2022 Digital Consumer Trends Index

cheetahdigital.com

2022

Digital Consumer Trends Index

Global Consumer Attitudes and Trends in Personalization, Privacy, Messaging, Advertising, and Brand Loyalty

In conjunction with

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Executive Summary

For generations, the path to purchase was relatively linear, something akin to a train track. Marketers simply had to fill the funnel with a few ads and shuffle consumers straight to the brick-and-mortar cash register. Life was good, creative was the difference maker, and sales steadily grew year-over-year. As ecommerce emerged and digital channels evolved, marketers still seemed to control the game as they leaned hard into marketing and advertising technologies that kept them one step ahead of consumer trends.

Then came the global pandemic of 2020, changing the commerce landscape forever. Consumer behaviors that tended to shift over years now shift in a week, or even just a few days. Demand for some product categories skyrocketed, but nothing like the rise in consumer demand for the amount of channels they want to purchase from. The path to purchase today looks more like a bowl of spaghetti, with technologies providing infinite routes to closing the sale. What used to be a simple game of persuasion, which marketers had nearly mastered, has morphed into the age of consumer empowerment where control, choice and convenience rule the day. Marketers need to pivot energies from trying to persuade, to a model that tries more to support a customer. This means being in every possible marketing channel, while delivering value, and critical product information in real-time, as well as understanding the consumer as an individual rather than lumping her into a segment. Like it or not, this is the “new normal” and the way in which we “internet” has been changed forever.

But fear not. As much as how we market and facilitate value to a consumer has changed, some of the core channels and basic tactics are still resonating. For example, email is still the preferred channel for engagement and driving sales when looking at consumers as a whole. But consumers have been vocal about their expectation of marketers when it comes to personalization, across all available channels. As more technology and data becomes available to brands, consumers feel it is no longer acceptable to simply speak to segments or to make suggestions and recommendations based on data derived from third parties. Resolving these issues should not be difficult for marketers today as the tools and data are readily available to do so…But sometimes bad habits are hard to break.

Additionally, loyalty programs continue to be the preeminent way to build profitable and lasting relationships with consumers. They expect comprehensive programs that go beyond points for purchase and will reward brands that are delivering engaging, interactive experiences. Other successful factors include providing exclusive access to new products, truly-personalized product recommendations, public brand recognition and providing an interactive community component. If there is one clear takeaway, it is that even your own customers will buy from your competitor if you do nothing to engender their loyalty. Adopting a comprehensive loyalty program should be a goal in your greater relationship marketing strategy as it feeds both your customer acquisition and customer retention needs simultaneously.

Privacy is also top of mind with people today. Consumers are taking more steps than ever before to protect their privacy online with a significant rise in ad blocking tech installations, continued increase in the clearing of cookies, encrypting passwords and using paid-for internet security software. Consumers are clearly en-masse pretty cognizant about the value of their data and aim to protect it.

When contrasted with well established global privacy legislation, the denouement of Apple’s IDFA, and third-party cookie tracking enjoying its final days, modern marketers must now shift to a fully-fledged first- and zero-party data to build direct connections with consumers.

The good news is that the majority of consumers are willing to trade personal and psychographic data if you offer the right value exchange, and especially if you promise to keep that data safe and private. The mechanics of that exchange could be as simple as offering a discount, a reward or a chance to win a prize. But when that transaction is consummated, brands are able to deliver on the expectation of a truly-personalized experience such as better content, offers and product recommendations. More importantly, in this age of consumer empowerment, marketers can now meet the consumer where they are, in any channel, in near real-time, including in-store. The value exchange economy is roaring to life and it's fueled with first- and zero-party data. The data you are about to read in this report has the ability to significantly impact your revenue goals in both the short and long term, but it may require a willingness to adopt a new marketing mentality. Relationship marketing requires listening to the right consumer signals intently and activating them in real-time in any channel a consumer prefers. This is an extraordinary opportunity to assess your organization's ability to execute on that level and deliver against consumers' growing demand for more personalization, more privacy and a deeper relationship with the brands they know and trust.

Key Takeaways

When it comes to driving sales, email has always been one of the most effective channels, especially considering its ability for the hyper-personalization of content and offers. In fact, email still beats banner ads, social media ads, organic posts, and SMS by up to 108%, with half of consumers reporting they have purchased a product directly as a result of an email they received in the last 12 months.

As ever, brand loyalty is on the rise, with 57% of consumers prepared to pay more to purchase from a preferred brand. This is backed-up by huge increases in the number of consumers who are loyal to a brand because they understand them as an individual (110% increase), treat their data with respect (71% increase), align with their personal values (58% increase) and admire their loyalty program (55% increase).

Consumers are loyal by nature, but what they expect from the loyalty programs that turn them from one-off customers into loyal brand advocates is maturing. We have seen a stark rise in consumers expecting contests and sweepstakes (73% increase), exclusive access and content (58% increase), personalized product recommendations (56% increase), brand recognition (45% increase) and community (33% increase ).

The majority of consumers want to receive personalized content and offers from trusted brands and will readily share personal data for it. However, they prefer brands use data that has been explicitly shared directly to the brand (zero-party data) and they do not feel comfortable with cookie-fueled ads or location tracking — they still see this as a creepy marketing tactic.

As privacy regulations sweep the globe and data breaches continue to dominate news cycles, consumers are more privacy conscious than ever online. We have seen huge rises in the those turning to incognito browsing (50% increase), a PC cleaner (48% increase), password generator (40% increase), ad blocking tech (37% increase), paid for premium software (31% increase), and a password manager 31% increase).

Research parameters

New global research commissioned by Cheetah Digital reveals what consumers expect from the brands they do business with online, the channels they want to connect on and the data they’re prepared to share in return for more personalized experiences at every stage of the customer lifecycle; from acquisition through to loyalty.

It shares insight from 5,404 consumers across six countries (Australia, France, Japan, Spain, the U.K. and Ireland, and the U.S.) as well as by age group (18-24, 25-39, 40-54, and 55-75), gender and annual household income ($0-$25,000, $25,001-$50,000, $50,001-$75,000, $75,001-$100,000, $100,001-$150,000 and over $150,000) to help digital strategists and decision-makers understand how these issues fit together to build more meaningful and lasting relationships between brand and buyer.

The format for this version of our report focuses mainly on a global view across all demographics. Be sure to visit www.cheetahdigital.com for other report versions that take aim on the differences in attitudes among varying age groups along with a US-only data report. (Both scheduled for late spring 2022.)

Email Is Still

The Number 1 Driver Of Sales... Again

There are numerous touchpoints in which one should be connecting with customers, but email is still comfortably the prefered channel of consumers for receiving offers, content, incentives, and rewards from brands. Half of consumers (50%) have made a purchase from an email they received in the last 12 months, a 9% uplift on last year.

If you want to get your emails opened, read, clicked, and converted, email personalization needs to go beyond a first name in the subject line, or lumping consumers into large cohorts based on tired buyer personas. True email personalization offers products your customer has expressed an interest in, that fit their declared budget, and contain dynamic content that uses keywords that you know will elicit engagement from them — derived from preference insights and purchase motivations that they have explicitly told you. This zero-party data will empower you to deliver hyper-personalized, data-driven email, and maximize ROI from it. Using zero-party data, you can truly personalize every single touchpoint across owned channels to enhance the customer’s journeys with your brand. This is the path in 2022 to increased revenue and customer retention.

Purchase Persuasion Factors

Consumers are influenced by a multitude of factors when making purchases. Brands need to prioritize their value proposition to be front-and-center when a customer is ready to purchase. 41% of consumers still hunt for the best price when it comes to buying, but others value convenience (17%), fitting their style (26%), and expecting brands to behave responsibly (16%).

Online it’s sometimes easy to forget that visitor #4532 is a real, live person with completely unique wants and needs that can’t be thrown into a large cohort purely based on something they once bought.

Many initiatives by marketers that purport to be personalization rarely meet the definition, which is “producing something to meet someone's individual requirements.” Personalization is not achieved through segmentation, cohorts, or lookalike audiences. Marketers are commonly serving up remedial efforts such as retargeting ads, using simply a customer’s first name or employing a curation algorithm that delivers the all-too-familiar: “people who bought item X also bought item Y.” These efforts fail to yield the ROI, engagement, and long-term excitement from consumers that true, next-gen personalization investments net.

Consumers are craving more individualization from brands and rewarding those that have made that commitment. Here are a few considerations that are persuading consumers on their journey to purchase.

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Get the complete report with data surveying over 5,000 global consumers on sentiment and attitudes to personalization, privacy, messaging, advertising and brand loyalty.

of consumers will get the best price — it's all about value for their spending

of consumers want brands to behave responsibly and they vote with their wallet

increase in consumers hunting the best price

Leveraging Mobile For Real-Time Engagement

Real-time engagement is the prerequisite expectation of digitally-savvy consumers who have long demanded next-day shipping, live-tracking of their brunch order, and choosing potential dating partners at the swipe of a finger.

Consumers interact with a brand on multiple channels, oftentimes unpredictably. The way to engage with these consumers is through real-time, hyper-personalized experiences. To cut the buzzwords, that's providing the right offer, on the right channel, at the right time. More than half of consumers (52%) declared they use a mobile phone while in a store to research or help them decide to make a purchase, and a hefty 47% claim to have browsed for products in a physical store but purchased online. It’s clear that if you are not listening to these multiple touchpoints across various channels, or if you can’t activate that data and provide a relevant and real-time reaction on mobile, your customers will be purchasing elsewhere.

In today's digital and interconnected world, your relationship marketing strategy has to have mobile-first capabilities, rather than merely being mobile-responsive. This cannot be overstated.

Consumers interact with an average of six digital touchpoints when engaging with a brand — whether that’s via social media, payment through digital wallet, offers from SMS or email, just to name a few — but all these touchpoints can be directly accessed by consumers through mobile. Mobile is no longer a nice-to-have, it’s a must-have.

Mobile is no longer a nice-to-have, it’s a must-have.

of consumers have purchased a product or service in-app

have used my mobile phone while in a store to research or help me decide to make a purchase

have browsed for products in a physical store but purchased online

increase in consumers who have bought something because of an email I viewed on my mobile phone

How Best-In-Class Brands Are Nurturing Profitable Relationships

The overwhelming majority of consumers, when thinking about how their favorite brand communicates with them, want the relationship to go beyond the purely transactional.

Above all else, a staggering 80% of consumers like consistent shopping experiences, irrespective of the channel. That means marketers need the ability to both listen and react in all channels. More importantly, all of that data must flow in and out of a single source of truth. Simply put, there is a need for a unified customer profile which includes identifying core information about the customer, the channels and interactions they’ve had with your organization along with their transaction history, be it revenue, an event, or simply visiting your website, for example.

78% of consumers have a favorite brand as it rewards them for their loyalty, and almost 3/4 of consumers like brands to use their data responsibly and treat them as an individual. Where privacy was once an afterthought for most brands, it’s now seen as vital a differentiator as price, product, and customer experience.

of consumers have a favorite brand as it provides a consistent customer experience

of consumers have a favorite brand as it rewards them for their loyalty

of consumers have a favorite brand as it uses their data in a way that makes them feel comfortable

of consumers have a favorite brand as it treats me like an individual

of consumers have a favorite brand as it strives to develop a relationship

of consumers have a favorite brand as surprises me rewards I don’t expect

of consumers have a favorite brand as it treats them like a VIP

How Favored Brands Communicate With Their Customers

Your communication frequency should be based on your typical customer's purchase cycle and profile. If customers typically make repeat purchases every six months, don’t inundate them with targeted email advertising right after they’ve made a purchase. More than half of consumers (51%) describe the relationship with their favorite brand as they communicate as and when necessary — a sweet spot you learn through progressively getting to know your customer.

Progressive profiling allows you to ask the next-best question to expand your knowledge on an individual. New data gives you new reasons to reach out with a more relevant message or offer. 23% of consumers describe the relationship with their favorite brand as one that understands them. Most forward-thinking brands are progressively profiling customers’ interests, preferences, motivations and desires just as two people would do in a conversation. With zero-party data, audience building and progressive profiling never stops, it just evolves. Let the data tell you when they have a need or your have a relevant message the send. The days of marketers casting and blasting one single message to their entire database are behind us. Know your audience and let AI or machine learning help determine who gets that next message and when.

Personalization Initiatives Are Falling Short

Most marketers kind of suck at personalization. That might sound like clickbait, but in the data economy, where brands and retailers have huge portfolios of data on their customers, personalization is more often a marketing department buzzword than a genuine tactic.

Consumers are frustrated with the lack of personalized messaging they are receiving, with half of them feeling irked by irrelevant content or offers (49%), receiving messages that don't reflect their wants and needs (41%), and almost a third do not feel a brand has even recognized their shopping or loyalty history (31%).

35% of consumers felt frustration when they received messaging based on what seemed to be information about them that hadn't been shared directly with the brand. Personalization is the core of relationship marketing. That means it’s about delivering value, relevancy and creating meaningful experiences to individuals based on their own preferences and data...not third-party or inferred data that may have possibly been bought or collected by tracking and snooping.

Your personalization and messaging strategy needs to be rooted in both first- and zero-party data. Creating messaging opportunities based on transactional data is great, but using zero-party and psychographic data to personalize those messages will differentiate your brand from your competitors.

of consumers felt frustration when they received irrelevant content or offers

of consumers felt frustration from messaging that doesn’t reflect their wants and needs

of consumers felt frustration when they received messaging based on information about me that I hadn't shared directly with the brand

of consumers felt frustration when they received messaging that didn't recognize their shopping or loyalty history

Personalization that Misses the Mark is Becoming All-Too-Familiar

Consumers share their frustrations when it comes to messaging from brands.

“When we think about the big picture of moving away from third-party data, we have to move somewhere. This migration path looks like first-party data."

— Scott Cunningham, Founder, IAB

Consumers Are Happy With the Amount of Messaging They Receive From Brands

Whether through email, apps, social media or SMS, consumers are generally pretty content with the volume of messages they receive from brands.

When it comes to being “about right” or would like to receive more messaging, the numbers are positive. Consumers feel they get the perfect amount of or would readily receive more messaging about discounts (70%), brand value (65%), loyalty program (71%), VIP offers (68%), treats (73%), free delivery offers (72%), and sales (55%).

When it comes to feeling “overwhelmed” by messaging, the numbers are again encouraging: discounts (11%), brand value (12%), loyalty program (11%), VIP offers (12%), treats (10%), free delivery offers (10%), and sales (16%).

Those brands that win master the craft of connecting with their customer on the right channel, with the right message, at the right time.

of consumers receive about the right amount or would like more messaging on loyalty programs from brands

of consumers receive about the right amount or would like more messaging on VIP offers from brands

of consumers receive about the right amount or would like more messaging on brand values

Highly-Profitable Customers Are Being Handed to Your Competitors

Consumers tend to be people of habit, and many enjoy the benefits that come from being loyal to a brand. The most unambiguous way a customer can show they trust your brand is to pick you over the competition, have affinity for your products, and believe in your brand promises, as well as being prepared to pay a little bit extra for it — 57% of consumers identify this way.

However the real story here is that over two-thirds of consumers say there are examples where they frequently buy from the same company, but don't feel loyal to that company; and 78% say they are loyal to a particular brand, but will look elsewhere if it’s cheaper or more convenient.

Old patterns of consumer behavior no longer hold true in the current marketplace, and brands need to adjust to survive. Loyalty programs can be that all-important arrow in the retail CMOs quiver.

of consumers buy frequently from the same company, but are not loyal to that brand

of consumers are prepared to pay more to purchase from a trusted brand

only 29% of consumers are not loyal to any particular brands

Customer- obsessed businesses expect to be 7X more relevant to customers and 4X more profitable

The Key Consumer Trends Driving Purchase Decisions

Get all the data surveying over 5,000 global consumers on sentiment and attitudes to personalization, privacy, messaging, advertising and brand loyalty.