Consumer Sentiment and Dealing with Uncertain Times
NRF 2021, Retail’s Big Show – Chapter 1, was a recognition of the retail industry’s resilience in the face of the pandemic and its continued impact on the economy. The industry’s ability to adapt in a time of crisis showed through innovations with which retailers pivoted to serve customers and employees in new ways.
“We were unwavering in our absolute commitment to the safety of our employees, our partners, our customers, and our communities,” said Mike George, NRF Chairman and President and CEO of Qurate Group Inc., in his opening remarks.
Limiting the number of people in the facilities, arrangements to have employees work from home where possible, implementing masks and social distancing requirements, adding sanitation stations and robust cleaning protocols, changing traffic flows and operating procedures, providing special shopping hours for high-risk groups — retailers took these and many other steps to ensure the health and safety of the communities they serve and their employees. And then came the expansion of online capabilities to help consumers shop from the safety and comfort of their homes. Many retailers completed digital transformation projects in months that previously would have taken years.
As Mitch Joel of Six Pixels Group said in his talk, “Retail is going through The Great Compression with eCommerce and other digital capabilities being pushed into an accelerated mode within a span of a few months.”
Some innovations that George showcased in his opening remarks included:
- Sam’s Club’s concierge app provided contactless shopping for compromised consumers who need to buy essentials in bulk without risk. This service is now integrated with its national curbside pick-up offering;
- Lowe’s introduced curbside pick-up a year ahead of schedule; Value City Furniture created a virtual 3-D showroom;
- Target created an online reservation system for customers to check if there is a line outside their neighborhood store, and if so they could claim a spot in it before they ever leave their home;
- Gap opened a state-of-the-art distribution center two months early with integrated automation and robotics.
“These efforts, and so many more, perfectly aligned with what our customers needed and the customers responded, enabling us to set and beat many digital sales records,” George added.
Indeed, the pandemic put into motion plans for many retailers who were at different stages of digital transformation. For example, Verizon was already noticing the changes in consumers’ shopping patterns prior to the pandemic and had implemented many digital projects in response. According to Krista Bourne of Verizon, the pandemic further validated the company’s omnichannel approach as well as its personalization and digital at the core strategy. “It also showed some opportunities,” Bourne explained. “Customers were responding very well to appointment setting. At Verizon this year we have already handled 1.4 million appointments. … It also showed us some opportunities such as curbside as a fulfillment option and contactless payment. So for us, it validated a lot of things, and also exposed some areas that we could add to the roadmap and somethings that we could accelerate.”
While many of the discussions at this year’s NRF event centered around the Consumer Journey and Customer Experience, one presentation focused on Consumer Sentiment. So often we think of customers in terms of age, location, and other demographic identifiers. But consumer sentiment focuses on how a customer might be feeling in relation to events happening now. And feelings can travel across demographics in such a way that a Gen Z buyer may have the same attitude as a Baby Boomer in certain situations. Understanding consumer sentiment can help us more effectively predict outcomes when engaging with consumers.
This is especially true when we consider the past year which was shaped by fear and uncertainty, and the new shift in 2021 towards hope and a return to normalcy. In her NRF presentation WGSN’s Director of Insight, Andrea Bell revealed some current underpinnings of consumer sentiment that are shaping our behavior.
For example, one consumer sentiment discussed is time perception. With the lockdown and comings and goings of regional openings, many consumer’s sense of time became warped. There was a sense that time was standing still or simply wasn’t here anymore. The reaction to this phenomenon was to revert to the past. Hulu reported that ratings for the 80s sitcom Golden Girls soared, while vinyl album sales skyrocketed. Both are indications that consumers were feeling the past was more certain and comfortable than the present. Consumers also focused on how to pass the time, endure and stay connected to loved ones. The explosion of home baking is an indicator of this sentiment, as is the 200% year-over-year explosion of global flour sales.
The long term result of a warped sense of time perception is often manifested in social jet lag, which is defined by psychologists as the disconnect between internal, biological, and social time activities that fragments society and leads to a deeper sense of time distortion. Social jet lag was on the rise pre-pandemic and grew steadily throughout 2020. Studies show that persons suffering from social jet lag display symptoms of anxiety and depression, which can lead to heart attacks and other stress-related health issues.
In the same vein, there was a very interesting discussion about business and social responsibility by Ron Jarvis, The Home Depot, Dave Kimbell, ULTA Beauty, Kendra Clarke, sparks & honey, and Stephanie Wissink, Jefferies. In this session, the speakers discussed the evolution of the business social responsibility conversation: What once started out as a response to stakeholders is now a necessity and a competitive differentiator that has to be built into the business strategy.
What this means for enterprise brands is that when consumers’ perception of time shifts, they often revert to nostalgic activities, products, and services that remind them of better times. And in the extreme, this warped sense of time can lead to mental and physical maladies. With this in mind, brands can engage in new and better ways to offer consumers of all demographics superior shopping experiences both online and in brick-and-mortar stores. They can also better predict what consumers will purchase and adjust inventory levels accordingly. Importantly, they must better understand what a consumer wants in-the-moment they are shopping and provide a relevant and unique offer to that consumer. In addition to protecting margins and enhancing revenue lift, brands who leverage predictive engagement strategies will instill a sense of certainty during uncertain times. And who doesn’t need that?