Published on the 16/09/2020 | Written by Heather Wright

Forrester’s view of the new consumer buying era…

If you’re in a consumer facing business, listen up: You’re entering the most frenzied phase of innovation you’ve ever been in, and consumers won’t be letting you rest anytime soon.

That’s the key takeaway from a new Forrester report, Vast, Fast and Relentless: Consumer Buying Enters a New Era, which claims customers no longer need to trade off price, convenience and emotional experience when making buying decisions – they want it all, and they want it now, and that’s forcing companies into the ‘most frenzied’ phase of innovation.

Of course, it’s no big surprise: Change and innovation have been the name of the game for several years now, and the Covid-19 pandemic has just accelerated that, forcing e-commerce and new ways of engaging onto everyone, ready or not.

“If the pandemic taught us anything, it’s that sometimes even large capital expenses carefully invested in over the years need to be re-evaluated.”

But the report notes that the future isn’t a shift from traditional to digital, or an abandonment of self-service in favour of delivery – it’s all of the above.

As empowered consumers increasingly demand both comfort and innovation along with more of everything and better experiences of every kind, brands will need to prioritise convenience and personalised experiences, while ensuring they clearly spell out their own values and make privacy, security and data ethics a core tenet of their corporate social responsibility efforts.

The report highlights four forces which Forrester says are shaping B2C buying:

Marketplaces and brands collide – with marketplaces losing share to brands. While lockdowns have seen consumer indifference to marketplaces drop significantly, Forrester says it’s brands, not marketplaces, will be the real winners in the next decade, flipping the trend seen in the past 10 years where companies such as Amazon and Alibaba have grabbed consumer interest.

But it’s not all going the way of brands, with Forrester noting that marketplaces will still displace many brands – particularly those competing mainly on price.

“Just as online travel aggregators displaced travel agents 20 years ago, marketplaces will displace traditional retail destinations like undifferentiated grocers or low-price department stores,” the report notes.

“Brands will own more of their destiny if they sell directly to consumers and prohibit marketplaces and other distributor from discounting their goods.”

It notes the examples of Disney, which withdrew distribution from media platforms like Netflix to create its own Disney+, and Nike, which has pulled its products from marketplaces.

“[They] understand they must be in control of their products to build experiences that create loyal customers.”

But – and there’s always a but – in order to thrive in this way, brands will need strong websites, digital marketing prowess, customer data and insights.

Experience, not marketing, will drive demand. It’s time to reinvent the buyer journey. Customers want to test products before fully committing, something Forrester says emphasises the use, ask and engagement pieces of the buying model and retention is displacing acquisition as the main revenue driver.

While rentals and subscriptions have enabled this for years, the model is spreading across categories, with the likes of Spotify and Stitch Fix using innovative pricing and distribution models aided by the fluidity of digital.

Values, specifically privacy, will influence purchase decisions. A commitment to data privacy and data ethics, transparency about products, giving back to the local community, climate change, gender and racial equality and LGBTQ inclusiveness – welcome to the world of the increasingly socially-conscious consumer. Twenty-one percent of the US online adults surveyed for the report say they always research a company’s position on corporate social responsibility before buying.

Traditional business models become extinct. Traditional commerce practices are ‘untenable for long-term growth’, Forrester says. The new opportunities increasingly lie in expanded ecosystems, working with non-competitive, but adjacent, companies. Case in point: Amazon’s Haven Healthcare joint venture with JP Morgan and Warren Buffett’s Berkshire Hathaway, established two years ago to pursue ‘common-sense fixes as well as innovative approaches to address issues like making primary care easier to access, insurance benefits simpler to understand and easier to use and prescription drugs more affordable’.

“These partnerships offer incremental value by expanding the addressable market, providing net new distribution opportunities and creating opportunities to develop new products and service.”

New channels, too, will be critical, the report says, noting augmented and virtual reality, assistants, voice and shoppable video as newer options.

Companies will need to discard orthodoxies around pricing, distribution, promotions and events, says Sucharita Kodali, Forrester VP and principal analyst.

“Companies that survive by 2030 will have new products and solutions that constantly adjust to fickle and changing consumers. These transitions are painful because firms have a lot invested in their current go-to-market approaches,” he says.

“If the pandemic taught us anything, it’s that sometimes even large capital expenses carefully invested in over the years need to be re-evaluated.”