Global leader in data analytics and consumer behaviour insights, GfK has highlighted the opportunities that exist in today’s ‘new world’, where consumers are adapting and recovering to a new consumerism order, at a recent event in Sydney.
“It was exciting to host our first in-person GfK Insight Summit in three years. Although these are difficult times, we think there are plenty of reasons to be positive and not become victims of all the negativity out there. It is the businesses which can confidently move from data to decision that are best equipped to cut through the excuses and find the opportunities,” GfK Australia and New Zealand managing director, Dr Morten Boyer said.
At its Insight Forum: Finding Opportunities, not Excuses event,GfK head of consumer intelligence and consulting for Australia and New Zealand, Mitesh Khatri explained why the current economic climate shouldn’t be used as a justification for subpar business performance.
“It’s been a tough couple of years, not just for businesses, but for consumers. We are undoubtedly in a new world and today is about finding opportunities, not excuses,” Khatri said.
The importance of values
Values are more than the words up on an organisation’s wall; they’re deep, personal human truths, according to Khatri.
“These truths should form the guiding principles of every marketing and sales strategy. They can also be the real point of difference in your business. In fact, 62% of consumers say they only buy products and services that appeal to their beliefs, values or ideals,” he said.
“The cornerstone of who we are, our values influence how we see the world. As marketers, we often look at different consumers by generation, market trends and consumer intelligence. But values are the cornerstone that drives influence.”
Values can help brands build a deeper emotional connection with consumers when they guide principles beyond demographics, ground innovation at a deeper level, strengthen messaging and are key to differentiation.
GfK research has found that Australia’s key values typically differ from the rest of the world. Australians value honesty, protecting family, authenticity, freedom and enjoying life the most. When compared to the globe against five segments (Discoverers, Indulgers, Elementals, Mindfuls and Aspirers), Australians land mostly in the Discoverers, Indulgers and Elementals categories.
Discoverers value freedom, creativity, curiosity, open-mindedness, learning, knowledge, social tolerance, equality and internationalism, while Indulgers value enjoying life, leisure, pleasure and material security, and Elementals value helpfulness, modesty, thrift, simplicity and respecting ancestors.
“Australian consumers love their freedom. They’re pleasure seekers. Material security is important to them. They want to enjoy life. Health and fitness are important to them. These personal values drive their thinking and marketers can tap into that opportunity to find better ways to connect with the Australian consumer,” Khatri said.
Evolving values
Core values tend to stay relatively stable and consistent, but they do eventually evolve and manifest in new ways. Understanding that as it relates to consumers is critical to driving strategy, Khatri said.
“For example, as people grow older, they tend to pick up the values of their parent’s generation. They tend to value things less about ambition and more about enjoying life and embracing faith as they age. At the same time, big life events or traumas also cause a shift in values. Covid, for example, placed a huge emphasis on health and fitness. It also caused consumers to shift their values in terms of what’s important to them,” he explained.
“Brands tend to do well at understanding category predispositions based on consumer needs, attitudes and predispositions of choice. However, brands don’t do well when understanding those implicit, deeper values that are held — the things that have the power to build a stronger emotional connection with consumers by addressing their deeper, underlying implicit forces of choices.
“In a nutshell, values help drive product strategy. They help marketers understand nuances beyond demographics, geographies, attitudes and needs. They drive messaging, innovation and brand positioning by enabling marketers to connect with the consumer on a deeper level beyond the surface of what consumers say.”
The opportunity of home
According to GfK research, 71% of consumers cook at home for fun, 70% work or study from home and 45% enjoy gardening at home. Others perform home maintenance and repairs (37%) and approximately one quarter (27%) entertain guests in the home.
GfK’s research also finds that Australians are spending more time at home than any other country across the world with about 40% of the population working remotely. “Hybrid environments are driving increases to our lives at home, particularly around strong premiumisation and indulgence,” Khatri said.
GfK research shows that 44% of consumers say it is important ‘to indulge or pamper myself’ on a regular basis. This sentiment has led to an increase in purchases across areas like entertainment and health led by 5G smartphones (up 2,680%), air fryers (up 184%) and juicers (57%).
“For higher-spend items like food processors, dishwashers, ovens and fridges, consumers want to be educated and inspired in-store. However, when it comes to smartphones, laptops and fitness wearables, consumers generally go into the store knowing exactly what brand/model they want. The opportunity there is to upsell them on accessories like cases and extended warranties,” he said.
From data to decisions
In organisations across Australia, data accessibility is a major issue. According to GfK research, only one in four marketers are ‘very confident’ in the data systems they use to win and retain customers. While 85% of marketers say direct access to customer data is critical to gain a competitive advantage, only 9% of marketers say customer data is highly accessible.
What’s holding them back? Budget, systems and processes that connect data silos and talent to move from data collection to action. GfK research shows that once marketers have data, gathering actionable insights is slow. Only 18% of marketers say they can move quickly from data gathering to actionable insights.
According to GfK’s research, high-performing organisations change their mindset on data and what it can do for their business, create an almost frictionless system to access data, access real-time information and hire the right people and invest in the best tools.
Finding opportunities, not excuses
Khatri believes now is the time not to make excuses but to drive actionable insights from trends.
“It’s time to understand deep consumer values and pivot. When met with macro-economic trends that create a ‘doom and gloom’ scenario, remember home is the headquarters,” he said.
“In relation to stock issues, focus on a particular retailer or channel strategy and review promotional frequency and depth linked to events. Shipping costs are coming down when compared to what they were last year, and raw material costs are also decreasing.
“Find opportunity in understanding and using values as foundations for your brand strategy. When data leaves you feeling overwhelmed, create a roadmap for improvement that balances human intuition with data intellect.”