How retailers can overcome the rise of the ‘Cautious Consumer’

In the past two years, there has been a substantial shift in consumers’ attitudes towards shopping and many have become increasingly vigilant when it comes to caring for the environment, Brexit and supply chain issues. So much so, that retailers are now seeing a new type of shopper emerge – the ‘Cautious Consumer.’

Todays ‘Cautious Consumers’ place far more focus on high quality customer experience (CX), sustainability and ESG criteria. In light of this, as well as the continued rise of online shopping, merchants need to adapt to make eCommerce work for this new breed of consumer in order to be successful.

Customer experience is crucial

2020 was a catalyst in increasing the speed of digital acceleration, driving digital retail forward and causing huge spikes in online shopping, as lockdowns revolutionised consumer behaviour. Digital stores became a brand’s only customer touchpoint and those unprepared to swap out physical for 100% digital faced a significant challenge.

The grocery sector is one of the most visible examples. Sites quickly became overwhelmed and experienced a multitude of issues, from locking users out, to inventory not updating and people having missing items when their shopping arrived. As a result, consumers are becoming warier when it comes to making purchases online. Data from a recent Quantum Metric survey revealed that impulse-buying is set to decline this year, with 37% of customers anticipating continuing price hikes and 33% saying they will plan purchases further in advance.

The companies that were already offered an exceptional online customer experience have excelled and thrived since CX became so vital. Virtual footfall from the pandemic has only added to the pressure to produce outstanding CX. Today, there shouldn’t be a company that doesn’t have CX as a priority to the point that it should be a boardroom reporting issue with a CXO to represent those interests.

If CX is managed well, a supposed negative can even be turned into a positive. For example, previous UK Government guidelines instructed us to remain at home during various lockdowns and it was deemed unwise for consumers to make frequent trips to the post office to return unwanted items. As such, many retailers extended their returns policies during this time, which demonstrated both an understanding of their customers difficulties, as well as a responsible attitude towards the severity of the pandemic.

In order to entice customers and demonstrate their dedication to CX, retailers must rethink their online store strategy. Apps that provide virtual or augmented reality sizing, ‘try before you buy’, clothing loan schemes or other innovative approaches are much more likely to gain the trust of their customers. This can then lead to higher customer lifetime values (CLVs), the holy grail of customer loyalty.

For the cautious consumer in particular, loyalty can also be gained by personalising the customer experience. For example, offering customised, sustainable shopping recommendations on a brand’s website will help to illustrate commitment to both CX, as well as consumer values.

Focus on sustainability

With various lockdowns allowing shoppers time to stop, reflect, and realise the extent of their wasteful shopping habits, many are now striving to make a change. In fact, 54% of adults believe it’s now more important to reduce their own carbon footprint since before COVID-19. As such, significantly more consumers are moving away from purchasing unsustainable products, and instead prioritising companies that offer eco-friendly goods.

One area of the retail industry that is leading the way by offering increasingly sustainable choices is fashion retail. Shoppers, especially GenZers, are voting with their money – rather than buying on a whim. This influential group of consumers wants to support brands that align with their values and as such, is spurring the momentum to move away from fast fashion and instead investing in longer-lasting clothing items.

This demand for more durable products is one that is likely to become prevalent across all vertices of the retail sector and data from the same survey mentioned previously revealed that more than a quarter of UK consumers intend to ‘make do and mend’ in 2022, rather than buying new items.

Shoppers are voting with their money and this influential group of consumers wants to support brands that align with their values. To meet this trend, retailers must focus not only on providing high-quality goods at the best price but also on providing a knockout customer experience. Mission-driven brands that do this, as well as adapting in other ways to truly accommodate the ‘Cautious Consumer’, will certainly reap the rewards.

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