Changing Consumer Behavior (1)
Five insights surrounding the way consumers are changing their behaviors and expectations toward brands and companies with either membership/subscription models or brand partnerships include an expectation of strong customer experience, an expectation of a more personal experience, interest in content and information in their brand decision-process, using a community-based decision-process in their buying decisions, and placing more importance on social and environmental considerations when choosing to engage with a brand.
Customer Experience More Central to Purchasing
- Customer experience, the way a consumer perceives they are being treated by a company, is a trend impacting purchasing, loyalty, and likelihood to recommend a brand to other consumers.
- A CISCO report predicts 70% of consumer purchase decisions will be based on customer experience by 2020, and 86% of consumers will be willing to pay more for a product offered by a brand providing a great customer experience.
- Dunkin Donuts and Waze is an example of a partnership that is focused on driving exceptional customer service at the local level. Targeted toward the 86% of commuters who drive to work each day, it provides the opportunity to order ahead. The partnership has been considered successful for both companies, increasing brand equity and sales, because it requires participants be Dunkin rewards members and download the Waze app. The program offers a significant customer service benefit through convenience and gives local franchise owners an opportunity to build their relationships with customers by promoting the partnership and executing well.
- Another partnership that offers customers an enhanced experience is Uber and Spotify, which offers Uber riders the opportunity to connect to Spotify while waiting for their ride and developing a playlist. The partnership benefits both Spotify and Uber by reaching a broader user base.
Personalization and Experiential Benefits Drive Consumer Choice
- Consumers are seeking more personalized engagement with brands and experiential benefits, expecting products and services tailored to their specific needs. The trend is being driven by Gen Z, and is seen across a variety of products and industries.
- A study by McKinsey found curation subscriptions, which are membership-based brands that focus on personalization by offering new items or highly personalized experiences designed to surprise their subscribers, accounted for 55% of total subscription programs. 28% of curation and access subscribers (those who sign up for a monthly fee for specific discounts or members-only perks) say a personalized experience is the most important factor driving their decision to subscribe.
- One example of a partnership that successfully offered a personalization experience to consumers is AirBnb, the room-sharing service, and Flipboard, a news aggregator that collects news and topical content shared on social media and provides as a summary in a social media format. This partnership launched "Experiences", which offers AirBnb users content tailored to their interests. Its success spawned a second partnership, "Trips", which allows AirBnb users to connect with hosts who share similar interests, and then book these experiences when traveling.
Buyers Seeking An Informational, Content-Driven Brand Experience
- With the proliferation of advertising across multiple channels, consumers have become more disengaged with traditional marketing messages and are looking for information and insights beyond a traditional selling message.
- 50% of respondents in a 2018 econsultancy survey of advertisers, marketers, media owners and agencies and senior marketers say that consumers are seeking more content compared to two years prior. Brands have responded to this greater demand for content, with respondents in the 2018 econsultancy survey noting they are increasingly offering more story-driven content in their messaging.
- Tiege-Hanley, a men's skincare subscription company, partnered with a YouTube personality, Alpha M., owner of a 750,000-follower YouTube lifestyle channel, which focuses on teaching men how to make improvements in fitness, grooming and wardrobe. In addition to this content-based partnership to promote their brand, they also created their own vlogs which engaged their potential consumer base by having followers offer input on packaging designs and advertising taglines. These content-focused strategies helped contribute to an increase of 6,000-8,000 subscribers over 6-8 months.
Consumers Seeking Community-Driven Brand Experience
- This trend involves consumers socializing their brand experiences, with companies initiating conversation among consumers, who share information and recommend products as a means of connection with the brands and other consumers.
- A 2018 Internet Trends Survey of 1000 US consumers indicates that consumers are increasingly discovering products on social media and then going on to buy them. 78% of 18-34 year-olds reported learning about a product they were interested in purchasing on Facebook, while 59% of consumers indicated they learned about a product on Instagram or Pinterest.
- Bootaybag, an underwear subscription company, invests significant time in spreading their message over Instagram. The company engages consumers by asking their opinion on topics such as what colors and styles they want to see next and their satisfaction with their purchases, sparking conversation and responding to feedback. They have grown to more than 140,000 followers on Instagram and use this platform as a primary vehicle to attract and retain subscribers.
- A partnership that reflects success in building both an individual personalized relationship with their customer and driving awareness of their products through social platforms is Levi's partnership with Pinterest. Users pin posts they like to their Pinterest profile, Levi's offers style insights tailored to users tastes and preferences, and with many potential buyers turning to Pinterest for inspiration, it is an excellent way to reach a broader user base by building on the community-focused, social interests of consumers.
Consumers Considering Social and Environmental Impact in Brand Choices
- Consumers have higher expectations that a brand's social positions, actions and messages should align with their own personal values. This trend in brand engagement is notable and has an impact on corporate financials, as 47% say they will leave a brand that doesn't meet their expectations and 17% of those will not return.
- A December 2018 Accenture survey noted 62% of total consumers want to see meaningful social, political and environmental involvement. 62% of consumers also said they would be attracted to one brand over another based on the brand's support for reducing plastics and improving the environment. 66% of consumers overall are willing to pay more for brands who demonstrate support for these social and environmental causes.
- This trend is even more pronounced among a younger generation, with 81% of millennials stating they are more likely to support brands that are involved in causes that go beyond the bottom line to show commitment to social cause and the environment.
- There are numerous subscription services focused on a model that supports sustainability and social purpose, including GreenUP Box, which offers zero-waste, eco-friendly, reusable items that will help reduce a consumer's plastic footprint.
We began by reviewing materials related to trends focusing on changes in consumer behavior and expectations towards brand partnerships or membership/subscription models. We reviewed expert consumer brand behavior and attitude trend-focused reports, such as those provided by McKinsey and Accenture, trend surveys conducted by online experts, such as econsultancy, as well as brand partnership and ecommerce and membership model case studies. These case studies highlight how trends which emerged in the trend analyses focused on consumer expectations and behaviors have impacted membership models and brand partnership strategies, showcasing how these companies have reacted to the various ways consumers are changing their behavioral engagement and expectations of brands.
We also found that, while these trends are highly applicable to companies who have developed partnerships or those who offer subscription models, these brand engagement trends among consumers are not exclusive to companies with membership models or brand partnerships. For example, while a company such as Unilever has built sustainability and social causes into their inherent business model across all brands based on consumers' desire for their brands to be committed to social causes beyond profit, numerous subscription models, such as GreenUP Box, have also succeeded by offering a sustainability-focused product that reflects the same growing consumer focus on corporate social responsibility.
The trends selected have been sourced from at least 2 respectable sources uncovered in our research, including expert trends surveys, conducted by Mckinsey and Accenture, reputable ecommerce and digital consultancies following consumer trends, and marketing experts who follow trends related to consumer and brand engagement, including marketingland and hubspot.
Examples of brands implementing these best practices were included from marketing industry-focused publications, such as Shopify and Campaigndrive, showcasing how companies with membership models or brand partnerships have implemented strategies based on these trends. The examples were selected based on being showcased as a company who has been considered successful by implementing a strategy based on the trend.