The goal of winning over customers to get them to buy your product is as old as commerce itself. Yet, a lot has changed in the intervening centuries, and even more so in just the last few years as the pace of technological change has moved more transactions online and altered consumers' expectations for more personalized and convenient service.
As retailers retool their conversion tactics for modern times and modern consumers, here are 3 trends Afterpay has seen from its own research and interactions with customers that are impacting consumers' buying behavior and their loyalty.
1. Authentic over aspirational
Aspirational marketing where ultra-slim models and celebrities are a focal point is past its heyday. Today, consumers are looking for authenticity and inclusivity. Body positivity is in, as is diversity – and so are the brands who are embracing the move toward being more authentic and inclusive.
"We have a responsibility to our customers to ensure everyone feels valued, and for us, diversity isn't just a marketing strategy, it's more an integral part of everything we do both internally and externally," noted Alexander Meyer, chief marketing officer for The Iconic, in a report by The Future Laboratory.
Authenticity is especially important for Generation Z – 63% say they prefer to see real people in ads versus a celebrity. And, consumers also want those ads to showcase more diversity. In Adobe's Diversity Advertising Report, nearly a quarter of respondents said they were more likely to purchase products and services from brands with diverse advertisements. A similar number of consumers (21%) said have boycotted brands that lack diversity in their advertisements.
2. Flexibility is fundamental
Flexibility reduces friction and increases personalization. It gives people the ability to choose the most convenient way to shop – whether that's direct to consumer (DTC) or via their favorite social media app, such as Facebook Marketplace or Instagram, or even in-store. Apps like Depop are also growing in popularity because they offer the flexibility to buy or sell as well as connect with different people and different types of fashion.
As one Depop user, Kalle, a 20-year old from the UK, commented, apps like Depop have become "massive really quickly," because they make it possible in a convenient way to have lots of flexibility to "connect easily and quickly with loads of different people selling lots of things."
Another trending area for greater flexibility is in payments. Many consumers are looking for ways to gain additional flexibility in how they pay for purchases so that they can better maintain their financial wellbeing on their own terms. As such, flexible payment options like buy now, pay later are becoming increasingly popular.
"Having a buy now, pay later option at checkout is a big selling point,” said Kelly Sullivan, an Afterpay customer. “Some high-quality products are expensive but worth the money. I would rather purchase a product that will last, rather than a cheap product that won’t stand up. I save money in the end by buying better quality items.”
And she's not alone. In a report by Payments.com, 87% of buyers ages 22 to 44 are interested in having the flexibility to break large purchases into monthly installments.
“Sometimes emergencies come up. Having the ability to get what I need and spread the payments over the course of six weeks gives me peace of mind and helps me manage finances in a responsible way. It becomes a small amount I can fit into my budget rather than a huge hit financially,” explained Sullivan.
3. Be innovative
Innovation has always been essential for brands when it comes to bringing new products to market. But there is more pressure and more opportunity now for brands to innovate in other ways, such as how they engage with consumers and the types of experiences they deliver.
This can take the shape of providing more of a blended physical-digital experience through new tools such as virtual reality and augmented reality. This also caters to many Gen Z's preferences to balance the online experience with a more human element.
"Online shopping is becoming much more powerful, so this ability to virtually try things on and shopping online itself is becoming more important," explained Sammy, a 20-year old consumer.
Another way to innovate is with your loyalty and rewards programs. Those that have used innovative tactics, have seen great results in customer loyalty. Tapping into the previous trend of flexibility, brands like The North Face and Sephora have been wildly successful using flexibility as a key aspect of their loyalty programs to garner more loyalty and more sales. Sephora's loyalty program now has more than 17 million loyal members, and members make up as much as 80% of Sephora's annual sales. Afterpay, is also innovating with its loyalty program, launching an invite-only program.
Modern times call for modern solutions
As retailers continue to face a tumultuous and highly competitive environment, there's an imperative for them to not just stay with the times, but even get ahead of them. To do so requires keeping a close watch on their youngest buyers and taking note of what's important to them – and then innovating and pivoting to meet those expectations.