The past few years have caused decades’ worth of disruption to consumer spending in a remarkably short space of time. The pandemic forced temporary upheaval – but also lasting changes to consumer habits – and the cost of living crisis is rewriting the rules yet again.
In this article, we look at insights from Google and consumer research groups to assess the future of shopping in the UK. We discuss the trends behind the latest data and how marketers can keep up in a world full of uncertainty.
Increasingly consumers in the UK are spending more time window shopping online and discovering new brands. Rather than searching for specific products by specific brands, shoppers are looking further afield for inspiration. In this sense, the search experience is moving towards discovery.
According to Google data, generic queries like “dewy foundation” and “best couch” are growing faster than branded queries. At the same time, Google has seen a 40% increase in searches for clothes in specific colours (Jan 2019-Aug 2022).
The rise in online window shopping and more generic queries raises opportunities and risks for UK retailers.
On the one hand, consumers are more likely to discover new brands and products, which increases opportunities for retailers to win new customers. However, the consequence of this is that your existing customers are also more likely to shop elsewhere.
As a result, retailers will need to work harder to retain customers and build loyal relationships.
Exploring the trend of brand discovery in more detail, Google data suggests consumers are exposed to more choice than ever. As a result, retailers are also dealing with more competitors and shoppers who are more fickle than in previous years.
In a joint study with Trinity McQueen, Google finds that 51% of fashion shoppers tried a new brand in 2022. This is up from 24% in 2020 and 34% in 2021.
The same study also finds consumers are now more likely to try new brands and retailers online than they are in physical stores. This emphasises the opportunities for retailers to win new customers through online channels.
Crucially, it also reveals a potential retention strategy for retailers that can encourage existing customers to hit the shops.
In a recent Google report, entitled The future of U.K. shopping, Seth Godin weighs in with some advice for retailers as consumer habits change.
Godin believes retailers will approach new challenges in one of two ways. Some will try to be everything to everyone while others will double down on being unique and relevant to their target audiences. He says it’s the companies doing the latter that are seeing customer loyalty increase even as consumers are becoming more fickle across the board.
“We’re trying to be everything to everyone. But there’s a whole other group of marketers that are paying attention to idiosyncrasy: to being unique, to being worth seeking out. Their brand loyalty isn’t going down, their brand loyalty is going up.” – Seth Godin
With consumers having more choice than ever but also being more fickle, retailers need to double down on audience targeting. As Godin puts it, don’t try to be everything to everyone. Know your target audience and make your campaigns even more relevant to their specific needs.
The cost of living crisis obviously increases consumer sensitivity to pricing and spending overall. This doesn’t mean people are always looking for the lowest prices possible, though. Quality is still a key factor, even if consumers have to prioritise some purchases over others.
According to ONS data, 89% of adults in Great Britain say their cost of living has increased. Among this group, 57% say they are spending less on non-essentials and 36% say they are shopping around more for purchases.
With consumers shopping around more for their purchases, the balance of quality and cost is more important than ever. Google says it has seen more than a 40% increase in search interest on YouTube for terms including “review”.
At the same time, 88% of consumers say YouTube makes it easier to decide what to buy.
In other words, shoppers want to know they’re getting a good deal when they buy from a retailer and this sensitivity only increases during difficult times.
As consumers spend less of their money on non-essential purchases, retailers need to emphasise the value of products.
Google recommends using high-quality images, videos and reviews on your product pages to emulate the experience of inspecting products before purchasing in-store. Retailers may want to consider networking with relevant influencers on platforms like YouTube who can publish reviews of the products they’re selling.
Retailers selling camera gear can send the latest products to relevant YouTube channels for them to review.
Positive reviews can increase the value perception of products but this isn’t the only way to improve the quality-price balance for consumers. One obvious tactic is reducing prices to beat your competitors but this creates a race to the bottom that could cause more harm than good.
Alternatively, you can work on improving the overall customer experience. This way, you’re not only increasing the value and quality perception for new customers but also incentivising loyalty among existing customers. This will be particularly important for retailers selling both online and in-store.
If we stay on the topic of camera stores, retailers can win new customers online while offering in-store sessions to help them set up and use their new cameras and servicing incentives to keep their products in the best possible shape.
You could also implement a points system where customers buying online earn points for special deals. If you want to incentivise store visits, you could make these offers redeemable in your shops or offer extra points for in-store purchases (including items reserved online for collection).
Unsurprisingly, the Covid-19 pandemic forced consumers to spend more of their money online. What’s more telling is that people in the UK continue to spend more of their money online, long after lockdown measures were fully lifted.
Retailers need to understand that this includes a lot of people who may have spent very little of their money online before the pandemic. Lockdowns essentially forced people to adopt online spending and many of these people will continue to spend more of their money online.
This means new audiences are accessible online but also that pre-Covid audience insights will be less relevant.
Insights from Google and Trinity McQueen find that consumers increasingly believe online shopping beats in-store experiences in several ways:
Retailers that understand customer preferences for online and in-store shopping are best positioned to build omnichannel experiences that keep them coming back for more.
The same study also reveals how consumers are searching before they visit stores on the high street. It finds 30% of retail consumers say they browse online most or every time they purchase in-store. Likewise, 24% say they go into a store most or every time they purchase online.
This shows how UK consumers are actively bridging the gap between online and offline interactions with brands. Retailers need to take advantage of this. Content isn’t only a lead generation tool anymore; it’s also a conversion strategy when customers are in your store.
This also highlights the growing importance of local SEO for retailers with physical locations. Google says it has seen a +950% increase in “near me” searches between Jan 2018 and Aug 2022.
The search giant says, once consumers have narrowed down their options with online research, they’re using local search to find out where to go.
In Google’s The future of U.K. shopping report, retail expert Cate Trotter says that brands building truly omnichannel experiences are the ones growing fastest right now.
“Some grocery stores have made their spaces more experiential but others have just focused on opening larger numbers of smaller stores – and those are the ones who’ve really grown.” – Cate Trotter
While many retailers are focusing on their flagship stores, the companies growing the fastest right now are often the ones opening smaller spaces in more locations. This makes a lot of sense when you consider the online experience Google describes above.
If you can be visible for the online research consumers perform and have a physical location within their reach, you’re in a much better position to cover the whole consumer journey.
The pace of change in recent years has been one of the most challenging factors to deal with. Normally, consumer trends gradually evolve over time. Yet, the pandemic caused such intense disruption that consumer actions were transforming weekly, daily and, sometimes, by the hour.
Now, we have an ongoing pandemic colliding with a cost of living crisis, economic downturns, environmental disasters and mounting geopolitical tensions around the world. This makes it increasingly difficult for retailers (and all companies) to keep up with the pace of change.
For a time, the pandemic made historical consumer data almost useless beyond the scope of comparison. The changes were simply too frequent and extreme. The companies that thrived during the pandemic (especially during lockdowns) were the ones who adapted quickly.
Search was the only reliable source of real-time data capable of showing how consumer habits were changing on a day-by-day basis. Retailers that tapped into this data were able to respond to emerging demands, adapt their marketing strategies and redistribute their budget to keep investing in high-ROI strategies throughout the pandemic.
This allowed retailers to identify emerging trends as obscure as balloon deliveries but also pull back on promoting items people were less interested in.
As we move from pandemic to permacrisis, the uncertainty continues to pile up and search data will be even more important in 2023. Insights from consumer studies are often out of date before they’re even published but search data provides a live view of what consumers are looking for and what they’re doing right now.
This will be key for retailers looking to make sense of the uncertainty ahead.
We’ve covered this topic in plenty of detail recently and you’ll find more in the following articles:
Based on the trends we’ve discussed in this article, here’s a quick summary of marketing priorities for retailers in 2023:
If you have any concerns about your retail marketing strategy for this year or managing anything on the list above, our team can help.
Our search experts can unlock the data you need to clear up the uncertainty and create an adaptive marketing strategy to invest your budget where it makes the biggest impact, no matter how much consumer habits change.
Call us on 02392 830 281 or send us your details and we’ll call you.
Dave is head of SEO at Vertical Leap. He joined in 2010 as an SEO specialist and prior to that worked with international companies delivering successful search marketing campaigns. Dave works with many of our largest customers spanning many household names and global brands such as P&O Cruises and Harvester. Outside of work, Dave previously spent many years providing charity work as a Sergeant under the Royal Air Force Reserves in the Air Cadets sharing his passion for aviation with young minds. He can often be found in the skies above the south coast enjoying his private pilot licence.
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