Using qualitative and strategic thinking supported by experts and cultural navigators, our Communities reports build deeper, meaningful profiles of the future consumers your brand needs to engage with.
As the retail landscape evolves it's important to track how consumer mindsets are shifting, which is why we’ve decided to return to our Subconscious Shoppers community to examine how the path to purchase had changed for consumers amid the rise of voice technology, and with it, Subconscious Commerce.
Using digital ethnography, we’ve mapped this behavioural shift against macrotrends such as Storefront Salvation, Immaterial Fashion and Programmable Realities to discover the evolution of a new fully digitally empowered community: The Digital Architects.
In our cluttered world where digital pollution is now the norm, a new generation of consumers are coming to the fore to redefine and reshape the retail category. The Digital Architects are highly educated, technology-empowered consumers who use a variety of tools, channels and platforms to build a digital eco-system that cuts through the virtual noise.
‘People spend their money where they spend their time, and more and more people are spending their time in digital eco-systems,’ says David Uy, co-founder and CEO of BLMP Licensing Marketplace. Digital Architects are self-curating a virtual environment where shopping is as convenient or as meaningful as they need it to be.
People spend their money where they spend their time, and more and more people are spending their time in digital eco-systems
Digital Architects are incredibly digitally articulate consumers. Going beyond digital natives, they are technology masters. Often the first to learn about new technologies and smart systems, they’re aware of the different tools, platforms and channels that are available to them. They are the generation coming to the fore after a significant global push to invest in STEM subjects at school. They grew up intuitively adopting gestural design and navigating multiple interfaces for technology.
Being online and connected is second nature to Digital Architects. They have a precarious relationship with brands that access their data and privacy. Kayla Curry, a 19-year-old TikTok user, jokes in one of her videos: ‘Apparently, TikTok is owned by a Chinese company that data-mines user information and sells it to the Chinese government… Yikes. But honestly it’s a small price to pay because this app is free and therapy is not.’
88% of UK Generation Z say they would prefer brand experiences delivered by blending digital and physical channels
Digital Architects are also driving the use of mixed reality (MR), particularly in retail. With a recent study by Retail Perceptions showing that 71% of people would shop at a retailer more often if it offered Augmented Reality solutions, consumer hunger already exists. According to YouGov, 88% of UK Generation Z say they would prefer brand experiences delivered by blending digital and physical channels. Brands that stand out in this area include adidas, which uses mixed reality to blur the line between the physical and digital by letting customers integrate personal football data into EA Sports FIFA Mobile.
Digital Architects are constantly evolving and building their own digital eco-systems. Their experiences allow them to understand and manipulate algorithms for their own purposes, curating from different feeds to make exactly what they are looking for. ‘We are living in an age of DIY and the rise of being able to create your own platform,’ says Thidarat Kaha, a Depop user who sells about £6,000 ($7,340, €6,725) of clothes a month to her 44,000 followers.
They’re likely to have a number of Finstas (fake Instagram accounts) to curate different feeds and interests. Using the Discovery section of Instagram has fuelled new opportunities for shopping. Some 60% of US Generation Z shoppers use the platform to discover new brands, while 73% want brands to connect with them about new products and promotions through Instagram (sources: Composed, Piper Jaffray Investments 2019).
We are living in an age of DIY and the rise of being able to create your own platform
Personal curation and expert recommendations are more important than ever as Digital Architects build their virtual eco-system with brands, channels and platforms they know they can trust. Instagram continues to be entrenched as a source of inspiration for many; recent Instagram-propelled items include the Saks Potts winter coat and the Bottega Veneta pouch.
A shifting retail category leads to the rise of immaterial retailers in a new consumer-driven virtual world.
The Fall of Bricks and Mortar
Digitally native consumer audiences have been changing the retail landscape significantly in the past few years. Technology-empowered Millennial and Generation Z consumers have fuelled an unprecedented disruption to bricks-and-mortar stores, forcing them to adapt or fail as the rise of mobile and e-commerce triumphs. In the US, for example, 79% of smartphone users have made a purchase online using their mobile device in the past six months (source: Outerbox, 2019).
The current global Covid-19 pandemic has hit physical store sales as consumers flock to online retailers and delivery models to access goods and products. The relevance of having a digital marketplace has never been more important. ‘Retailers small and large are recognising that, by switching to mostly digital channels, they are expediting new products and services that engage consumers from the comfort of their own homes,’ says Rachael Stott, futures analyst at The Future Laboratory.
As consumers embrace new channels and platforms for shopping, their relationship with retail has evolved in a landscape of diminishing incomes, wealth inequality and new generations facing an urgent climate crisis. Buying products suddenly requires more thought, more research and more mindfulness.
Empowered by access to information, new marketplaces, convenient channels and brands competing for their attention, consumers completely rule the retail category. Consumer-driven retail is not just about shopping and the retail journey, it also includes opportunities for entertainment, wellbeing, connection and consideration. In this new landscape, consumers are looking at products and asking: ‘What is the benefit to me and to the world if I make this purchase?’
As the digital and physical worlds blend further into a new Programmable Reality, ownership of digital objects has increased in desire and value while ownership of physical objects has decreased in value. As Jennifer Hyman, co-founder and CEO of Rent the Runway, claimed at Bloomberg’s The Year Ahead: Luxury, ‘the pride of ownership is dead’.
Brands are rapidly realising the need to invest in the digital space, understanding the value of the virtual marketplace in facilitating physical purchases. As the immediate impact of the global Covid-19 lockdown on retail proves, immaterial retailers will be those that weather all incoming storms. ‘In the future, bricks-and-mortar stores will only exist if they are technologically advanced with the latest in-store innovations and a fully integrated e-commerce back end,’ says Markus Eichinger, executive vice-president of group strategy at Wirecard.
In the future, bricks-and-mortar stores will only exist if they are technologically advanced
The Consumer Journey
As the retail category adapts for new digital journeys, we’ve mapped how they have evolved. It’s clear that Digital Architects are the makers of their own path.
New Product Discovery
When it comes to the discovery stage, traditionally consumers have been driven by convenience-led product offerings. As the product landscape has become saturated with copycat products and direct-to-consumer (DTC) challenger brands, Digital Architects are eschewing convenience for curation.
In response, retailers are launching tools like Thingtesting, a community-driven approach to product discovery, promising no ads and powered by bite-sized peer reviews. ‘I’ve realised that there is a new internet-born generation of brands emerging, and they grow in a different way than their predecessors,’ says founder Jenny Gyllander.
Apps that help you find the clothing or items that influencers have posted in their Instagram photos are also popular with Digital Architects, such as the LikeToKnow.it app used by fashion influencers like Sophie Milner and Gemma Talbot.
Virtual Store Experience
When it comes to the experience stage, Digital Architects ultimately seek meaningful interactions in the online marketplaces they visit. They want these to counter the sanitised and often banal user experiences of navigating platforms like Amazon or Alibaba. Although these offer convenience, the shopping experience is neither easy nor interesting.
Brands that have invested in comprehensive user research to understand the consumer experience on their website or other online platforms are elevating digital offerings to set themselves apart. Obsess is an experiential e-commerce site that aims to transform the interface of online shopping away from traditional grid structures to make it more social and interactive using virtual reality.
In China, e-commerce giant JD.com teamed up with a local record label to host a virtual clubbing experience. In a bid to make digital experiences meaningful and which truly push the boundaries of the phygital offering, the team worked with alcohol brands including Rémy Martin and Budweiser to deliver drinks to self-isolating customers during the Covid-19 lockdown.
Consumers are mobile, and the mobile experience is worse than the desktop experience for online shopping. Shoppers are getting used to more visual, interactive experiences
Mobile is a key component of Digital Architects’ virtual shopping experiences. But in its current form, it continues to lack meaning and offers a significantly worse experience than a desktop platform. Neha Singh, founder and CEO of Obsess, elaborates: ‘First of all, consumers are mobile, and the mobile experience is worse than the desktop experience for online shopping. Shoppers are getting used to more visual, interactive experiences through Instagram – where discovery is happening – and Snapchat, where millions of people are using augmented reality (AR) filters daily.’
The Payment Moment
The payment moment of the consumer journey is typically where the retail fantasy is broken. It is a functional, grounding moment that – while increasingly reliant on digital payment methods – is least exciting and often clunky. Digital Architects expect this moment to be perfect and instant to avoid disrupting the thrill and fantasy of the purchase.
Although branded mobile payment options like Apple Pay, Google Pay and PayPal are rife, nearly a third of Generation Z have already used cryptocurrency for purchases, or would do so in the next two years, according to PaySafe.
New modes of payment could revolutionise this part of the consumer journey for Digital Architects through new experiences that do not disrupt the purchasing flow. London-based start-up Curve is leading this shift, having successfully developed the first ever AR payment technology that allows consumers to pay at the till without getting up from their armchair as long as they can see the POS terminal.
Amid the rise of logistical mega-platforms like Amazon, consumers now expect brands to have a post-purchase presence. ‘The whole delivery process in the retail environment has changed because technology now makes it so easy with the click of a button. In some cases, they want to order it and have it within an hour,’ says Joseph Bobko, vice-president of transportation at Boxed.
Spotting an opportunity to engage consumers on sustainable delivery, Lumi ID uses QR codes to simplify eco-logistics. The service not only enables brands to be transparent about the sustainability of their delivery service, but also lets consumers use AR technology to engage with Lumi ID to ask questions, and receive accurate information about packaging specifications, certifications and localised recycling options.
Future Consumer Typologies
New consumer profiles highlight the varied shopper types and consumer behaviour in this community.
These consumers are ultimately driven by delight. They seek surprise and newness, and have curated their feeds to help facilitate the digital adventure playground. They want to feel like they’re the first to discover something new.
As Neha Singh of Obsess explains: ‘We’re doing that with specific technologies, but really it’s about moving past online shopping as a catalogue of products to make it a guided experience and an exploration process like you have in real life. That stronger connection with the consumer is going to be very important.’
Digital Window Shoppers
Serendipity Programmers are open to new brands, new products as well as new channels and platforms. They can find themselves getting lost in long periods of digital window shopping and will happily scroll through curated lists that go beyond the traditional categories like ‘new collection’ or ‘party wear’. They want to explore feelings, moods and identities, and be drawn in with sensationalised hooks such as ‘revenge dress for break-ups’ or ‘workout gear for your zodiac sign’.
Their short attention spans are easily distracted so retail offerings should continue to excite and delight throughout the journey. The unexpected moment of play will continue to draw them in. ‘If you think of online shopping today, every website has a grid-based interface with thumbnails on a plain white background that you scroll through. Although that’s good for searching and finding specific things with a filter, it’s not great for discovery,’ says Singh.
Fashion blog Man Repeller launched the gamification-powered e-commerce site where consumers can choose to "Play" and explore a sensorial digital playground with shoppable products. Welcome Back is an exciting new finite 2 minute digital store that changes every time you log in with a new shopping experience every time.
Strategic Opportunity: Virtual Window Displays
These consumers are easily distracted, so brands must engage with them by creating exciting digital window displays that can draw them in. They want to go on digital adventures, so exploring new virtual formats that are perfect for storytelling on products is going to resonate.
Neo-couponers shop from a functional angle. They ultimately seek the best – the best products, the best experiences and the best value. They want to feel like they are winning or beating the system by being able to find quality products and experiences, at the best prices and as efficiently as possible. This consumer type is highly informed.
New beauty tool Mira will cater for Neo-couponers interested in skincare. With a global skincare community behind it, the platform is presented as a search engine. Users simply search for types of products they want but also user reviews aggregated from different retail platforms like Ulta, Sephora and Nordstrom.
Black Belt Shoppers
Neo-couponers have done their homework on the products they seek. They’re likely to read all the reviews and ask their friends about their experiences with different brands and products before trying to find the best price. They know what they’re looking for in granular detail, including different platforms for purchase, different loyalty benefits from purchases and alternative product options.
They often stick to finding the best value deals for the brands that they love and have been following for a long time. It’s difficult to get Neo-couponers to explore new brands and new products that they are unfamiliar with as they do not want to risk a bad purchase. They avoid unfamiliar Instagram brands and DTC platforms; they don’t want to risk receiving low-quality goods or paying more for something only to discover that it was cheaper on another platform. These consumers do not like losing the retail battle and are unlikely to come back to platforms or brands that do not help them meet their best value criteria.
Online fashion marketplace Farfetch is using BEAT, a new digital-first approach to drops to build trust and loyalty with consumers. Not only will new products by trusted brand partners be released on the app, but exclusive products and cult pieces will also be sold exclusively.
Strategic Opportunity: Culture-driven Gamification
The key foundation of this behaviour is a desire to achieve a feeling of mastery and get the best deal. Gamification through hype culture, building authentic and organic cult followings and using drop culture to gain exclusivity can be an innovative way to keep Neo-couponers engaged with brands.
As Brand BFFs, these consumers seek to build a deep and meaningful relationship with brands through tailored, hyper-personal experiences. They want to feel special and be rewarded for their loyalty through every step of the journey. They enjoy personalised surprises and touches throughout the digital consumer experience that allow them to connect with the brand beyond a transaction.
According to AI marketing expert Emarsys, almost half (47%) of UK consumers are happy with brands using machine learning instead of humans to personalise marketing experiences, if it improves the offers and recommendations they receive.
This consumer type wants to feel like the only customers that matter to the brand they are engaging with, especially as our perception of what a brand is evolves. ‘Brands are no longer static. They are living, breathing. Kinetic,’ says David Lee, chief creative officer at Squarespace. Brand BFFs want to be rewarded for their engagement and connection with these living, breathing entities, and seek demonstrable evidence that the brand gets them.
Brand BFFs will love the curated gift edit series by health and beauty retailer Boots' Gift Like You Get Them campaign are built using data from their loyalty scheme. Another iteration of this is Nike SNEAKRS Day. In 2019, the brand built on hype and rumours by sending Nike super-fans to a random location unlocking exclusive access to limited-edition products.
Yet, Brand BFFs prefer direct communication with brands and are not satisfied speaking to AI chatbots. They want real-time conversations on their own terms. Cementing this, Generation Z and Millennials in the US are 2.5 times more likely than Boomers to reach out to a brand’s customer service team more than 10 times a year (source: Gladly).
In response, Rooted NYC offers an SMS chat service for plant owners who are looking for plant care advice directly from its specialists. In this way, SMS services are offering brands an opportunity for more casual conversations with consumers who receive hyper-personal care.
Strategic Opportunity: One-size-does-not-fit All UX
It’s essential to uphold your brand’s digital offerings to a new standard of consumer engagement, where consumers require deeper levels of guidance and direction. As Jonathan Cherki, founder and CEO of ContentSquare, states: ‘Gone are the days of a one-size-fits-all user experience; in the future, user experience will be the new brand.’
Our strategic Lab Notes present key opportunities and guidance for retail brands to engage with this new emerging digital-first consumer community.
1. Go beyond replicating physical stores online
Move past online shopping as a catalogue of products. Your online presence should not simply recreate your physical store. Instead, explore the multitude of different journeys and pathways that different consumer audiences will take.
2. Use physical infrastructure to boost interactions
Consumers have more expectations and demands than ever with the rise of logistical megabrands. It’s key to invest in sustainable infrastructure, packaging, deliveries and post-purchase experiences that support your digital offering.
3. Offer meaningful digital experiences
Consumers want to feel special. They invest time in researching brands, products and services before making considered and meaningful choices. If the user experience fails to acknowledge their individual efforts, it will continue to present a barrier to loyalty.
4. Flout expertise and zeitgeist curation
The retail landscape is cluttered and noisy. Consumers need support and guidance to navigate myriad products and offerings. Brands will foster trust and build relationships through expertise and of-the-moment curation designed to keep shoppers coming back.
5. Connect beyond the transaction moment
In this world of living, breathing brands, consumers seek a deeper and more meaningful connection. Offering opportunities to connect with the brand beyond AI and chatbots will help to build lasting relationships.