3 Principles Will Drive Consumers
Consumers are passionate about the food they eat, and their appetites are creating shifts in the marketplace. Viewpoints and products that were once outliers have gone mainstream. Consumers now view food – in particular, food with benefits – as a key to good health. They’re embracing free-from segments, fresher food, and greater transparency from food brands and retailers. The old-market-structure of affluence, advertising and scale is giving way to three driving principles of trust, influence and personalization.
A Brand is Simply Trust
A brand, as Steve Jobs said, is simply trust. As Gen Z and Millennials press big brands for more information and accountability about food sourcing, production and labeling, levels of trust have shifted. In the past five years, trust has waned in large food corporations and brands. In the western markets surveyed, more than 50 percent of consumers had little or no confidence in large corporations and brands. This loss of confidence will be a principal challenge for brands in the future. Erosion of trust is not inevitable, yet building and maintaining trust becomes of paramount importance for brands and retailers.
On the one hand, CPG companies and retailers have leveraged “free-from” brands to build trust. Free-from food, or food made with the goal of transparency, has grown significantly in recent years. Transparency around ingredients (both included and excluded in food products) inspires trust in customers for food brands.
On the other hand, food safety concerns reported in the media are amplified through social media and erode trust in big companies and entire industries. In 2012, public outrage was ignited by “pink slime,” a lean, finely textured beef found in most ground beef products. When McDonald’s and many major grocery chains bowed to pressure and vowed to stop using it, sales plummeted, and the supply industry collapsed. The same consumer pressure has been seen with cage-free eggs, animal antibiotics and GMOs.
The Internet is the True Catalyst of Influence
Just as some consumers have more affluence than others, some have more influence. Jeff Bezos, the founder and CEO of Amazon, once said: “If you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the internet, they can each tell 6,000.” The internet, especially social media and its 1000x influence factor, is a true catalyst of influence.
As a result, these consumers have strong feelings about the impact of their purchase decisions and are open to the opinions garnered through social media. The food industry is already shifting toward “open source” influencer relationships. With no commonly agreed-upon experts, everyone, or anyone with a platform, can be perceived as an expert on any given issue.
Personalization Creates Consumer Engagement
Big Data allow marketers to pinpoint attitudes, opinions, and other implicit, personality-based interests, lifestyles and values. Although Big Data can be valuable in understanding influence, they have even more value in unlocking personalization. Personalization means to design or produce something to meet someone’s individual requirements. To enable a truly personalized customer experience, mastering Big Data will play a central role for companies around the world.
Brands and retailers must adjust to the realities of this new hyper-connected, digital world. They need to go beyond adjusting marketing budgets or adding new flavors to existing unhealthy products. They must bridge the gap between the affluence-based profitability and the influence-based model by building trust with sharper value propositions, engage the influencers with transparency and authenticity, and learn to leverage Big Data to personalize customer engagements and experiences. Welcome to the world of influence, where products have purpose and stores share stories.