The world of retail is in a constant state of flux. With all that has happened in the world in the last few years – pandemics, climate crises, new technologies – it’s no wonder consumers’ expectations have dramatically shifted.
According to a new trend report from Inside Retail and Slyp called The Rise of Gen ‘Re’, these global influences have given birth to a new wave of Australian consumers redefining the entire customer experience.
Here are some insights from consumers and a number of Australia’s leading retailers on everything Gen ‘Re’. Who they are, what they want, and how retailers must adapt to win their hearts and wallets.
Who is Gen ‘Re’?
Gen ‘Re’ is a new wave of hyper-conscious consumers characterised not by age, gender or socioeconomic status, but by the redefinition of their values and behaviours as consumers. The rise of Gen ‘Re’ has forced retailers to reconsider and adapt their strategies when it comes to areas such as sustainability, in-store experiences, omnichannel, and loyalty/rewards.
In an era where retailers’ focus on customer-centricity is becoming equally as important as the product or service they offer; it’s never been more important to not only know your customer but ensure your brand is doing everything in its power to exceed their newly defined expectations.
Sustainability: From a ‘nice to have’ to an expectation
It’s no secret that retailers’ efforts to be environmentally sustainable have always been favoured by consumers, but to what extent? And how does that help brands gain a competitive advantage?
According to the report, 88 per cent of consumers now take into consideration a brand’s own social and environmental efforts when making purchasing decisions. Beyond, satisfying Gen ‘Re’s’ expectations, retailers who commit to sustainability will see financial benefits in the long run, with 44 per cent of consumers claiming that they would pay more for sustainable products.
However, it’s apparent that sustainability alone isn’t enough to charge customers more for a product. Your brand’s offering must also add additional value and convenience to your customers’ lives.
With 68 per cent of consumers expecting brands to not only address the issue but act as leaders of change, Shane Lenton, CIO at Cue Clothing takes a holistic approach. “Sustainability shouldn’t be siloed to just one area of the business. It should encompass the entire supply chain from manufacturing to delivery and be ingrained in all aspects of the business.”
Providing a frictionless in-store experience
Since the birth of e-commerce, one of the principal drivers of mass adoption was that it allowed consumers to avoid the friction of an in-store purchase. However, over time it’s become apparent that the majority (79 per cent) of shoppers demand to have the ability to shop on multiple channels.
With only 57 per cent of consumers believing that brands offer sufficient multi-channel shopping, paired with the re-opening of physical stores post lockdowns, it’s no surprise there has been a significant increase in the percentage of shoppers who now prefer to shop in person.
Here’s a snapshot from the report of the percentage of shoppers who prefer to shop in-store across a number of retail categories:
- Clothing and Footwear: 57 per cent
- Groceries: 62 per cent
- Furniture: 66 per cent
With this resurgence, 74 per cent of retailers have committed to investing in in-store experiential retail in the next three years. Brands are investing in new technologies to help create a consistent, frictionless and personalised customer experience across multiple channels.
For example, Slyp Smart Receipts does this by allowing customers to pay and automatically receive itemised receipts in their banking app. For customers, this speeds up the checkout process and ensures they never lose a receipt again. For retailers, it provides valuable consumer insights to ensure a consistent, personalised experience.
“Gen ‘Re’ now expect a six-star shopping experience. This involves frictionless buying across channels, hyper-personalised content, and business practices that align with their ethics and values. The challenge for retailers is delivering on all of these in unison,” says Slyp Co-Founder & CEO, Paul Weingarth.
According to Cherie Salomon, E-commerce Business Partner at Anaconda, establishing customer convenience at the checkout is critical for retailers moving forward. “A frictionless and contactless experience is undoubtedly the future of retail. We’re seeing digital wallets surpass physical card purchases as customers increasingly demand a faster, smoother checkout experience across all channels.”
Customer loyalty is more than just points and rewards
When it comes to loyalty programs, Gen Re is at the top of the pack. According to the report, 89 per cent of Aussies participate in at least one program, with the average person being a member of five. However, for Gen ‘Re’ customer loyalty has extended beyond just collecting points and rewards. There are now two main types of loyalty:
- Functional loyalty: Like loyalty programs, in which shopper behaviour is incentivised by some form of reward.
- Emotional loyalty: Driven by the depth of engagement the customer feels with the brand.
To win the hearts of Gen ‘Re’ consumers, retailers need to find a balance of both types of loyalty. If a shopper trusts a brand, then 71 per cent will buy more, 66 per cent will make a positive recommendation and 45 per cent will post a positive online review. However, most shoppers also expect to be rewarded through loyalty programs, both online (71 per cent) and in-store (63 per cent).
Looking forward, the key to winning over Gen ‘Re’ is loyalty personalisation. When it comes to rewards programs, 76 per cent of Aussie consumers want theirs to be more personalised based on their interests and purchasing history. However, only 37 per cent of shoppers feel that the retailers they shop with actually provide them with this experience, indicating substantial opportunities for more effective strategies.
Download the full report to find out how retailers like Coles, Bunnings and Bonds are adapting their strategies to win over Gen ‘Re’.