91% consumers are likely to purchase from brands that heard their needs.
Customer priorities are changing at a rapid pace. One of the key customer trends over the last few years has been personalization and data privacy. While data privacy regulations have made it necessary for companies to be mindful of customer data privacy, there is also an increasing pressure on them by customers to deliver personalization. Further, the COVID-19 pandemic changed marketing dynamics for businesses worldwide. There are several changes in what consumers expect and how they interact with brands from the beginning of 2020 to the present day.
Merkle recently released the 2021 Consumer Experience Sentiment ReportOpens a new window on how consumers feel about their relationship with brands and the experiences that brands deliver. The study revealed a few interesting findings. Here are a few of them.
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1.People Are More Comfortable Sharing Their Data With Brands
Several brands have realized that the way forward to balance the two opposing forces of data privacy and personalization is the use of first-party data in addition to the zero-party data consumers willingly provide. However, it is to be noted that for consumers to share their personal data, they expect to receive something of value in return. So, where do consumers fall in this spectrum?
According to the study, more than half (51%) of consumers felt that businesses know too much about them. Among these, older and middle-aged consumers valued privacy over personalization. On the other hand, millennials and Generation Z consumers were willing to part with their personal information in exchange for value.
Yet consumers are more willing to give out their information for personalized experiences. In fact, 76% of the respondents would fill a short survey when they visit a website for the first time in 2021 compared to 71% last year to get a more personalized experience. This implies that customers are increasingly getting comfortable sharing their data with businesses for better experiences.
2. Online Shopping Will Continue Despite a Small Decline
The pandemic had a negative impact on a significant number of people in 2020. In fact, 51% of the respondents said the pandemic impacted them negatively, with 37% experiencing financial hardship. However, 63% felt optimistic about 2021. It was also found that after a jump in online activities last year, people are feeling more comfortable getting back to physical locations. This is especially true for activities involving in-person interactions.
Yet, despite a 10-14% decline in online activities this year, more people are buying groceries, attending a religious ceremony, and visiting a doctor online compared to 2019. Many people have realized the comfort and benefits of buying online, and brands are adjusted to offer these benefits. They have further expanded their distribution and ordering models to let shoppers buy from any device and pick up from the convenience of their vehicle.
According to the study, 48% increased spending on online shopping, 45% increased spending on food/cooking, and 33% increased spending on streaming services or subscriptions.
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4. Experience Has Become Associated With Product Quality
People often tend to associate price with the quality of a product. According to the study, half of the respondents were willing to pay more for a higher quality product. The percentage would increase after including people who are at least sometimes willing to pay more. About 70% of the respondents perceived the product as higher quality if they paid more.
Having said that, while price and quality have been pillars influencing purchase decisions for a long time, this influence seemed to diminish this year. In 2020, the previous study’s respondents said that the top aspects influencing purchase decisions were quality (41%) and price (40%). This year, it came down to 38% and 32% respectively. The top aspects affecting buying decisions this year can be included under experience: customer service, personalization, brand reputation, and brand loyalty. In fact, 62% of respondents associated high-quality products with brands that make them feel positive emotions.
Positive emotions could be divided into three specific reactions: the feeling that brands listen to their needs, resonating with personal values, and the ability to remember previous interactions. About 91% of respondents said that they were either slightly or significantly more likely to purchase from a brand that heard their needs. 85% of respondents said that brands that align with their values seemed to have better quality products. Only 36% said that the brands’ ability to remember their previous interactions and create personalized experiences was important to them.
This means that while price alone is not a significant factor in consumers’ purchase decisions. Given the plethora of options available in the market today, experience plays a far more critical role.
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Sharing Data: Is the Payoff Massive for Customers?
Compared to Merkle’s previous year’s study, people tend to be more comfortable with sharing their personal information with brands in exchange for personalized experiences. The younger generation is willing to reward brands with more engagement and longer relationships if the brands can provide these experiences. However, delivering these experiences is not easy for brands as it requires investments in technology, strategy, and creatives. Yet, the payoff is massive. With the events of 2020, tighter budgets, and more limited channels to engage consumers, anything brands can do to engage and retain customers will benefit their revenues.