What are the big consumer purchasing trends we can expect to materialise in 2011? A quick look back at some emerging trends in 2010 gives a good indication of where businesses should be putting focus over the next twelve months.
1. Getting More for Less – The overwhelming consumer purchasing trend that we can expect to see continue through 2011 is the hunt for ever better value. Consumers today have less purchasing power but they are certainly getting more bang for their buck. In Ireland last year the overall value of retail decreased, but the volume of purchases actually increased (pdf link). Economic times may be the driver of consumers’ hunt for value, but digital will most certainly be the facilitator. Many of the other consumer purchasing trends listed below are being driven in large part by the growing thriftiness amongst consumers.
2. Daily Deals – At this stage nearly everyone has heard about daily deal sites such as Groupon/CityDeal and LivingSocial. They exploded onto our consciousness in 2010 and given the level of interest in this phenomenon by Internet giants such as eBay, Google and Amazon we can be assured that this phenomenon is not going to disappear any time soon. Expect more local versions (BoardsDeals, Gruupy) and expansion beyond spa and restaurant deals to emerge in 2011. We can probably expect a shake-down in what is already a very cluttered sector. Retailers themselves look set to bypass the poor margins available from these sites and bring their own daily deals to customers directly through their own websites.
3. Group Purchasing - The daily deals space is sometimes called ‘group purchasing’, but in my mind this is an inaccurate description and real group purchasing has yet to mature. Strictly speaking group purchasing is where consumers group together to identify a product or service they wish to purchase and then go and negotiate with suppliers to get the best rate. TogetherWeSave is a new Irish venture that is making some headway in this space – I saved a few quid on my home heating oil with them recently. In the U.S. there are a number of underdeveloped offerings however none that have yet made a real impact anywhere.
4. Mobile Shopping - Mobile is still suffering from the disappointment around WAP back in the early years of the new millennium. However there are few today who will argue that mobile commerce has not come of age. The ubiquity of Internet-enabled smartphones means that consumers can undertake more complex tasks on physically smaller devices at a time and place that suits them. 2011 is the year to invest in mobile web and app services and in new, more efficient processes that can support the expectations of mobile customers.
5. Tablet Computing – It is hard to believe that it was only in April 2010 that Apple released the iPad. 3 million iPads were sold in the first 80 days, highlighting not only the level of consumer passion for any Apple product but also the fact that Apple are onto something. Tablet PCs have been around for years, but Apple brought a level of design and usability that marks a step-change in both home and business computing. Media consumption will increase as iPad penetration grows (based on a sample of one household) and so too will consumer purchases. Unfortunately some e-commerce websites just don’t work on the iPad, placing the onus on merchants to ensure that they are fully optimised for the range of devices consumers are using. Check out the iPad’s main rival the Samsung GALAXY Tab and expect a new version of the iPad as soon as April 2011.
6. Digital Content – On December 27 last Jeff Bezos announced that the third generation Kindle e-book reader replaced Harry Potter and the Deathly Hollows as the best-selling product in Amazon’s history. Be it books, music, movies or games; consumers are migrating from purchasing physical content products to digital. Watch out Easons, HMV, XtraVision and Gamestop – your existing business models are quickly becoming obsolete. Is it already too late to adapt? 2010 was the year when ChartBusters closed its doors for the last time. Who will be next? No conversation about digital content would be complete without mentioning the newsprint industry. As circulation continued to decline in 2010 the major titles started to see some light as digital revenues increased.
7. F-Commerce – Since Facebook is now bigger than Google and is the effective gateway to the web for millions of consumers AND it has proven to be a place where consumers are happy to spend money, it makes absolute sense for merchants to make their products and services available through the Facebook platform. In 2010 major brands such as Delta, 1800 Flowers and JCPenny added shopping carts to their Facebook pages. The level of integration with Facebook is still relatively light, but watch in 2011 as investment in this space by both merchants and Facebook is set to increase greatly.
8. Social Shopping – We’ve always enjoyed shopping with friends, but thanks to the mass adoption of social networks, in particular Facebook, we can now actually shop online with our friends. TripAdvisor’s deep integration with Facebook earlier this year is a great example of how to crowd-source while shopping. Cloud Shopper is a new service that enables you to ask your Facebook friends to review products you are interested in purchasing. Expect to see more of them and similar services emerge in 2011.
9. Subscription Shopping – In October this year I met Andrew Draper of Manpacks.com, a website that enables customers subscribe to automatically have a new set of underwear delivered to them on a quarterly basis. Sounds crazy right? Well no actually as the model is working quite nicely for the company. They bring both convenience and value to consumers and they generate recurring income which means that the business run more comfortably. JewelMint is a celebrity-endorsed jewelry subscription service that raised $15 million in funding in 2010. You can be sure that new verticles will emerge in 2011.
10. Multi-Channel – In the past many retailers have developed separate strategies and propositions for online customers. Increasingly however they have begun to realise that customers do not actually operate with a single-channel mindset. They expect to be able to easily transition between web, phone and outlet. And now mobile is most definitely in the mix. Customers want to research online and pick up in store or order by phone. They want to try on in store and buy online at a later time. Merchants such as JohnLewis and Argos who make it easy for customers to transition seamlessly between channels will succeed in 2011.
11. Location – If Foursquare passed you by, don’t worry as Facebook Places is where you will be making your investment in 2011. Geo-based services are coming of age and you just need to think for a few minutes about the possibilities of what you could do if you knew when your customers are near your stores. For example, you could do what Starbucks do and reward regular visitors OR follow McDonalds’ success and encourage new ones by offering exclusive offers. What about if you could integrate location services with your CRM system and invite your most loyal customers who are passing by to pop in for something special just for them? Location could facilitate some very big innovations in 2011.