Consumers are bombarded with countless choices every day, and our purchase decisions are almost always influenced by a complex web of factors—two of which are product desirability and brand desirability. For example, consider an individual deciding whether to buy a t-shirt from New Balance or shorts from Nike. Although the consumer prefers the aesthetics of the t-shirt to the shorts (i.e., they perceive the t-shirt to be more desirable than the shorts), they generally prefer the Nike brand to New Balance (i.e., they consider the shorts’ brand to be more desirable than the t-shirt’s brand). To make their decision, the consumer needs to consider how desirable they find each product and brand and integrate their assessment to select the preferred product–brand combination.

A authored by professors Geoffrey Fisher and Kaitlin Woolley explores this interplay between product and brand desirability using cursor tracking to capture this decision-making process in real time. More specifically, they indicate how cursor tracking can help marketers understand consumers’ journey of integrating their attribute desirability into brand vs. product and making choices.

Which Comes First: Brand or Product?

The authors show that consumers usually process the desirability of the product’s attributes ahead of brand attributes. To generalize their findings, the authors designed a number of choice trials across the studies, including a study with price attributes to mimic a more complex real-world context. In addition, the authors demonstrate the impact of spatial location attributes and advertisement emphasis on the timing of brand/product consideration.

Every choice we make as consumers is a balancing act shaped by our unique needs, priorities, and the ever-changing landscape of options around us. Thus, the inferences from this article have important implications for researchers. From a literature perspective, the authors highlight how cursor tracking can be a useful methodological tool to better understand consumer choices. They also demonstrate the importance of the salience of brand-based attributes to steer consumers to make brand-based choices, rather than product-based ones.

Implications for Managers

Current e-commerce analytics firms and online advertisers actively track consumers’ cursor movements, but they often only perform basic analyses with the data. The results of this research suggest that firms can make quality inferences about consumers on the basis of their prior cursor pathways. In addition:

• The findings suggest that any intervention that increases the relative time at which brand attributes are processed should encourage consumers to make more brand-based choices (e.g., displaying brand attributes more on product packaging and in advertising).
• Collecting mouse-tracking data is accessible, cheap, and scalable, and companies can integrate the tools introduced with cursor data they may already be collecting to better segment customers by identifying those who are likely to initially attend to brand-relevant features.

We had the opportunity to contact the authors to learn more about their work and gain additional insights:

Q: In the paper, you mentioned the convenience and relevance advantages of mouse cursor tracking compared with the eye-tracking method. Do you think the two methods can supplement each other? If eye tracking can be used as a supplementary method, how would you employ it to improve your studies, especially because the world is consistently moving away from cursors into touch-screen-enabled devices?

This is an interesting idea. Yes, we do think eye tracking could be a nice method to integrate with mouse cursor tracking. That data would enrich our understanding of how people look at different features, but not necessarily when they start to utilize each feature in their decisions. One thing to note regarding the cursor tracking paradigm is that it is intended to relate to physically reaching for a product. Along the lines of collecting more process tracing data, hand movements toward physical products could be another interesting data source to make these paradigms increasingly reflective of real-world environments.

Q: In the rating task of Study 1, you measured brand familiarity in addition to brand and product desirability, but there was no mention of brand familiarity and its role later. What role does brand familiarity play in your studies, if any?

In the current study, not much. We only asked about brand familiarity as a binary variable: Do you recognize the brand(yes/no)? In our main tasks, we only included products and brands that were liked or disliked (i.e., not neutral), with the intention that this would restrict our stimuli to instances where individuals had some knowledge about the feature.

Q: This research makes significant contributions to theories and managerial practices. Have you considered extending this research in the future to different contexts, such as gift purchasing, in which consumers have to consider both their own and others’ product and brand preferences and in which the decision-making journey might not be linear.

Thank you! We have not thought about extending this to gift purchasing, but we agree it would be an interesting paradigm, especially since there is some recent work utilizing mouse cursor tracking in self–other decision-making (Smith & Krajbich 2023).

Q: In all three studies conducted, the independent variables are differences in food desirability and brand desirability. In this case, does the value of the differences also have a significant impact on the decision-making process? For example, a participant may have a difference of X when it comes to burger and donut but a difference of Y when it comes to burger and burrito. Can these values also have an impact on the time and decision-making process?

We agree that these values can certainly influence decision making, and our work does not exclude this. The importance of attributes (e.g., brand vs. product) also matters. Our work finds that, in addition to these factors, the time that one first processes the attributes is yet another factor that influences decision making.

Q: In the paper, it was pointed out that consumers process desirability toward product-based attributes earlier than brand-based attributes in a choice-making situation. In this case, based on the findings from the research and apart from the spatial location of the brand, what other techniques can you suggest to marketers to ensure that brand desirability is more prominent in choice?

We think there are other marketing tools besides the spatial location of the brand that can influence when individuals process these attributes. For example, beyond spatial location, marketers could manipulate visual prominence in other ways that we didn’t test (e.g., size, color). Outside of visual salience, one additional technique that we explored in the paper relates to advertisements for brands. We find advertisements that increase the importance of branding (relative to product attributes) can result in consumers thinking about brands relatively earlier. We suggest that future research should examine additional techniques that alter attribute starting time to understand whether this would be a useful factor for marketers to include in increasing brand prominence.

Q: In the experiments, you tested participants’ choices of clothing and food items. Do you think that your research findings can be generalized to other high-ticket products as well, such as furniture and home appliances?

Perhaps. It is possible that the timing factors that we observed were fixed across contexts. However, it could also be the case that high-priced items cause consumers to process brand information earlier, as a brand can be a strong signal of quality. Our work focused on decisions that are more frequent, but we agree that it would be interesting to test the generalizability of these findings further.

Read the full article:

Fisher, Geoffrey and Kaitlin Woolley, “,” Journal of Marketing Research, 61 (1), 165–84.

References

Smith, Stephanie M. and Ian Krajbich (2023), “Predictions and Choices for Others: Some Insights into How and Why They Differ,” Journal of Experimental Psychology: General, 152 (2), 528–41.

Go to the Journal of Marketing Research

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But is this the right move for B2C and in an increasingly competitive space with so much online ‘noise’? Is relying on digital channels the best way to engage with customers in a way that builds trust and is meaningful?��

In this blog, we’ll explore those questions and see if the answer lies in a rather than a siloed approach. Read on to find out more!

Digital vs. traditional marketing: What’s the difference?

To understand both forms of marketing, it’s important to look at not only the channels but the interaction and performance. 

As you can see, there are many advantages to digital marketing compared to traditional. While the odds may seem stacked in digital marketing’s favor, the story’s not that clean-cut. 

Recent evidence suggests that a shift is underway as in August 2021 and February 2022, marketers predicted that traditional advertising spending would increase by 1.4% and 2.9%. 

Certain traditional channels are still very effective when it comes to influence and marketing. TV is one of those examples. that television ranks as the second most profitable advertising channel in the U.S behind the internet and accounts for one-fifth of total U.S. media ad revenue. In 2021, U.S. ad spending on linear television reached $66 billion. 

Radio advertising is another channel that can hold its own and ad spending worldwide is projected to reach .

The secret to great marketing is the combination of both to enhance customer experience and leverage the power of all channels.��

How can digital and traditional marketing work together?  

Customers now interact with your brand in a multitude of ways from reading a magazine to coming across a sponsored ad on Instagram. 

The secret to driving success for your brand is to create a seamless online to offline experience from one point to another using an . What this involves is integrating new channels with traditional assets. Examples include:

• Events and Account-Based Marketing – Your sales team can use in-person events to target key clients (insights garnered from your ABM research and insights). For example, you could target a CMO in a high-profile tech company by attending an event they sponsor and knowing that person is on a panel.
• Mail-outs/brochures and online discounts – Including leaflets in print media or mailing out brochures could include a discount code that drives people online to a custom landing page to claim the offer.��
• Outdoor advertising and geotargeting – Billboards and banners are great for brand awareness in specific areas. You can use geotargeting from online platforms such as social media to narrow down the locations of prospects so you can place advertising in that area to drive engagement. ��
• TV and QR codes – for driving mobile users from traditional ads to online channels. Superbowl LVI for example just used a QR code on its ad to offer people $15 in free bitcoin. This offer was then used on social media to drive engagement. QR codes can also be used in print and outdoor media to drive prospects online.��
• Print and website links – Magazines and newspapers are wise to the fact that people search online. That’s why print media include URLs as part of a page or offer to drive readers online. ASOS, for example, has a magazine that profiles products and celebrities and includes each item in a ‘Shop the ASOS magazine’ which drives traffic to a web page. ��
• In-store and apps – According to , 52 percent of shoppers used a mobile app to purchase while shopping in-store in 2020. The reason for this was either to find or redeem coupons or find sale items to purchase that could not be located in-store. For retailers, this shows the value of including a mobile experience in any in-store experience to build customer loyalty and drive purchases.��

Examples of great traditional and digital marketing 

There are lots of great examples of brands being innovative and using all touchpoints in a customer journey to drive engagement. Let’s look at a few of the most innovative. 

Adidas

Using a QR code located on the tongue of a sneaker to launch the new , Adidas drove customers to a Spotify playlist, These playlists contained music based on their current location to drive geotargeting and personalize the experience for the customer. 

This partnership with Spotify has been expanded to add QR codes to t-shirts and hoodies while the playlists are also growing. 

Chanel

A luxury brand that’s embracing digital and making it part of their in-store experience is Chanel. A new store launched in New York – – shifts the focus in retail from selling products to cultivating an immersive experience. 

On arrival at the store customers put belongings into lockers but keep mobile phones as “the only tool they would need”. Assistants then help customers set up their accounts on the Chanel app to get product information, and application tips and to save favorite products for shopping later.

The time was then spent in-store building a relationship with customers rather than pushing sales. This new approach enables a new in-store experience for customers using digital technologies.  

Walgreens 

As one of the is no stranger to innovation. With a focus on omnichannel, the brand uses a range of channels to engage with its customers.��

The launch of its new app – my Walgreens – allows customers to redeem and use coupons in-store, re-order prescriptions, get same-day delivery, 24/7 pharmacy chat and get personalized discounts based on their preferences. 

In-store, Walgreens is also looking at ways to engage customers in the store by piloting touch devices that will act as phones, scanners, and point-of-sale tools (just as Apple does in its stores). 

Conclusion

In a constantly changing consumer landscape, companies need to use every tool at their disposal to engage and convert prospects. That requires traditional and digital marketing tactics to work side by side to achieve a great customer experience and extend reach. 

The key is to work out what channels work best for your business and see if these can be enhanced by combining traditional and marketing tactics and tools. Be creative and see what you can come up with!

Optimize your traditional & digital marketing campaigns

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Each week since the onset of the pandemic, my organization has conducted studies into the intricacies of shopper behavior. Our data shows that one thing is clear: The world of shopping has undergone tremendous change during the past year with immediate, notable shifts since March. Due to the restrictions, closures and health concerns stemming from the virus, people have been forced to turn to online shopping for all essentials. 

The continued shift to e-commerce was especially prevalent during 2020’s holiday shopping season, when 71% of our ongoing study respondents said they planned to do all of their shopping online only. And online shopping preferences for essential items are projected to continue into 2021—25% of our study participants predict they will continue to order their groceries online this year.

Procuring practical basics isn’t the only thing driving purchasing behavior. Social isolation is also playing a role in how people are shopping online, and there has been a rise in “retail therapy” (after initial panic-purchasing). As people seek comfort from the online shopping environment, they have different priorities for the online shopping they are doing.

So how do you make sure you are reaching your target audiences the right way in this new shopping world, instigated by the pandemic? First you need to understand the new shopper experience and fully optimize it.

The methods to get the shopper insights you need are myriad, from qualitative and quantitative solutions, including shopper segmentation research; virtual qualitative research like online diaries; proper messaging and communication studies; and packaging design research.

Shopper Segmentation Research

Our research shows that the online shopping trend is here to stay, which means your brand’s online shopping audience has changed, too. Those consumers who used to access your products in brick and mortar stores are now looking to access online, and your overall audience is more varied with different priorities than before the pandemic. You must understand what your new shopper segments are and make sure you have the messaging in place to reach them in their preferred shopping arena.

Qualitative Diaries and Bulletin Boards

Many market researchers and consumer insights professionals are accustomed to doing in-person research to understand more about how to develop products and hone messaging. But this past year has offered the opportunity to pivot to creative research solutions, conducted online, on mobile and via other virtual methodologies. Diaries and bulletin board research allow you to get feedback directly from your new online shoppers throughout their whole customer journey, so you can improve it for them and enhance your success in an online environment.

Messaging and Communication Research

The fundamental way we communicate with each other has also been affected by COVID-19, with nearly all our interactions at some point or another becoming digitalized. Online is where you can reach your customers most effectively, so what should you be saying? Using research approaches that help you determine which messages or claims will maximize reach to your target audience in their online environment is essential.

Package Design Research

It’s worth considering modification of your product packaging for the online channel, providing a more simplified version of what might be seen in the store, with clear, bright graphics to capture attention. In order to do this successfully, while keeping true to your current brand, package design research with your consumers can give you the insights you need for this shift.

Now is not the time to be left behind. Data and insights have been solid touchpoints in an otherwise turbulent environment, giving both individuals and companies clarity on a wide variety of issues. Because shopper behavior has undergone such a drastic change, and continues to transform, successful brands will employ the right research methods to understand their audiences now and in the future. 

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It’s the most unpredictable time of the year.

Retail data intelligence firms have reported significant, continuous shifts in consumer demand and spending patterns throughout 2020. Three contributing factors that led to this instability are the global pandemic, economic downturn and social injustice. These matters have caused consumers to increase focus on their wallets as well as companies’ actionable responses to social issues. Recent consumer patterns are likely to stick around for the long haul to create a new dynamic, impacting the consumer decision-making process.

Additionally, as digital innovation has always been a constant experiment for businesses, 2020 made it essential for companies to shift a heavier share of advertising dollars to digital marketing channels and use their owned digital channels to communicate their companies’ core values to consumers demanding change.

With the holiday season fast approaching, now adds a fourth factor of variability to tracking spending patterns. E-commerce businesses should look to craft digital marketing goals to meet the changing definition of “the holiday rush.” As some marketing surveyors such as and point to possible increases in holiday sales YoY, other surveyors are predicting consistent YoY sales or compared to last year. With the conflicting predictions of information in an unprecedented year, it is somewhat impossible to know for certain what consumer demand and marketplace needs will require for the 2020 holiday season. One thing we know for certain—there will be marketplace demand and it’s still imperative to meet consumers where they are.

Below are five key e-commerce metrics that businesses should analyze to predict the upcoming holiday season more accurately.

1. Return on Investment (ROI)

, “Holiday e-commerce spending is poised to exceed $189 billion in the U.S.” E-commerce businesses should look to explore every digital channel to safely predict how they will aid in brand awareness and conversions to help calculate ROI. Businesses should consider preparing a “holiday rush playbook.” The goal of this playbook is to have a single source that compiles industry predictions for the holiday season as a way to help your business establish benchmarks. Once compilation is complete, the business should look to select the best digital channels to help drive efforts—particularly the paid digital channels.

The playbook should also define a success threshold for each channel for the holiday season. The final step should be to calculate potential ROI to mitigate investing in digital channels that do not work for your business. For example, analysts have reported that mobile has the potential to be a primary conversion channel. Among other digital channels, e-commerce businesses should consider investing in mobile ads to help with conversions during the holiday season.

2. Conversion Rate

Review industry predictions of what conversion rate success is within your specific industry during the current environment and develop a plan to meet that goal. Loyalty rewards programs and email campaigns are a way to help drive conversion and awareness around sales or discount codes, depending upon your brand voice. Barring any additional shutdowns in your region, consider a pop-up shop along with click-and-collect strategies to help increase conversion rates. This will impact both small- or large-scale businesses, as consumers tend to want products quickly. These two strategies also help diminish any possible mailing delays to customers during the holiday rush.

3. Website Traffic

After developing your marketing goals and making a plan, monitor your business website traffic. This is the overarching landscape that helps your business understand if the marketing plan in place is helping to develop brand awareness. Website traffic can delve into defining which channels are bringing in the most visitors and also help shape the narrative of what customers are doing once they get to your site. This metric also answers the following questions: What products are garnering the most interest? Is my website user-friendly? Are consumers abandoning their carts at a high rate? This information on consumer buying behavior will help significantly with retargeting efforts and optimizing email campaigns.

4. Social Sentiment

as “the measurement of the tone of social conversations, comments and mentions about your brand, product and service.” Along with the economic downturn of 2020, the rise of social injustice issues impacted businesses both large and small. Consumers have begun looking beyond social media content into the actionable plans that businesses are making toward change. Racial and social injustice perpetually evolves and sparks conversation, thus social sentiment should be a KPI that brands continue to measure during the holiday season. The conversations, comments and mentions about your business can have a direct impact on your business’ bottom line and conversions.

Consumers will likely choose brands that share common core values. According to CNBC, . Additionally, in 2018, speaking against racial injustice. Measuring social sentiment will help in establishing your brand voice and your customer base, as well as urging potential customers to become brand loyal based on alignment of core values.

5. Digital Transformation

Finally, measuring digital transformation is a review of how adaptive your business processes and operations are within the digital culture. Establishing clear goals, effectiveness and efficiency are all keys to a solid and successful digital strategy. According to the book “Building Digital Culture” by Daniel Rowles and Thomas Brown, managing customer experience, collecting and interpreting valuable insights, and a CRM system that helps build strong customer relationships all aid in effective digital culture. Digital transformation is an endless conversation rooted in innovation. Being able to quickly adjust in a fast-paced environment is now a necessity. Key measurements for success are regularly auditing your digital environment, assessing the cleanliness and depth of the data that your business is collecting and ensuring that you are using this data to build meaningful insights that will help your company excel. Moreover, audit platforms that your customers are using to access your products and services to ensure the platforms are accurate, prompt and effortless.

The next 12-18 months post-holiday season prove to be crucial and should be regularly monitored as well. As we mentioned above the dynamic to the consumer decision making process is changing at a rapid speed and it is important that brands meet customers where they are in the environment. Remember e-commerce metrics should be audited frequently for relevancy and tracking goals. Record findings after each audit to keep as a temperature check moving forward as we continue to navigate this evolving space.

Photo by Tierney courtesy of Adobe Stock.

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The marketplace is stuffed with high-calorie foods: chips, ice cream, buttered popcorn and more. Yet despite the appeal of these indulgences, many consumers want to or need to manage their weight by cutting calories. Marketers of traditionally indulgent foods face a conundrum: How do they create attractive, lower-calorie product alternatives for the many consumers interested in cutting back? Research conducted by Peggy J. Liu, assistant professor of marketing at the University of Pittsburgh, and Kelly L. Haws, professor of marketing at Vanderbilt University, tackled the question of . 

<2/3

Understanding consumers’ choices between lighter versions of indulgent foods and smaller packages of the same indulgent foods is important for the food industry. By one estimate, more than two-thirds of American consumers want to lose or manage their weight, so the interest in cutting calories is strong. 

Larger and lighter?

The authors examined how individual differences in dietary restraint—a measure of engaging in chronic dieting behaviors—predict preferences between a larger package of a lighter version of a snack, versus a smaller package of a richer version of a snack, controlling for the same number of calories in both packages.

100 calories ≠ 100 calories 

“We find that, consistently, consumers who are higher in dietary restraint prefer the larger package of a lighter, more health-conscious snack over the smaller package of a richer snack,” Liu says. In one experiment, participants made a choice between two 100-calorie snack packages: a medium, 94% fat-free popcorn and a small buttered popcorn. Participants’ dietary restraint was measured on a 1-5 scale, where 1 represents never engaging in diet-related behaviors and 5 represents always engaging in diet-related behaviors. The correlation between dietary restraint and choice of the medium, 94% fat-free popcorn demonstrated a small-to-moderate effect. 

44.2%

Consumers hold varying beliefs on how 100-calorie packs are created. In a pilot study, 36.4% of consumers thought it was via lower-calorie ingredients, 21.2% thought it was through reduction of quantity and 44.2% thought it was a combination of these two changes. 

r = 0.17 – 0.23

Across the authors’ main studies, the correlation between dietary restraint and choice of larger, lighter (versus smaller, denser) options was quite consistent. The correlation coefficient—a measure of how associated two variables are and represented by “r”—ranged from r = 0.17 to r = 0.23, indicating a small-to-moderate effect size. 

Health+taste+fullness

“We also examined why consumers higher in dietary restraint exhibit these consistent preferences,” Liu says. “We found that these consumers care more than others about eating healthily, but also care more about eating a serving of food that they think will make them feel full.” 

1 unit = 0.8 point increase

Dietary restraint predicts higher emphasis on health and fullness, but not taste enjoyment. This means that for every unit increase in dietary restraint, there was a 0.8 point increase on a 1-7 scale measuring the importance of addressing health, a 0.7 point increase measuring the importance of addressing fullness and no significant increase measuring the importance of addressing taste enjoyment. The heightened emphases placed on addressing both health and fullness help to explain why dietary restraint predicts choosing larger, lighter (versus smaller, denser) options, controlling for total calories. 

“Overall, the findings suggest that food marketers should design their products differently based on whether they are designing food packages for restrained or unrestrained eaters,” Liu says. “If they are marketing products like 100-calorie packs to restrained eaters, they should emphasize not just the healthiness of their foods but also the fullness potential.” 

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On one hand, beautiful aesthetics are closely associated with pleasure and indulgence. Looking at beautiful art or people activates the brain’s reward center and observing beauty is inherently gratifying. This link with pleasure might make pretty food seem unhealthy, because people tend to view pleasure and usefulness as mutually exclusive. For instance, many people have the general intuition that food is either tasty or healthy, but not both. So, thanks to looking pleasurable, pretty food may appear unhealthy. 

On the other hand, a specific type of aesthetics called “classical” aesthetics is characterized by the ideal patterns found in nature. For instance, a key classical aesthetic feature is symmetry, which is also extremely common in nature, where over 90% of animals and flowers exhibit some type of symmetry. Another prominent classical aesthetic feature involves order and systematic patterns, which, again, are ubiquitous in nature. This is evident, for example, in formations like webs or honeycomb, fish and reptile scales, and even mountain- and coastline-profiles. It seems possible that sporting more of these nature-like visual features might make food depictions feel more natural. Seeming more natural, in turn, may make the food seem healthier because people tend to consider natural things (e.g., organic food or natural remedies) to be healthier than unnatural things (e.g., highly processed food or synthetic chemicals). So, by virtue of reflecting nature, the same food may seem healthier when it is pretty (compared to when it is ugly).

A series of experiments tested if the same food is perceived as healthier when it looks pretty by following classical aesthetics principles (i.e., symmetry, order, and systematic patterns) compared to when it does not. For example, in one experiment, participants evaluated avocado toast. Everyone read identical ingredient and price information, but people were randomly assigned to see either a pretty avocado toast or an ugly avocado toast (the pictures had previously been, on average, rated as differentially pretty). Despite identical information about the food, respondents rated the avocado toast as overall healthier (e.g., healthier, more nutritious, fewer calories) and more natural (e.g., purer, less processed) if they saw the pretty version compared to the ugly version. As suspected, the difference in naturalness judgments drove the difference in healthiness judgments. Judgments of other aspects, like freshness or size, were unaffected. Experiments with different foods and prettiness manipulations returned the same pattern of results, suggesting that the effect is unlikely idiosyncratic to certain pictures.

Importantly, these healthiness judgments affect consumer behavior. In a field experiment, people were willing to pay significantly more money for a pretty bell pepper than an ugly one, and a substantial portion of this boost in reservation prices was attributable to an analogous boost in healthiness judgments. In another study, even when people had financial incentives to correctly identify which of two foods contained fewer calories, they were more likely to declare a target food to be the lower calorie option when it was pretty than when it was ugly—even though this choice lost them money.

There are some key qualifications. First, the pretty=healthy effect is limited to classical aesthetics. “Expressive” aesthetics do not involve nature-like patterns, but instead please through imaginative execution of creative ideas—think food cut into fun shapes or arranged to depict a scene. In one experiment, classically pretty and expressively pretty foods were rated as equally pretty, but only the former boosted naturalness and therefore healthiness while the expressively pretty arrangement increased neither. Second, the pretty=healthy bias can be muted by displaying a disclaimer next to the food reminding people that the food was artificially modified.

This effect of classical aesthetic principles has implications for marketers and public health advocates, albeit different ones. Classical aesthetics may be a costless and subtle new way to convey naturalness and healthfulness—attributes that consumers increasingly demand in food products. At the same time, pretty food presentation may optimistically distort nutrition estimates and negatively impact dietary decisions. Given these findings, policy-makers may want to consider modification disclaimers as an intervention or strengthen regulations around providing objective nutrition information with food images.

.

Read the authors’ slides for sharing this material in your classroom.

From: Linda Hagen, “,” Journal of Marketing.

Go to the Journal of Marketing

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You don’t have to look far to understand the impact the pandemic has had on the retail industry over the past few months. The terms “curbside pickup” and “contactless delivery” are now in the everyday lexicon for major cities and rural towns across the U.S. COVID-19 has forced shoppers to change their purchasing habits and, in turn, the retail industry has had to rethink its approach almost overnight.

With consumers mostly confined to their homes this spring, online shopping increased 77% year over year, . This forced change in behavior will lead to a permanent change in consumers and have a lasting impact on the retail industry. One-click purchasing, price comparisons in seconds and new platforms for shopping are just the start. Here are three key trends successful retailers have embraced during the pandemic—and how we all can stay ahead in this ever-changing landscape.

Rethinking Customer Experience

What’s changed: More than ever, consumers are looking to make a connection. Successful retailers stand out in how they’ve optimized their online experiences to include immersive websites and bridge the human connection remotely. For example, , and , where in-store employees track in real time what customers are browsing online and virtually share the items with them over a call. And retailers carrying larger-ticket items, like Best Buy and West Elm, are relying on to allow customers to better interact with the product and have one-on-one experiences with sales associates.

What’s next: Retailers will rethink customer service and personalized experiences at scale. Machine learning technology will be used more broadly to offer online chat support, similar to Walmart’s employee tool. will be readily available to help picture what a dining room set could look like in a home or to upload measurements and virtually try on a pair of jeans.

Why we’re paying attention: Customer expectations and technology are moving fast—and the brands that put top-notch customer service and innovation first will succeed.

Purchasing Made Easy

What’s changed:

Consumers are now spending more time with screens than ever before and companies are capitalizing on this trend. Sales via social media platforms are increasing and video platforms are becoming shoppable. Google recently launched Shoploop, where creators post shoppable 90-second videos. Similarly, YouTube is now featuring that drive to the product site. These features are not unlike what’s rolling out this year on , where related products can soon be featured at the bottom of a live video. To help retailers launch online stores during the pandemic, so that a user can shop, chat with customer service, pay, and track a purchase all within the platform. Retailers will even be able to integrate their CRM. In stores, Apple recently acquired , which makes payment easier by turning iPhones into payment processors, without the need for a card reader. And later this year, , using QR codes in partnership with PayPal and Venmo.

What’s next: Reducing the barrier to purchase further, TV will become shoppable to a mass audience, starting with the introduction of , where viewers can select a featured product in a video and make a purchase all without leaving the video. Post-purchase, expect auto-replenishment ads and notifications to be the norm.

Why we’re paying attention: More data on shoppers via social media enables marketers to pull from enhanced insights for more specific ad targeting, personalization of suggested products, and, ultimately, increased sales.

Redesigning for Flexibility

What’s changed: With more consumers buying online, retailers have had to find ways to ship the same day or next day to meet increasing expectations. To compete with Amazon Prime, will soon offer a lower annual membership fee, same-day delivery, and time-saving perks for in-person checkout. Retailers are offering convenience by shipping products purchased in-store to customers’ homes or , or delivering products purchased online via curbside pickup. These enhancements rely on a diversified supply chain not only focused on fulfillment centers but also on shipments from stores. To compete, leaders are focused on more robust supply chains, like Amazon’s investment in —India’s largest retail chain—and its interest in turning .

What’s next: Mass availability of hyperlocal delivery across the globe. With major competitors already investing heavily in this technology, Walmart launched , which boasts 90-minutes-or-less delivery across 2,000 items in the suburbs of Bangalore by sourcing products from neighborhood stores and warehouses. With the during the pandemic in the U.S, we expect to see similar trends in India, but optimized to account for grocery essentials and perishables.

Why we’re paying attention: Speed wins in the ecommerce era and these new innovations will surely be tested during the holiday season this year. Customer expectations will increase not only when it comes to delivery times, but across all aspects of the retail marketing space.

The monumental changes in the retail industry will impact how consumers come to expect their entire journey with a brand’s customer service, purchasing options, and flexible delivery needs. The most successful brands will be those that adapt to the pandemic-induced shifts that have invariably transformed the retail landscape.

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Diet-related chronic diseases impose a growing financial and health burden on the United States economy by increasing costs of healthcare and widening diet-related health disparities. Since the 1970s, the American diet has shifted considerably towards foods higher in calories and lower in nutritional quality. According to the Centers for Disease Control and Prevention estimates, more than one-third of American adults are obese. Childhood and adolescent obesity rates have also skyrocketed in the last 30 years with one in five school-aged children considered obese. To combat this disconcerting trend, public policy makers, food manufacturers, and grocery retailers have made efforts over time to design nutrition labels that can educate consumers about the nutritional value of the foods they purchase and help consumers make healthier choices. The World Health Organization also considers nutrition labeling to be a key policy option for promoting healthier diets. 

The packaged food industry has voluntarily taken steps to inform consumers about the nutritional value of food products so that consumers can make better choices. One such initiative undertaken is the Front-of-Package (FOP) nutrition label. FOP nutrition labels are voluntarily adopted by food manufacturers and provide nutrient information on the front of food packaging in a clear, simple, and easy-to-read format. The FOP labels present the key information listed on the Nutrition Facts Panel (displayed on the back or side of food packages) more concisely and often include calorie content and the amounts of key nutrients to limit (e.g., saturated fat, sugar, and sodium per serving). In an innovative study, our research team assessed the effect of the introduction of a FOP nutrition label in a product category on the nutritional quality of food products in the category. 
 
We report four sets of findings. First, we find that the adoption of FOP nutrition labeling in a product category results in a significant improvement in the nutritional quality of food products in that category. Second, we find that the effect of FOP is stronger for premium (high-priced) brands and brands with a narrower product line breadth. Third, we find that the FOP adoption effect is stronger for unhealthy categories and categories with a higher competitive intensity. Fourth, we find that manufacturers increase the nutritional quality of products by reducing the calorie content and limiting nutrients such as sugar, sodium, and saturated fat. 
 
Our results demonstrate that FOP labels are beneficial for consumers because their adoption results in food manufacturers improving the overall nutritional quality of products. This implies that policy makers, in partnership with food manufacturers and retailers, should encourage adoption of voluntary, standardized, and transparent labeling programs and consider options for broadening the information presented in FOP labels. We believe that policy makers should also invest in educational campaigns that inform consumers about the value of FOP labels and that would further incentivize food manufacturers to offer nutritionally better products. 
 
For food manufacturers, our results suggest that they must devote significant resources to product innovation to stay competitive. Specifically, manufacturers in unhealthy and more competitive categories can be more strategic and invest in innovation so they are ready to provide better products following FOP adoption. For food retailers, our results suggest that they should partner with manufacturers and give them incentives to adopt FOP because this can lead to better-quality products for their consumers and help build a positive brand image. Retailers can also promote products with FOP labels, especially in more competitive and unhealthy product categories, which can spur manufacturers toward more innovation and lead to an increase in the nutritional quality of foods over time. We encourage retailers to invest in measures that help monitor and track sales of products with FOP labels and provide this feedback to their manufacturers regularly to speed up the competitive effect of FOP labels. For consumers, our study finds that the brands that adopted FOP labeling offer nutritionally superior products than those that did not adopt the labeling. This result is particularly helpful for time-starved consumers looking to purchase relatively healthier products. 

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From:  Joon Ho Lim, Rishika Rishika, Ramkumar Janakiraman, and P.K. Kannan, “,” Journal of Marketing.

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It has been recited ad nauseum that we are living through unprecedented times. But when forecasting this year’s holiday shopping season, Rod Sides, who leads the U.S. retail and distribution practice at Deloitte and serves as the company’s vice chairman, cites precedent. During the recession of 2008, holiday spending was expected to drop substantially due to lack of discretionary finances —, according to Statista.

“Our theory was that folks wanted to be able to extend at least a greeting, some kindness to more people,” Sides says, suggesting this same mindset will influence holiday spending trends this year. “I expect it to be the same [as last year], maybe arrive slightly better, because people are trying to make up for the lack of other experiences.” That dollar amount could increase even more given that locked-down consumers are likely to save money on holiday travel, meals and entertainment.

According to data gathered by eMarketer, . This represents a 2.4% increase in spending at brick-and-mortar locations and a 13.2% increase in e-commerce from the year prior. Sales on Black Friday and Cyber Monday both shot up nearly 20%, and purchases on Thanksgiving rose almost 15% from 2018.

While holiday spending may continue at its robust pace, the way in which consumers shop this year is subject to change.

showed that 70% of consumers will start their holiday shopping earlier than last year to avoid crowds, and 80% will consolidate their shopping so as to necessitate fewer trips. Customers will be arriving with intent: 67% plan to check whether an item is in stock before heading to the store. The same report found that shoppers will opt for brands and stores that ease their pandemic-related concerns, as 53% of customers say they will prioritize shopping at stores that offer a contactless experience and 47% plan to purchase online to pick up curbside.

This holiday season, brands can attract consumers by funneling them through a journey that can be customized to fit their comfort level. Place ads where customers are spending most of their time these days: social media, YouTube and streaming video. Messaging should emphasize in-person safety protocols and the availability of online ordering. Then, ensure that the in-store experience, particularly closer to the holidays, lives up to the promise of safety and a speedy purchase.

“Brands that give choices will win,” says Lauren Cooley, senior vice president of retailer and brand solutions at the mobile marketing agency RetailMeNot. “Communicating the actionable messages—how can I transact with you? How can I get the best deal? What are the recommended items I should be thinking about? That, to me is the critical piece. It’s not about framing all of our ads with what’s happening [in the world]. Everybody knows what’s happening. It’s about making sure that consumers really understand how to [safely] interact with these brands they love.”

Awareness

Pandemic-related issues have diminished customers’ perceptions of brands—even those they’ve previously favored. According to an April survey of more than 1,000 online shoppers conducted by the ecommerce news outlet Digital Commerce 360, . “Consumers became less brand loyal,” Cooley says.

Ryan Sauer, director of digital marketing at PowerChord, feels that effective creative relies on a hybrid message that focuses on both safety and traditional holiday cheer. Continue to let customers know about your contactless options, but there’s nothing wrong with including images of families enjoying a holiday meal together, or a child tearing into a gift. Customers are still hungry for a holiday experience, whatever it looks like, so remind them of what they’ve looked forward to in the past.

Social media posts and banner ads remain effective avenues to consumer attention, but pay special mind to YouTube. Staying home led to a 60% increase in the amount of media content watched during lockdowns, and Sauer notes that one of the most pronounced trends during has been customers taking on projects themselves. Rather than call someone to enter their home, for example, they are attempting to unclog drains and spackle walls on their own with the help of YouTube tutorial videos.

Produce pre-roll ads or in-video banners to meet customers on YouTube. Because consumers are spending so much time in front of their desktop computers, make sure your ads play as nicely with traditional computer browsers as they do on mobile.

Research

Budgetary and safety concerns are likely to shift the kickoff of this year’s holiday shopping season from October to mid-September. The pandemic has left many customers are working with smaller budgets, and the sooner they get a sense of how much gifts will cost, the sooner they can begin squirreling money away. Similarly, those who prefer browsing the aisles will be heading to stores long before the holiday crowds arrive so social distancing guidelines will be easier to follow. An earlier launch to the shopping season also affords customers with the peace of mind that gifts will arrive in time for the holidays.

Holiday messaging should begin as close to mid-September as possible to better position your brand for when customers begin their research in earnest. Understand they may be disoriented from inconsistent store closings and reopenings and therefore might not immediately know where to look—or even remember you.

“Customer loyalty is up for grabs right now,” Sauer says. “If [consumers] don’t think that your brand or store … is open, or is there for [the consumer], you’re not top of mind.”

In addition to being clear about your payment options and safety protocols, highlight your customer reviews to potential shoppers during their research phase. Those brands that have successfully managed new customer expectations and shopping experiences during the pandemic can solicit recent testimonials from customers to help put others at ease. More so than illuminating how you have been handling supply chain woes or fluctuating social distancing guidelines, these reviews serve as proof to customers that your brand follows through on its promises.

Purchase

The challenge at the bottom of the funnel is to ensure that customers have no reason to bail on their purchase. Some might peel away once tax, delivery and other fees start factoring in and they realize an item might be financially out of reach. Others who were promised a contactless experience could get upset when they pull up to a store only to witness sloppy execution of distancing guidelines.

Sauer believes that financing options can reduce sticker shock once customers, who may be operating on a reduced pandemic budget, are ready to check out virtually or in person. Consider putting together payment plans and layaway services.

“The largest competition during the holidays [are] massive marketplaces—Amazon obviously has payment plan financing,” Sauer says. “Any type of approach you can do to also show you can be flexible during this time to be able to compete with them … give [customers] additional reasons to continue to look into [your brand.]”

Cooley encourages brands to spend time perfecting and communicating purchase protocols so customers have no excuse to bail at the last minute due to safety concerns. This process can include online ordering with either reliable delivery or in-store pick-up, and reconfiguring the layout of your store to include one-way aisles, distanced cashiers and extended weekday morning and evening hours. Even though individual states have produced different reopening guidelines, err on the side of overly cautious.

Another way to reduce crowd size, Cooley adds, is to deemphasize traditionally mammoth shopping days, such as Black Friday, and extend sales over the entire Thanksgiving week and through the following Cyber Monday. Sides also suggests offering customers a slight discount if they order online and pick up curbside, which can attract cost-conscious shoppers and reduce the likelihood of a delayed delivery.

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As firms seek to boost revenues and margins, they are increasingly targeting customer defectors. Experts report that the costs of reaching out to lost customers are generally far lower than the costs of contacting new customers. In addition, the chance of winning back a lost customer is up to eight times greater than that of acquiring a new customer. In recognition of these advantages, McDonald’s announced plans to invest from $150,000 to $700,000 per location in the U.S. to win back displaced customers.

However, experts also report that customers can defect strategically because they anticipate improved offers such as lower prices from competitors. In such a scenario, a firm’s win-back activities could unnecessarily lower firm revenues. In addition, resources are misallocated if win-back offers to defected customers provoke negative attitudes in loyal customers (e.g., feelings of unfairness if loyal customers pay higher prices than defected customers). 

Using a cross-industry data set, our research team reports that reacquisition increases firm profits. The positive outcomes of customer reacquisition, such as increased revenues, more than offset the costs of customer reacquisition management such as price concessions. 

We also demonstrate that managers need to understand the important role that a company’s culture plays in effective customer win-back. While reattracting lost customers can lead to increased profits, win-back processes are often unpleasant for employees—who likely perceive customer defection as an undesirable occurrence. Usually, employees do not freely and deliberately discuss their mistakes. They may fear blame from colleagues or punishment by superiors. Thus, company cultures that reward success and punish failures can instill reluctance in employees to address customer defections.

We demonstrate that successful customer reacquisition management requires a failure-tolerant organizational culture that encourages a constructive treatment of failures. In failure-tolerant cultures, employees feel free to voice ideas and discuss customer defections openly. Thereby, employees assume responsibility for the reacquisition process. Such feelings of responsibility spur employees to work harder, be more creative and act unconventionally when reacquiring customers. As a result, employees address more defections and increase win-back success. 

However, failure tolerance can also have a boomerang effect: Strong levels of failure tolerance reduce win-back success. Highly failure-tolerant cultures can induce laxness in employees. Once employees have internalized a tolerance for failure, they may make decisions with less due diligence and effort and can even hide behind a failure-tolerant culture, provoking more and increasingly severe failures in customer relationships. More and increasingly severe failures can create irrecoverable damage to win-back success. Even motivated and creative employees are unlikely to win back customers who experienced multiple and severe failures. 

We also find that win-back guidelines increase win-back success. In such guidelines, companies establish and enforce strict formal rules and procedures that employees must follow when reacquiring customers. Such guidelines help employees detect customer defection, formulate expected actions and outline monitoring activities to ensure learning for future reacquisition attempts. We observe that such guidelines increase reacquisition attempts and win-back success. 

Importantly, formal reacquisition guidelines do not conflict with motivational effects that failure tolerance raises in employees. Instead, we demonstrate that guidelines help unfold the full potential of failure-tolerant cultures. Employees who assume responsibility for customer win-back find those guidelines informative. In other words, such guidelines help them structure the otherwise unstructured context of customer reacquisition management. We also observe that guidelines ensure that the boomerang effect of failure tolerance sets in only for excessively failure-tolerant companies. 

Our findings have managerial implications. First, even if customer acquisition and retention management are well-established in company practice, we call on managers to stimulate reacquisition activities. Addressing failures, shortcomings and defections is likely less appealing than acquiring new customers, so win-back endeavors must be encouraged. Second, to benefit from reacquisition activities, we suggest that managers organize for customer reacquisition management. Managers need to establish cultures that are open to failure, but must also be aware that failure tolerance can result in “too-much-of-a-good-thing” environments: High levels of failure tolerance reduce reacquisition performance. Thus, managers also need to recognize that failure tolerance is not a substitute for management. Third, we observe that few companies currently have comprehensive reacquisition guidelines in place. Because those guidelines steer employees toward successful win-back and amplify the performance effects of failure-tolerant cultures, we call on managers to establish reacquisition guidelines. 

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