In 2016, agnostic shoppers continue to be drawn to innovation around value; ideas that play with, even challenge their perception of what a good purchase means. This was clear in the consumer enthusiasm for the global buying bonanza over November’s discount days. Shoppers voted with their wallets to confirm the sustained appeal of thrifty shopping combined with the thrill of chasing a quality bargain and novelty from whichever brand could offer this to them.
The consumer quest for innovative value is also apparent in the enthusiasm for new fad, “Hatchimal” toys and the passion for subscription services. Agnostic consumers are the epitome of today’s contradictory shopper. Emboldened by a post-recessionary, hyper-informed, savvy shopping zeal, with multiple opportunities to compare prices at their disposal, they are less bothered about labels and recognised products. These consumers flit between shops and products in their search for value and novelty, presenting a challenge for brands who want to connect with them or inspire their loyalty.
Joining the November global sale bonanza
The sustained appeal of hunting for a purchase with perceived value was apparent in the consumer interest in discount November sale dates, particularly Singles Day on the 11th and Cyber Monday on the 28th of November, which disrupted and brought forward the Christmas shopping season. 73% of respondents to Euromonitor’s October 2016 Analyst Pulse Survey, offering feedback on consumption from its network of global researchers, confirmed that in their country, it is common for consumers to shop for holiday gifts during these date-specific promotions.
Many retailers extended these sales ‘days’ reflecting shopper enthusiasm. Amazon UK, for instance, stretched its Black Friday sale across several days, offering its Amazon Prime service members in major cities free rapid delivery options. Amazon UK CEO, Doug Gurr, told the Daily Mail newspaper that “In response to positive customer feedback for Black Friday deals, we are introducing The Black Friday Sale – 12 days of fantastic deals on must-have gifts and products, saving our customers millions of pounds”. Keen to deflect consumer criticism that giant retailers were swamping small businesses, he also emphasised that thousands of smaller companies were featured in the discount campaign.
Adobe Digital Insights reported that Cyber Monday reached a new record of US$3.45 billion spent online, making it the largest US online sales day in history. For the entire ‘weekend’ – taking in Black Friday and Cyber Monday – the total was US$12.81 billion, 15.2% higher than the US$11.1 billion in 2015. Cyber Monday easily overtook Black Friday’s total of US$3.34 billion in sales, according to Adobe. These totals were dwarfed by Alibaba Group’s Singles Day 2016 in China, however, this year backed by endorsements from celebrities like Katy Perry and Kobe Bryant. Singles Day generated US$17.8 billion in sales (US$17.73 billion worth of sales from Alibaba Group Holding Ltd), or more than five times the Cyber Monday results. Adobe reported that purchases from smartphones and tablets accounted for 53% of visits to retail websites on Cyber Monday and 25% of all online sales. Alibaba founder and executive chairman, Jack Ma, told reporters: “All the young people, the SMEs, the businesses… can leverage the sector [the ‘virtual economy’ on the internet], to do global buying and global selling… you can use your device, your mobile phone, to connect to this economy to do global business”.
Consumers drawn to innovation around value
EasyJet founder Sir Stelios Haji-Ioannou this year trialed a budget grocery shop in London with a strapline of “No expensive brands, just food honestly priced”. He is so convinced that UK consumers will continue to crave innovative value that he recently announced plans to expand his easyCoffee chain from three sites in the south-east of England to 200 nationwide. The chain sells a cup of coffee at less than half the price of rivals such as Starbucks and Costa.
But innovation need not be cheap to appeal as a ‘good’ purchase. The interest that young consumers (and their parents) are showing in new “Hatchimals”, interactive fluffy creatures that hatch from an egg aimed at girls and boys aged 3-12, has created a shortage on retail shelves. Not cheap at US$60, these creatures, on sale since October 2016, promise the suspense of the unexpected. A video showing the hatching and growth of one of them had over 1.3 million views by early December.
Subscription services are among the fastest-growing segments of online retail, and are a model example of the appeal of combining value with novelty in a format that appeals to agnostic shoppers. Shoppers are typically comprised of more affluent older millennial and younger Gen X urbanites, who have the disposable income to afford easy, convenient, and enjoyable shopping, but still love a good deal. While consumers who came of age in the digital era are accustomed to subscription models for online media music and news, subscribing to something in the physical world is exciting and new. Social media is a strong driver of the subscription box category as consumers learn about new sites through sponsored ads or posts shared by friends. An analysis from Hitwise, published in spring 2016, found that visits to top subscription box sites grew by nearly 3,000% in the US over the past three years. Several popular sites operate in multiple countries including Loot Crate: “A monthly mystery crate for pop culture fans filled with incredible and exclusive items and apparel from your favorite tv shows, movies, games, and more!”
Being disloyal to brands can pay
In the UK, as supermarkets have cut the value of loyalty card rewards, some savvy shoppers have been fooling companies into thinking they’ve taken their custom elsewhere in order to be offered coupons and other discount deals. An April 2016 survey for The Mail on Sunday newspaper revealed that one in four shoppers now employ this strategy. “Loyalty cards are a marketing tool to make you spend more – and customers are wising up” Kalpana Fitzpatrick, financial journalist and founder of Mummy Money Matters, was reported as saying. Meanwhile, appropriately targeted location-triggered deals brought to the smartphones of nearby consumers are also being increasingly utilised to alert shoppers to value on offer in nearby stores and restaurants, and further wean them off their usual retail and product choices.