Transcript:
Peter Crosby:
Welcome to Unpacking the Digital Shelf, where we explore brand manufacturing in the digital age.
Peter Crosby:
Hey, everyone. Peter Crosby here from the Digital Shelf Institute. For eight years, Cara Wood, Salsify's head of brand journalism, has surveyed consumers across a growing list of countries to identify shifting trends of consumer behavior on the digital shelf. 2022 was a year of shifting from pandemic to inflation and recessionary fears. The result of the latest survey are now in, and Cara joined Lauren Livak and me to lay out the chief takeaways and what steps brands might take to drive discovery, conversion, and loyalty based on how consumers are shopping today.
So, Cara Wood, thank you so much for coming back on the podcast today to share some of your new insights. This is the eighth consumer research report that you have authored while at your time at Salsify. And we knew it was going to be an exciting year. There's just been so much happening. The period that we're coming out of to the new period we're going into of uncertainty and change and all those things that I know we were all really looking forward to seeing how the consumers view of shopping and digital shopping and where they get the ideas, see how it had shifted in this most recent time. And so thank you so much for coming on to chat about it.
Cara Wood:
Yeah, thanks for having me. It is an exciting year especially, we surveyed over 6,000 consumers this year, it's the most we've ever done. And we also got input from five countries, so asked folks in the US, Great Britain, Germany, France, and Australia. And this was our first year asking Australian shoppers. So, it was very exciting.
Peter Crosby:
Well, that English is entirely different, so it was a huge lift to do that. No, we are super excited about having that kind of coverage and another expansion this year and all of that input. It's really fascinating when you start to see the differences and the similarities between all those regions.
Cara Wood:
Yeah,. Well, part of it is we've had this global moment, everyone experienced the pandemic but in so many different ways.
Lauren Livak:
So, Cara, what are some of the big overall themes that came out of the research?
Cara Wood:
Yeah. Well, I think one of the big ones, and it's something we've seen people ask about, is just that online shopping has stuck. So again, coming out of the pandemic, shoppers are actually not going to rush back to stores like some folks were speculating they might. Worldwide, 54% of consumers said that they made changes to their shopping habits and that's post-pandemic. Asking them to compare what their shopping habits were like before the pandemic and now, and of that group, the vast majority, 68% actually said that now they shop more online. An additional 25% said that they buy online and they pick up in-store.
Peter Crosby:
So, we've talked a lot about how much fast innovation and investing retailers and brands made over the past really few years to create new opportunities for consumers to connect, get what they need, and then both through the digital shelf and then feeding into the physical store. So, it looks like a lot of those investments have been picked up by consumers and have started to become a habit, not just a blip. Is that how you would interpret it?
Cara Wood:
I think that's absolutely right. I mean, people really appreciated, I think the convenience, they've gotten used to it, and there's a new standard in terms of what they expect from shipping. And they're really relying on checking out all the information, having those convenient moments before they buy. So, 39% of shoppers are saying that they're looking up product information online while in the store. So, just any ways that retailers and brands can make it as convenient as possible for folks to find exactly what they want in that exact moment in time, that's what folks are looking for.
Peter Crosby:
So, that's a big flag that we wave at the DSI, which is really thinking about the digital shelf as something broader than just online retailers. And that the digital shelf extends into the in-store environment right now in the sort of ways that you're talking about where I'm checking my phone, I'm trying to validate information or check reviews. So, bringing that sort of catalog of information into in-store shopping is happening. And then you also see things like cooler screens where there's a retail ad opportunity inside of the in-store environment and so many other innovations that are being explored right now where digital plays a role. Then it really requires our audience to think about that expansive use and how their organization might need to shift to make sure they're taking advantage of those opportunities earlier using the information that they've gathered for the digital shelf direct. Does that [inaudible 00:05:19].
Cara Wood:
Yeah, I'm so happy that you brought up new screens, Peter, because one of our biggest surprises in this report was actually how much people were already using virtual reality or augmented reality experiences when they're shopping. 25% of all consumers around the world said that they shopped via those channels last year. And right away we sort of checked, is it just the youngins? But 45% of those shoppers were actually age 30 to 44, and then another 35 were 18 to 29. So, it kind of ranges, 5% were actually over the age of 60. So, it is becoming something that people are looking for new ways to experience, data going up to those new screens or using their mobile phone as a way to kind of map what a piece of furniture might look like in their home, for example.
Lauren Livak:
And that's what I was going to say, Cara, just to clarify there around AR/VR, it's not like the headsets, it's not like an Oculus. It's like how can this furniture, like you said, fit in a room? What do these glasses look like on my face? That's the kind of experience, because I think there's a lot of questioning around what AR and VR can do for the broader commerce industry, and it's more about experiencing the product if you're not in store. Is that what you found?
Cara Wood:
Yeah, that's absolutely right. That's what we found is that it's that whole range of things that could be happening on your mobile phone or you might be uploading an image of yourself or using a screen or even being in store and using one of those interactive mirrors. And folks are already familiar with doing that. Like I said, nearly half of them under 40.
Peter Crosby:
And when you look at that by country, did you see if there were any differences?
Cara Wood:
Oh, yeah. Australia had the least amount of adoption, so they were still 19% that said they had shopped that way. And then the German consumers were actually the furthest ahead, 31%. Pretty much across the board, the rest of the countries we surveyed, UK, 20% of folks said they shopped that way, in the US it was 25%, and in France it was 29%. So, you can see a little bit of variation there. Like I said, Australia has the least amount of adoption, but it's still a pretty significant portion of the population.
Peter Crosby:
Certainly when our audience thinks about targeting that 30 to 44 segment that said 45% adoption, thinking about what AR and VR for those of you... Well, none of you can see me right now, but I'm doing finger quotes around that because I think it's more of almost a lowercase AR and lowercase VR than the things that normally sort of prognosticators talk about and why aren't we there yet with the headsets and everything. The truth is that we're there in a lot of ways that make shopping more engaging and more effective for people, and investing in those areas responsibly seems like the right response.
Cara Wood:
Yeah, that's absolutely right.
Lauren Livak:
And I think from a brand perspective, I think it's important to call out with the things like click and collect or curbside pickup and AR/VR, these are all the things that consumers are looking for. So, it might be additional costs on the brand, but you're reaching consumers the way that they want to be reached. So, I think holistically looking at your business to understand where can you either test and learn or build in some of these new experiences, so it's not just the option of in-store versus online and you're really kind of creating that omnichannel experience is really important based on the data and what consumers are actually saying.
So, I just reemphasize that because the data is showcasing how consumers want to be talked to, how they want to experience things, and it's really important for brands to be able to build that into their overall plans. And so Cara, this is a global report. So, we talked about some of the trends around AR and VR, but what are you seeing around the world? Maybe let's take a clothing category for example, like if someone wants to buy a Chanel coat, perhaps, what are you seeing across countries?
Cara Wood:
So, I think one of the things to keep in mind too is we asked folks about how they were feeling with inflation and pricing rising. You mentioned clothing, one of the biggest categories that's going to see a hit or some price-conscious shopping is clothing. And in France in particular, 77% actually said that they consider buying the generic label, and 56% said that price was the reason that they would buy generic. The other 21% said when things were out of stock is why they would buy the generic label. So, brands are having to work a lot harder to sort of win mindshare. I think the other interesting thing that leaps to mind that's happening in France is that folks are shopping more eco-friendly. So, in addition to thinking about their wallets, they're also thinking about the wider world.
And 16% of French consumers said that they started shopping more eco-friendly during the pandemic itself, thinking about global impact. And so in doing that in that being a way that they shop, they're actually now looking for more information that supports those decisions. So, 46% said that the way they shop for clothes is they actually want to find out how sustainably it was made. I think folks on the call will know that clothing has a reputation, your use of plastics, the way that it's made, people are now a little bit more aware of that, and so that's information that consumers are looking for. In other really [inaudible 00:11:15].
Lauren Livak:
And Cara, really quickly about the sustainability piece. Amazon has a sustainability tag, so Amazon fashion has the ability for you to tag things like that. So, where brands can find different retailers and how they're addressing sustainability, Target has different icons, Walmart has a new program that's coming out. So, content is so important and people are going to search by sustainability, so having that included in your taxonomy, having that included in your titles and your descriptions is going to be even more critical to being able to do that.
Peter Crosby:
Yeah, that's part of winning the algorithm, I think is the brands that are able to uncover those merchandising opportunities, if you have a way of being able to find out what the updates of your attributes are from your retailer and respond to them quicker than your competitors, in that search term area, you will show up higher on the search page than somebody that has not responded to that. Even if you don't have it, you won't really be prioritized at all. So, those moments are not only sort of, "Oh my gosh, my retailer's asking me for something else," but they're in fact showing you. And I think our audience knows this, but I think redoubling the efforts to make sure you are finding ways to see and as much as you can automate that process of responding to particularly your key retailers for these merchandising opportunities is going to help you on your growth path this next year. Sorry, Cara, I interrupted you.
Cara Wood:
No, I was going to say you're absolutely right. There's some US examples that we all think of, and in France there's actually even more of a push from the government to make sure that you're surfacing this information. I know there are a few digital apps that they use in France where they can shop ethically first. And so to your point, if you're not there and you don't have the data available, you're not even showing up on the app itself. Another thing that surprised me, or not surprised me, but is a growing trend in France is the ability to actually buy secondhand clothing. And so I have started to see some brands actually offer opportunities to buy something that's been turned back in. And in France that's an even bigger trend.
Peter Crosby:
Yeah, and to me that ties not only into sustainability but into the amount of consumers, 77% say they consider buying generic label store brand for clothing, that's about value. And so is as much as it is sustainability, buying clothing secondhand is about value. And we've had a number of guests on the podcast that have talked about the need in this environment for brands that want to compete and that it makes sense for their brand. Like luxury brands, it may not make sense, but for a lot of apparel brands to have a value line that might not be your top line, it may make sense in this new environment, so that that sale doesn't go elsewhere.
Cara Wood:
Yeah. I think that's happening overall is folks are really looking for, "Does this thing I'm about to buy going to last me?" I mean, we saw it show up in a different way in Germany, just consumers spending more time researching products. So again, when we asked folks what they were doing because of rising costs, 35% of German consumers said that they spend more time researching just to know. And then 56% said that product quality had actually become more important to them, that get the value from what money you're about to spend.
Peter Crosby:
And on the digital shelf that needs to be communicated without that consumer touching that product. What are the things that give confidence in product quality in the consumer's journey and how can that come to life? And there's a number of components or as we would say sort of pixels on the product page that can help set brands up well for that. I mean, enhance content to about the manufacturer section being primary. But certainly how do we encourage reviews around product quality and that SEO capacity, I think is really important there.
Cara Wood:
Yeah. And when we ask people to just rank what matters to them on the product page, the number one thing is product description, which sounds so basic, but it's like they want to read about what is happening with the product. And then to your point, Peter, next up customer reviews, next up images of actually what you're getting the product. So, people are relying on all of that content.
Peter Crosby:
Yeah, it just seems like, I don't think with the exception of maybe the AR/VR numbers, that was kind of a surprise to me, the level at which that had reached. But I think none of this stuff on here is particularly earth shatteringly shifted, but it feels like the pressure keeps being turned up of what is important to the consumer. And probably the rise of value and product quality, so that you have things that last. To me, that sort of spotlight was always important, but is intensified this year that says that consumers are making more considered choices about the things that they buy.
Cara Wood:
Yeah, that's right. And it's funny because then I think what then ends up happening is brands are hearing this and they're thinking, "Well, how do I launch a new thing or breakthrough? How am I going to get someone to discover my new product?" So, one thing I'll just say, and again, this isn't necessarily a surprise, but people are still discovering what to buy. Again, using Germany as the example, like folks finding stuff through social media, then the shopping apps on their phones, and then actual search engines are the top three reasons. So, it's that browsing feeling and then knowing that once they find your product, you really have to show the quality because that's what they're going to be judging you against.
Peter Crosby:
And that top three, that's a different order of precedence than we've seen in prior years. For search engine engines to be number three tells us something, which we already knew, but consumers are telling us that.
Cara Wood:
I'm so glad you said that, Peter, because what's not on that list, which is also a way that we usually expect consumers to find products is Amazon or retailers that are aggregating lots and lots of product content. We're seeing things that are either personal to you on the phone, so global like a search engine, or the social media where you've got the influence of who you follow and who you trust versus a retailer who's aggregated that content, retailer showed up on the list. But just to call that out, that folks are, when they're looking for a new product, they're really casting a wide net. When we ask them about how they research, that's when a lot of the aggregate retailers came up, like an Amazon product page is going to matter to them then.
Lauren Livak:
I think it's interesting because when you think about how strong and important ratings and reviews are, I kind of look at social media as a large platform of ratings and reviews because it's real people using it day-to-day. So, it makes a ton of sense that that's a number one place that people would go, especially when they're connecting to value. In this economy, spending money, people are more frugal, so making sure they get the most value, I think using social media apps is just a new way to be able to enable that. And I think also this reemphasizes the fact that brands still need to do brand building. We had a ton of conversations on the podcast about how brand building is still incredibly important in order to be successful on any of these channels.
Cara Wood:
Yeah. No, it's true, it's true.
Peter Crosby:
What are the Brits up to? What's happening over there.
Cara Wood:
Well, I always think... I guess one of the things that I wanted to definitely highlight on this was just what's happened with grocery shopping there, in part because it's a small island country, and we asked folks sort of what had changed with them, what their expectations were around delivery. So, 41% want same day options, 56% say that it's important to know that things won't actually show up crushed. And so these are some of those, again, they're basic, but when you think about what folks have just gone through with the pandemic and now coming out of it still shopping online and still buying their groceries online, it's even more important that what shows up arrives on time and edible.
And then folks, also another thing we talked about what people are looking for about the products they shop, 30% want lots of brands to choose from, and then 25% want dietary-friendly options. So, you might think you check that box, but making sure that you do on the app that they might be shopping from, so are you showing up as dairy-free, gluten-free, are those keywords integrated into your product description, so that consumers who are looking for it feel really comfortable. And then 23% wanted locally sourced and so that's another thing that you need to make sure speaks across your product listings, especially in grocery.
Peter Crosby:
And that's where I think... Because it takes two to tango on that part, not only do brands need to have that content to be able to share, which some retailers are already asking them for. Because when you talk about dietary-friendly options, that's kind of a big potential list of attributes, keto-friendly, go through the list, Whole30, all of that kind of stuff. And so that's a bunch of different attributes that adds, it's not just are you dietary-friendly? It's are they okay for my diet? Right?
And then the other piece of that equation of course is that the glasses that they're looking at to find that out, whether it's Instacart or some other app, all of those retailers or shopping apps need to accept and ask for those attributes. And that's part of the problem is not that often, not the brands don't have the data, but that those retailers have just not set up being able to accommodate that data in their schema. And so it takes work on both sides to be able to do that, and in this case, the retailers that answer those questions sooner will gain more loyalty from their consumers.
Cara Wood:
Yeah, you're absolutely right. Well, so I mentioned at the top that we also asked Australia for the first time, so I want to make sure that I make time to talk about what's going on there. And I mean, I think we talked about it a little bit with looking for consumer reviews. So definitely folks, 71% say they don't buy a product when there's a bad review and then 70% are worried about high prices. So, just calling that out, I mean, it's a very slight differentiator, but again, the reviews and the trust and the quality is coming a little bit ahead of actually worrying about how much it's going to cost them. So, it goes back to that value being important. And then 51% say when they don't have enough product information online, that's the reason they pass on the product.
Peter Crosby:
Interesting. I'll tell my audience. You're lucky because I was going to ask Cara to actually do each one of these sections in the accent of the country, but we both decided that that was not a good idea. So, thank you. I would like to do a version with that though, Cara, at some point, if you don't mind, because we'll put it up on social media. So, let's come home, from a US perspective, what really stood out to you?
Cara Wood:
Well, I mean, one of the big things, and I feel it myself, is experiencing stock out. So, actually US consumers were experiencing the most empty shelves, 73% said that in the last three months, items weren't there. And so when you compare that to last year when only 43% of consumers were affected that way, you can really see that jump.
Peter Crosby:
And just because we're in 2023, when you say last year, we're talking about their experience in 2022 was 73% had that experience and then in 2021, 43%, I just guess [inaudible 00:24:15].
Cara Wood:
That's right. Thank you. Yeah, because we ask folks, this survey ran at the end of November, so November 2022. So, folks are talking about that window of time, thinking back to the window of time between August and November, essentially back to school shopping and maybe some holiday shopping that they're doing, preparing meals for their families. All of those moments, folks were feeling like they weren't finding everything they needed year over year. And then another thing, retailer websites actually became a lot more important when people were checking what was available.
So, 46% are using search engines, and then 45% are using retailer sites to research and compare. So, I talked about the shift from retailer websites not being as important around discovery, but they're just as important if not more important when folks are actually like, "Is the product going to be there? What is it? Let me compare where I actually want to go and buy." And that compares to the next highest, which is 23% using a mobile app to get that same information.
Peter Crosby:
And did you see anything around... We talked earlier about private label, private brands, things like that, anything around sort of US behavior?
Cara Wood:
Yeah. So, I mean 18, I talked about stock outs too, 18% of US consumers said that they will actually just buy the store brand item when the branded one isn't available. So, making sure that you know the availability of your product, if you think about they're searching on the online retailer to see if it's even there. When it's not, they're going to buy the store brand. So, it's really important to have that product availability data being sent right alongside all of the data about what your product is.
Lauren Livak:
And with a lot more people buying online, a lot of people just reorder cart, so if you're out of stock and they've deferred to another brand and that's now in your cart and you reorder it, there's even more importance on how can you get your brand discovered, so that they can then replace that item again.
Cara Wood:
Yes, exactly. You're going to fight way harder to win that new customer or when you lose them, that's right.
Peter Crosby:
So, really when I sit back and think about those themes that we've been talking about, the ongoing stickiness of shopping online, the greater importance of value in the consumer's mindset, and that part of value is do I get the product I expected? Is it a quality product? Will it last? And then other things sort of go under that, such as sustainability, et cetera, and look out for AR/VR. Did I summarize that?
Cara Wood:
Yeah, thank you. And I mean, there is so much data, I'll just throw in a plug, people can go to the Salsify website and get the full scope of it. It's salsify.com/consumerresearch2023. Because there's a ton of nuggets in there. But you're absolutely right, Peter, I mean, those are the highlights.
Peter Crosby:
And will they be able to get the country by country data as well there?
Cara Wood:
Yes, so we actually have global data and then we have an interactive report. Folks who have seen our last year, it does the same thing where you can toggle back and forth and sort of see what matters on each product page, country by country.
Peter Crosby:
Well, Cara, first of all, thank you for eight years of soldiering this survey and seeing it grow from... I don't even remember what year one was like, but it definitely was only in the US.
Cara Wood:
Yeah, it was only in the US and I think we asked about a thousand folks. So, it's really exciting to see it expand around the world.
Peter Crosby:
Well, thank you for putting the effort in and for bringing these insights to us. And again, that's salsify.com/consumerresearch2023. Thank you so much for coming on.
Cara Wood:
Yeah. My pleasure. Thank you.
Peter Crosby:
Thanks again to Cara for sharing her research. To dig in further, go to salsify.com/consumerresearch2023. While you're tooling around the interwebs, go on over to digitalshelfinstitute.org and click the member button to keep getting connected with all the latest research that help you shape your strategies. Thanks for being part of our community.
