are willing to try a lot of brands – that's just who they are. They have been really impacted by the pandemic – in terms of unemployment and challenges of finding jobs, moving back in with parents; all of those things have been more directed at this group.” – Amy Wills
"That 18-to-35 timeframe is when brand trial happens – from high school to college to early career, to coupling or family formation. So it's naturally a time for experimentation and finding the brands that I'm ultimately loyal to. We had some of our clients ask why some of their brand metrics have gone down during the pandemic. We weren't out in stores, we were not consuming – we were hunkering down. I think it was just a bit of apathy from what has happened." – Eric Wagatha
Taking steps into a richer future
Taking steps into a richer future
So what should brands remember as they make plans for 2021 and beyond? Clearly, brands still hold huge influence – but no one should be feeling like they have the post-pandemic world fully mapped and charted. Remember …
- Loyalty matters – but the terms are still evolving and shifting
- Different types of consumers are moving ahead at different paces
- Risk is welcome, so keep innovating and evolving
- Engaging with the world is a must – but don’t overestimate the license consumers have given you to speak out and act up
- Measure more often – be attuned to unfamiliar signals from groups you might feel you had figured out a long time ago
"The way to stay most relevant is to keep your ear to the ground in real time, more than ever. Yes, this is going to make things more complicated; but the reality is, we are 330 million people, and the closer we can get to a 330-million-individual strategy is one of the key learnings coming out of the pandemic."
– Eric Wagatha
"I would say, widen your lens and figure out how you can really evolve and have a rebirth, in a way that allows you to speak to more people – that's really differentiated from maybe who we were as a brand and how people knew us. I think our ability to differentiate is also a way to continue evolving our brand from a consumer perspective."
– Amy Wills
"It is essential to both actively listen and learn about consumers’ aspirations and concerns while simultaneously measuring the impact of your marketing activities on your brand perception on an ongoing basis. Integrating these core brand actions is essential for market relevance as we move forward from the pandemic."
– Natasha Stevens
Brands matter. Brands are emotional responses between a corporation and a consumer. Yes, there are challenges to that. It really is incumbent on the brand – just like you would have a relationship with someone in your life, how do you keep that spark alive? That's where communications and marketing strategies come into play."
– Eric Wagatha
Meet GfK’s experts
Natasha Stevens is GfK’s EVP of Strategy & Product Innovation for North America, leading partnerships with key players in the digital space.
Eric Wagatha is Head of GfK Consumer Life in North America, helping global brands leverage consumer trend insights to set strategy and prepare for the future.
Amy Wills is VP of Marketing Effectiveness at GfK, helping to guide brand strategy engagements with companies in a variety of sectors.
