Smarter, better-informed consumers push brands and retailers to demonstrate their loyalty.
When it comes to packaged brands and retailer marquee brands, today’s smarter consumers exert a new independence today. Because they can easily access alternate choices and product-pricing-review information using mobile technology and social media, they are forcing change in the way manufacturers and retailers approach them.
The stores and manufacturers that win will be the ones that close the vast ‘trust’ gap revealed in the 2012 IBM Winning Over the Empowered Consumer study. According to their findings, just 17% of consumers in mature markets trust manufacturers to give honest feedback on product information; in growth markets the figure is slightly higher at 20%.
Chief marketing officers prioritize trust building because consumers “expect brands and retailers to be loyal to them,” said the IBM report. This is a pronounced shift in consumer attitudes—a far cry, we feel at F3, from how shoppers view frequent cardholder programs, which push them to demonstrate loyalty through purchase amounts and frequency.
F3 has seen stores and brands struggle to satisfy demanding, empowered consumers, while keeping their businesses intact. These include retailers that threaten to block cell service within their stores to keep information from shoppers who want it (to prevent showrooming), and food manufacturers that associate with good causes to gain public credit but otherwise don’t emphasize healthier or better-value products or more sustainable supply chains (to control costs).
To more consumers today, loyalty is a two-way street—and to earn it, brands and retailers should align with consumers’ lifestyles, emotional needs and values. To help convey these brand aspects, social media is an “imperative,” according to IBM. Yet in the company’s 2011 research of consumers and executives, IBM found “a clear disconnect between what consumers say their motivation is in the social space and how business executives perceive it.”
For example, the study showed:
Indeed, 71% of CMOs conceded that their consumer-product companies are under-prepared in social media, according to findings of a 2011 global survey by IBM. This widespread level of under-preparedness trailed only the ‘data explosion’ as an area where CMOs feel they need to shore up company efforts. With regard to improving their ability to convert data-based information into actionable insights, CMOs said they need to invest in technology (70%), rethink their skill mix (66%) and understand analytics (64%).
This article will appear in this month's issue of Facts, Figures & the Future publishing on Monday, July 9th, 2012. Click here for a free subscription to this monthly newsletter.