Being relevant – what customers and consumers expect in 2040

Tatiana Okutina and Kristin Kain

Institutes are concerned about what society will look like in the future. Companies want predictability so they can better tailor their products and services to customer groups. Let's discuss some societal trends and technological developments, their impact on consumers and customer behavior, and how companies can use this to increase the relevance of their offerings to target groups.

We're like someone jumping out of a skyscraper, just flying past the 28th floor and saying, “Good luck, good luck, that's gone pretty well so far.”

This is how the former Chairman of the Management Board of METRO Group, a leading retail company, Hans-Joachim Körber, spoke in an earlier interview with the magazine “Cicero” about demographic change and the consequences for his group. If birth rates do not change, it is forecasted that in the year 2050 only 50 million people will still be living in Germany- with the assumption that there will be as many people in the country who are over 80 as there are inhabitants who are under the age of twenty. In his opinion, the aging of society is still significantly underestimated.

A few years ago, a European home improvement company conducted a comprehensive study of its key customer profiles. The goal was to identify the social, demographic, and psychographic portraits of each profile of customers who generate the most revenue for the company.

The results were clear: two out of four segments are consumers over the age of 60 who live without children. These customers have high expectations of service in the truest sense of the word - from the accessibility of the sales consultant, the quality of his understanding of the individual's concerns, needs and recommendations, to the quality of goods delivered and installation at home. Older consumers like to use the Internet for inspiration, information and even to purchase, but they also desire an offline experience- such as human interaction with sales consultants whether in a store or over the phone. They also tend to gain inspiration from a TV show they've watched, or by reading a printed catalog. In practice, these consumers mix online and offline channels across all touchpoints of their customer journey.

Technological developments, increasing connectivity with AI, the internet as it is- doubling processing power every two years, and the consumer's device itself will drastically change how customers are engaged and how they shop.

During COVID-19, the AI of a DIY store discovered a growing interest in cycling and, as a result, the pesky issue of storing bikes at home. This allowed the DIY brand's marketing team to create interior projects suggesting different solutions for bike storage in the home or apartment. The publications featuring these solutions were well received by consumers. As a result, the branded content led to high KPIs in terms of qualitative traffic on the company website and social media engagement.

Modern nomadism has begun: mobility, as known from car sharing, last-mile concepts or the bicycle boom, will influence how and where people work, travel and choose to spend their leisure time.

In a 2018 Values Ranking Index, nature was cited as one of the highest values. In 2020, the need for health increased with COVID. In 2022, wars highlight the need for security. The future is unpredictable and priorities change according to economic and environmental conditions. The way people deal with planning and understanding changes differs from industry to industry and from culture to culture (i.e. uncertainty avoidance).

How do companies use technological opportunities to learn about the needs of their customers and consumers and adapt their offerings accordingly?

Every marketer is familiar with the AIDA model, proposed by Elias St. Elmo Lewis in 1898. This model shows how to write efficient messages along the customer journey, from awareness about the company's product or service to purchase intent. It is indeed still an efficient model, but with one important aspect: nowadays, everyone sees so much content every day, whether they like it or not, that it is a real challenge to identify and meet consumers' wants and needs.

According to a report published by AOL and Nielsen a few years ago, 27 million pieces of content are shared worldwide every day. Today, that number is certainly even higher. On average, a person receives 10,000 messages every day! How much will one notice in this mess? Five hundred messages? Fewer? And how many of them will be remembered? In addition, almost half of brand messages are not received because they are not meaningful to the consumer. At the same time, 66% of respondents say they need more meaningful customer journeys. (*Havas Group, Meaningful Brands Report 2021).

For this reason, marketers should pay close attention to the relevance of the content they publish. Below are examples of how AI was used to improve the relevance and efficiency of communications from a leading French home improvement retailer.

The challenge for the brand was to appear and be considered as a potential point of purchase in the formative stages of a home project. Therefore, needs and questions that a person asks at the beginning of their project were explored.  

This funnel model represents the main stages of the inspiration journey for home projects, featuring the most important needs at each stage and the most important touchpoints at each stage of the journey. It also identified the most common sources of inspiration - whether it's a color, a design, a place itself, a decorating material or something else.

A comprehensive competitive benchmark was finally conducted with the development of a communication and media strategy as well as communication scenarios that fit into each of the key inspiration customer journeys. This approach increased social media and website engagement rates and boosted quality web traffic with an improvement in ROI for each piece of content produced.

Another case of effective use of technology is a new type of commercial live streaming. During COVID-19, live streaming was a growing trend in social media. However, it delivered weak results because it ended up resembling a webinar rather than a true sales consultation.

In video live streaming, the customer talks to the salesperson in a real store via the website without having to provide their phone number. The consultant answers the customer's questions, shows them different models of the products, and can even help them complete the purchase online. By the way, this kind of interaction is possible at any touchpoint of the customer journey - SM post, banner, email, QR on POSM or product. In this way, live streaming is a relevant interaction for the consumer and for the company: one-to-one, focused on the true needs of the customer, with a way to measure the quality of the results.

The examples show how to transform from mass communication to relevant customer journeys, how companies can provide meaningful experiences for customers and achieve tangible results for themselves.

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