The growth of the ‘Cautious Consumer’ and what retailers must do to cater to this hard-to-reach segment

By Elissa Quinby, Global Director of Retail Insights at Quantum Metric

The seismic impact of the COVID-19 pandemic on the retail industry continues to resonate two years after the crisis began. There has been a clear shift in consumer values, with many shoppers focusing more on sustainable consumption and with this, the landscape is seeing a rise in the new ‘Cautious Consumer’.

As well as prioritising ESG criteria when it comes to deciding to buy, the Cautious Consumer looks for the reassurance offered by a top class customer experience (CX). If retailers are to thrive in 2022, they must adjust to the post-COVID commerce landscape and pay attention to what this increasingly prevalent consumer wants.

Customer experience is key

Last year was a catalyst in digital acceleration, driving digital retail forward and producing massive 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 percent digital faced a significant challenge.

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

The companies that were already delivering a high-quality online customer experience have excelled and thrived since CX became so vital. The virtual footfall of the pandemic has only piled on the pressure to produce amazing 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 the experience is managed well, a supposed negative can even be turned into a positive. For example, ahead of Christmas, there were frequent issues with the supply chain with consumers feeling let down by delayed deliveries. However, if notifications that a product is going to be delayed come in on time, this can help soften the blow. Better yet, if they are accompanied by offers for alternative products and options to cancel if needed, the consumer will feel empowered to make a choice that suits them.

To entice customers and demonstrate this dedication to CX, retailers need to rethink their approach to online stores. By trying out virtual or AR sizing through apps, ‘try before you buy’, clothing loan schemes or other innovative approaches, e-commerce sites are far 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.

Listening to what cautious consumers want

Amidst various lockdowns, consumers have had time to stop, reflect and realise the extent of the damage being caused by wasteful shopping habits. This ever-increasing focus on the environment, combined with the current economic climate, means that many consumers are moving away from unsustainable products.

With growing consumer momentum to embrace circular and sustainable fashion choices, the fashion industry is leading the way by offering increasingly sustainable choices. 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. This emphasises the importance of outstanding CX for the cautious consumer in particular – personalising the customer experience by offering customised, sustainable shopping recommendations on a brand’s website will help to illustrate commitment to both CX, as well as consumer values.

This year, 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. 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 with commitments to social issues like sustainability will undoubtedly win.

 

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