The next few months will see all those pandemic predictions about consumer behaviour put to the test.
Will subscriptions be cancelled en masse? Will retail footfall recover to normal levels? Will the trend to ‘support local’ prove just a fad? These are the questions that the industry is asking itself, and the questions that thought leadership should be addressing.
Evidence suggests that the consumer demand that has built up over the past 12 months is desperate for release. UK consumer spending rose above pre-pandemic levels in April for the first time this year but, with a staggered and inconsistent return to offices and city centres, as well as the ongoing threat of local closures and restrictions, can this momentum be maintained?
We spoke to FT Longitude’s editors for their predictions on a new phase of consumer spending: how it will differ from a year ago, and what will shape brand thinking over the months ahead.
1. The spaces between home and office
Buoyed by the promise of a return to “normalcy”, many companies are talking about the office of the future, the rise of hybrid working models, and the provisions employers must make to satisfy employees’ new wants and needs. But far fewer are talking about the impact that these shifts – each remarkable in its own right – will have on our cities, our retail spaces, and the places that exist in between home and work.
Take the shift to hybrid and flexible working. This is sure to influence how we perceive and use these in-between spaces. The rise of WFH and WFA (“work from anywhere”) means that employees no longer “go to work”, they simply work – when and how and where it suits them. As a result, we’ll see work being done in previously under-utilised spaces: hotels, co-working spaces, cafes and even museums could all be future workspaces if designed with the right functionality in mind.
For cities, the challenges and opportunities will be just as complex. Bloomberg’s Pret Index reports that as many as half of workers in London’s financial district may now be returning to the office – just not on Mondays and Fridays – with sales in their stores as much as 30% higher on Tuesdays, Wednesdays and Thursdays. The FT predicts a similar midweek bulge in the return to work.
Amid these seismic shifts, businesses – as both consumers and workers – must consider what comes next:
- What will a shift away from a 9‒5 workforce mean for the fabric of our cities?
- How can cities and retail spaces ensure they are sufficiently flexible to meet the changing expectations of a hybrid workforce?
- What impact will these shifts have on the economic, social and cultural make-up of the spaces between home and office?
We don’t yet know the answers to these questions – but thought leadership and insight-led content provide the platform from which to start – and lead – the conversation this year.
Meg Wright, senior editor
2. How will consumer spending change?
If there’s one thing that consumers have begun to appreciate more than anything else over the course of the last 12 months, it’s convenience. This is a trend that will continue to dominate consumer behaviour in the longer term. This is evident in the success of online shopping a trend that has been building for the past decade and accelerated under lockdown and with many consumers continuing to work remotely, or adopting a hybrid working approach, it is likely it will continue to thrive in the future.
Similarly, local shopping has also burgeoned. In fact, almost half (47%) of British consumers say that the high street is the heart of their community, and four in ten (42%) say they are more likely to shop locally today, compared to before the pandemic, according to Barclaycard’s monthly consumer confidence survey.
This highlights another key trend in consumer behaviour – consumers want to support brands that they perceive to have a strong purpose. From helping fight climate change to supporting local business owners and the economy of the community, consumers want to use their buying power to leave a positive (as opposed to carbon) footprint on society.
With shifting consumer needs and behaviour starting to settle, it’s become clear that businesses can benefit greatly both from producing and following thought leadership, as brands continue to research and analyse post-pandemic trends through their unique marketing lenses. Content-producing organisations must ask themselves these key questions – and be ready to act on the answers:
- Where do our consumers shop? And how do we reach them most effectively there?
- What causes do our consumers support and which values do they hold? Do we, as an organisation, promote the same values?
- Do we have the necessary data, and do we know how to use it to adapt to consumers’ needs?
Desi Kozareva, writer and editor
3. What does this mean for the consistency of brand experience for consumers?
Even before the pandemic, we were told that the future of retail – and brands – was frictionless. This was about providing a seamless experience to consumers and making our (often self-imposed) hectic lives easier.
During the course of the Covid-19 pandemic, frictionless took on a physical dimension, as we shopped, almost exclusively, from our screens. As economies open up, a hybrid model is emerging, one where the lessons – some harsher than others – of the physical/digital transition need to be absorbed quickly and acted upon. Our experience of brands in a hybrid age will strengthen or weaken levels of consumer trust. It will be informed by a blended approach to brand communication: on the one hand, the tone should be reassuringly practical; on the other, it must be alluring, as companies seek to entice us back to their places and products, including through social media.
Recent research conducted by FT Strategies explores the link between customer engagement and performance. How customer loyalty is earned and sustained during this period of (sort of) getting back to normal should be fertile ground for inquisitive brands.
Sean Kearns, editor-in-chief