SKIMspiration blog

What revenue management teams need to know about shifting consumer behavior in EU

After years of inflation, shoppers are becoming resistant to price increases. If you’re responsible for CPG / FMCG brands, you’ve likely seen consumers jump ship and are feeling the pressure to dial up promotions to increase sales this year.  

But promotions are expensive and can take a big bite out of your profits.   

So how can you create the right promotion strategy to entice consumers back to your brand, without sacrificing your bottom line? 

The key to optimal promotion strategies which drive incremental value is understanding and predicting consumer behavior. The SKIM revenue management practice recently conducted new research to explore these shifting price perceptions in Europe. 

Read on to learn these insights and uncover the promotional “sweet spot” that creates a win-win-win for your company, retailer and consumer.  

New insights on AI reveal consumer preferences, concerns and marketing implications

At a time when generative AI promises revolutionary change across industries, the pressing question is not about the capabilities of AI. Instead, you’re probably asking:

How can we best use AI to increase brand value and enhance the consumer experience?

How can we specifically and strategically leverage these capabilities to gain a competitive edge?

How AI can enhance creativity, quality and efficiency in research now

Artificial intelligence is already redefining the norms of data collection and analysis. The technology is surely critical to the continued success of research professionals in delivering precise and actionable insights.  

However, what’s possible now? How and where can you tap into the power of AI to enhance research outcomes this year?  

In a recent webinar, SKIM’s AI expert Nino Hardt and FMCG Director Jessica Rainalter revealed six real-world examples of AI in practice across market research.  

How to increase motivation with psychology

Are your product claims and visuals compelling enough to attract, connect and convert consumers?

At IIEX Behavior, Unilever Hair Claims Expert, Sophia Moghadam, shared how the company lifted its claims win rate by 30% by using a proven formula based on consumer psychology. In the session, she explained the revitalized process Unilever followed to improve the effectiveness of brand claims and visuals. Sophia was joined by SKIM’s Brand Communications Lead, Dr. Nikki Westoby, who revealed the secrets to crafting winning claims and the science behind the proven guidelines.

Read on to learn how Unilever used consumer psychology to create product content that converts, and get inspired for your brand communications.

To achieve sales and marketing goals, brands need to know how customers make purchase decisions. But another key element of the consumer journey is often overlooked: the post-purchase experience. KitchenAid, a premium kitchen appliances brand, knew they needed to look beyond the point of purchase to uncover opportunities to build customer loyalty and grow their business globally. 

KitchenAid had previously done some shopper research focused on the US, but needed to expand their knowledge and action plans globally, and recognized that a lot has changed in the way people shop and use appliances since they did their initial research, pre-COVID. 

How could KitchenAid make sense of “messy” consumer journeys and experiences and uncover new opportunities to delight their customers?

Edrington UK is the sales, marketing and distribution business of internationally renowned spirits company, Edrington. The company’s portfolio includes beloved whiskies and cognacs such as The Macallan, The Famous Grouse and Jim Beam. When the pandemic disrupted consumer behavior and paths to purchase shifted more towards digital channels, Edrington needed a data-driven approach to understand the changes and help prioritize its marketing strategies.

How could Edrington adapt to new shopper journeys, and optimize marketing effectiveness to drive growth in traditional and digital channels?

At Quirk’s London, Edrington UK’s Senior Consumer Insights Manager, Rebecca Ramsay, shared the company’s challenges and outcomes from delving into the new path to purchase. Joining her on stage was Stephen Scales, Director, who led the project at SKIM. Stephen detailed the insights and activation approach used, including the decision journey methodology and how our team helped create impact on Edrington’s future marketing strategies.

If you’re facing similar shifts in consumer behavior and shopper journeys, Edrington’s success story is enlightening and inspiring. Here’s a recap of their talk.

TL;DR

• 32% of consumers have cancelled a digital entertainment or fitness subscription only to rejoin later
• Nearly 1 in 10 survey respondents cancel because they could not pause
• Providing pausing options can continue the relationship with the consumer and makes it more likely for consumers to rejoin, or reactivate

In a recent survey of digital entertainment and fitness service subscribers, 72% of respondents considered these subscriptions to be discretionary spending. In an era of high inflation and fierce competition in the digital subscription space, it’s important to explore what’s driving consumer behavior related to churn: 

• Why are consumers cancelling subscriptions to digital entertainment and fitness services? 
• What do consumers expect from their experience with digital subscription services? 
• What does it take for consumers to rejoin after cancelling their digital subscriptions? 

Knowing these insights is key to helping your subscription marketing strategy and to decreasing customer churn. 

The changing nature of health information behavior is challenging pharmaceutical and medtech companies and their insights approaches.

Do you feel the same need to go “beyond the obvious” – the surface – of how patients engage with health information?

The health information behavior framework reveals behavior and unmet needs in more depth and detail than ever before. Drawing from a rich well of academic research, it illuminates the patient experience, as well as the influence of health information on medical decision-making along the patient journey.

Over the past few months, we introduced the marketing implications of health information behavior and discussed the impact of health information behavior on patient experiences.

In this blog, we reveal the practical applicability and outcomes of the health information behavior framework, including the actionable insights pharmaceutical and medtech marketers need: patient types, information tipping points, preferred sources and channels, unmet needs, as well as other potential marketing opportunities.

Read on to learn of two real-world examples of how marketing teams in the dermatology and oncology indications leveraged health information behavior insights to reveal the what, when, why, and to what end patients engage with health information. Discover how this new level of behavioral insights can help you better define strategies which could positively impact the patient journey and medical decision-making.

In the past decades, high inflation rates mostly only challenged smaller, troubled economies like Argentina, Venezuela or Turkey. But with CPI prints now topping 9% in the US and the UK, and 10% on average for the 38 countries in the OECD, inflation now touches us all. And it’s not going away anytime soon.

As vulnerable consumer segments reach the limits of their wallet and more affluent consumers start to feel the squeeze as well, your company is likely struggling to maintain margins and please shareholders.

So, what can you do about this?  In this article, you’ll learn a three-step process to mitigate the effects of inflation on your business. We share proven strategies our clients have adopted to successfully tackle inflation.

TLDR

• Understanding generational differences in subscription behavior is critical to success with FMCG subscription marketing and channel strategy.
• Millennials have more subscriptions than any other generation.
• 80% of Millennials said they subscribed to make their life easier.
• Millennials use introductory offers and often stick with a subscription after being gifted it.
• Keeping Millennials requires a subscriber-centric strategy that includes a subscription hopping portfolio.
• SKIM uncovered insights about subscription use, attitudes, and expectations with 16,000 consumer interviews in five countries.

Whether we are struggling with personal health issues or going through a global pandemic, health information is crucial to modern life. Health information underlies many, if not all, decisions made by both healthcare professionals and patients in the healthcare setting, particularly when it comes to decision-making on treatments.

Healthcare decisions don’t take place in a vacuum. They result from different factors like individual characteristics, the context of a specific health condition, the availability of knowledge, etc.

Therefore, there is great variety in the degree to which people want to know about their health condition, engage with information, and participate in healthcare decision-making processes. This spectrum of behavior can be explained by the notion of health orientation and health information behavior.

How can pharmaceutical companies improve outcomes by exploring this behavioral spectrum?

For CPG brands and retailers, the subscription model offers tremendous opportunities for recurring revenue and consumer connection. But what is fueling consumer choice in the subscription economy, specifically for FMCG products, and how can brands capitalize on it?

It’s tempting to assume that consumers choose product subscriptions primarily to save money (think Amazon’s Subscribe & Save). However, our Subscription Lifestyle research revealed otherwise: in almost every category, consumers, especially those with multiple subscriptions, valued other subscription benefits more than a lower price.

Do you know what drives consumer choice for product subscriptions in your category? Is it convenience, cost, quality, or surprise? Getting it right is critical for your Go To Market strategy.

Our latest research explored consumer behavior and attitudes towards subscriptions across a variety of CPG categories. The results have revealed some surprising factors driving consumer decisions in these categories.

Read on to learn what subscription benefits consumers value most and the marketing implications for your brand

Have you ever opened your door and wondered: “What is in the package that just arrived?” Not since the early days of Netflix, when those red envelopes containing DVDs arrived in the mail, have so many consumers been confronted with a huge question mark at their doorstop.

This shopper phenomenon has been caused by an explosion in digitally enabled subscriptions for nearly every imaginable FMCG and Direct to Consumer category, combined with the popularity of Amazon Prime Subscribe and Save.

How is your company tackling the subscription economy? Do you know how the subscription lifestyle is impacting shopper journeys in your category?

Perhaps your team is already experimenting with a direct-to-consumer offer, or maybe you’re in the early stages of mapping out your subscription strategy.

Either way, it’s important to understand exactly how subscriptions are shifting consumer behavior and perceptions.

Read on for our latest insights on the ubiquity of the subscription lifestyle and five issues your team will want to address to succeed in this channel.

In the early days of COVID-19, the head of the World Health Organization stated it was not only fighting a global pandemic, but also an ‘infodemic.’ Since then, COVID-19 has made it painfully clear that timely and trustworthy information is of vital importance to public and individual health, especially when inaccurate or misleading information is on the rise. Whether tackling a global health crisis or battling personal health issues, credible health information is paramount.

If you work in the pharmaceutical or med-tech industries, you know too well how health information, as well as communications and channel strategies, are of greater importance than ever before.

The role of empathy and surprise in consumer interactions

Market changes are constant and inevitable. Your competition isn’t slowing down, and you must react quickly and strategically. When information and innovation travel fast, the costs of a late response are high.

Like many marketers today, you’re forced to make fast decisions and quickly adapt brand strategies.

How can you ensure your communications, products, and services deliver on your brand promise – surprising and delighting consumers?

Mistakes may be inevitable when it comes to consumer experiences, but how can you best rectify them?

We recently conducted research to answer these questions and explore the role of emotions in consumer experiences and decision-making.

Why consumer health brands need a more advanced analytics approach to decision journey research

The consumer health shopper journey is a particularly complex one. As with traditional FMCG products, the shopper journey for consumer health products is a labyrinth of channels and touchpoints. It’s never a linear decision-making process.

However, as a consumer health marketer, you face additional challenges when trying to untangle messy decision journeys: understanding the unique role of healthcare providers and their influence on the path to purchase.

How can a global organization improve strategic decision-making, align all stakeholders around an action plan, and accelerate deployment?

These were the exact questions Danone faced last year in its plant-based acceleration unit of the specialized nutrition division.

As one of the top global food companies, adapting to changing consumer behavior is always a key challenge for Danone. Consumer demand was rising for plant-based products. Danone wanted to continue to grow infant nutrition by leveraging plant-based assets from the company. Danone’s global strategy and insights team saw an opportunity to use business wargaming to help accelerate strategic decision-making and growth for its plant-based portfolio.

Business wargaming is a data-driven, agile decision-making approach that helps companies make faster and more holistic and bold decisions.

I recently sat down with our clients at Danone to discuss their new approach for agile, cross-functional and collective decision-making. Read on to learn how Danone used business wargaming to transform strategic decision-making and lead the business into a promising new market. 

How organizations can turn “intent” to act sustainably into “action”

Consumers are becoming increasingly vocal about a need for sustainable change in society. While it is encouraging to see this growth in people’s intent to act and buy more sustainably, their actual behavior is lagging.

How can organizations help inspire this behavior? Through consumer psychology, SKIM’s psychological distance framework can help explain why this lag is happening and offer tangible communication guidelines on how to turn intent into action to build a more sustainable world.

A fun and holistic process that uncovers the right decisions FAST

“More data, more problems.” That’s how a Product Insights Lead recently described to us the reality many brands face when it comes to making decisions today. Holistic, data-driven decision making is more complex than ever before, thanks to a variety of competing realities:

• Business intelligence is often siloed in different departments and data sources
• Different data sources may give conflicting insights
• Stakeholders have differing concerns and perspectives
• The competitive landscape may not be well understood
• Decisions need to be made quickly in response to changing markets and priorities

These realities impede your ability to make the best decisions to achieve your company’s goals.

So how can you bring together various data sources, information, insights, and stakeholders to make holistic and agile decisions?

Given today’s increasingly green-washed competitive landscape, it’s difficult to stand out, remain relevant, and drive consideration and conversion at the same time. Optimizing product sustainability communications is one way to help your brand achieve these simultaneous goals.

There is also an inherent conflict many marketers face when developing sustainability-related messaging: Sustainable products and services primarily benefit society in the long-term, rather than individual consumers in the short term.

How can brands reconcile this conflicting duality between personal short-term goals and broader long-term goals? How can your brand best provide product sustainability information to consumers in an authentic and impactful way?

Uncovering more accurate and actionable consumer decision journeys

Nearly all consumer decision journeys have shifted over the past year – new journeys have emerged, while others have been reshaped.

You may be wondering how to best drive consideration and purchase of your brand. For many of our clients, the answer lies in untangling the messy omnichannel decision journey.

With an abundance of online and offline triggers, touchpoints, transitions, and interactions, that means an equal number of paths-to-purchases for consumers. How can you gain clarity here and take action to influence their decisions?

Psychographics offer brands valuable, but often overlooked, clues about how consumers make decisions online.

When looking to understand and influence the online shopper journey, there is often a tendency to focus on touchpoints, like social media, reviews and online retailers. However, there is another alternative view of segmentation digital marketers could consider – psychographics.

Because consumer journeys are highly personal – as they are dependent on traits, habits and context – consumer behaviors aren’t homogenous. Psychographic segmentation (personality traits, beliefs, values, etc.) can add another level of accuracy to predicting online decision behavior. Your digital marketing strategies and spend could be more impactful, generating greater online conversion and loyalty, when truly customized to “best fit” your audience.

Read on to learn how different personality traits can affect online decision making. Understanding and applying these insights can give you a competitive edge to ensure consumers choose your brand online.

2020 has seen a significant acceleration in the digitization of healthcare. Telehealth, in particular, is playing bigger role than ever before – impacting patients, healthcare professionals (HCPs), hospitals and pharma companies alike. To explore the effects and implications of COVID-19 on pharma marketing strategies, our healthcare team conducted research on how patients experienced this change to a more digital health system.

How do you best develop compelling B2B messaging that will motivate customers globally – in a crowded online marketplace?

Such was the challenge Google faced when it set out to improve its marketing communications for retailers last year – to make its messaging approach more consistent across its various channels.

In preparing for a global retail marketing campaign, Google realized it needed to make it easier for retailers to understand what the company could offer and why they were the best partner to help them grow.

Why do people choose one product or service over another? What needs or objectives are tapped into when you consider buying or recommending one brand over another?

Whether your brand targets consumers or professionals, understanding how decision behavior works and systematically applying its principles can help you build more effective strategies to drive customer acquisition, brand loyalty and continued growth.

We recommend you tap into “habitual” behavior to reinforce positive habits or break the ones that don’t benefit your brand and analyze “deliberate” behavior to assess how, where and when your brand can intervene.

Here we explain how decision-making works and the behavioral steps that are involved in making choices. Read on to learn how leveraging these insights to reinforce or disrupt habits can help your brand grow.

Online service providers have enjoyed a boom in sales over the past several months. Consumers have either increased their consumption or have been forced to try services ranging from media streaming and online subscriptions to food delivery apps.

As we gradually return to “normalcy,” many companies are wondering: which services will consumers continue to subscribe to, and which will be abandoned? Will these new habits stick?

The context for decision-making in the healthcare industry has been thoroughly disrupted – from patients navigating the world of telehealth to HCP’s increased reliance on online channels for knowledge gathering.

Despite this rapidly evolving environment, your mission as a pharma marketeer, continues: to enable value creation and product differentiation and empower both physicians and patients for improved outcomes. However, to do so effectively today, you need to understand how patient journeys are changing, and what new needs have emerged. Only by understanding the nuances of these shifts, will you be able to effectively adapt your marketing, communications and/or innovation strategies for greater impact now and in the long term.

People are poor predictors of their own behavior. Context changes corrupt their intentions. A context change may be as simple as a product discount, or as complex as a severe crisis. In both situations, the question is whether behavior changes, and particularly whether it will subsequently stick. We argue that, after the current crisis only a few new routines will establish. Trend lines from before a crisis will be similar after the crisis, maybe somewhat mitigated or accelerated.

Here we reflect on past crises and share 3 pitfalls consumer brands should avoid in preparing for the recession.

The digitalization of pharma was slowly underway pre-COVID, but there’s an immediate sense of urgency to make this shift now. As face-to-face sales calls are still a no-go, pharma companies are racing to accelerate their online sales and marketing strategies.

HCPs’ habits have been radically disrupted. Their attitudes, practice behavior, decision-making processes, and prescribing habits have changed. New needs are emerging.

As a pharma marketer you know you need to revise and reshape your multichannel strategy to these behavioral shifts, but restructuring to a digital-first communications strategy is much easier said than done.

The current crisis has triggered many changes in consumer behavior. Some of these behavioral shifts are obvious, for example, the growth in online shopping. While others, such as the impact on price sensitivity, are less certain. You may be wondering:

Should I conduct pricing or portfolio research now? Can I rely on study results in this rapidly evolving market?

The ultimate answer to these questions depends on whether you have the right information to inform your decisions.

Much has been written about social distancing and the immediate impact on marketing across industries. You have likely already adjusted your short-term communication strategies. However, as you map out your long-term plans, much can be learned from the concept of psychological distance as it relates to recent events.

In this article, our Senior Vice President of Brand Communication explores how psychological distance played out during the early stages of the COVID-19 global pandemic. Reflecting on why Western countries responded differently to the crisis than certain Asian countries, helps understand how human decision-making works. Read on to learn more about the theory and how it could relate to you as a professional and as a human.

The COVID-19 crisis and the Corona crash are shaking the context for consumer decision behavior. As a result, the context for net revenue management (NRM) has also been disturbed for consumer goods companies.

Companies must adapt revenue strategies to the new situation, at the same time as consumers are adapting to “the new normal.” To be successful, you need to anticipate and influence consumer decisions in a changing environment. This holds true in times of normalcy, but especially during the recession to come.

Although the COVID-19 crisis is not yet over, learnings from previous crises and knowledge of consumer behavioral frameworks mean we can map out consequences for net revenue management strategies.

So, what should you consider in planning your next moves?

COVID-19, stay-at-home guidelines and in-store shortages triggered and forced a dramatic change in consumer habits and choices. A massive acceleration in online behavior is one of the most visible changes. Whether the choices that consumers make during the COVID-19 crisis become a new habit or not, understanding online consumer behavior will be increasingly important in the future.

We recently hosted a webinar where we explored what the new normal may look like and what eCommerce actions you should consider.  or read on for three proven eCommerce strategies that can drive online engagement and conversion.

Consumer behavior is usually embedded in daily habits; sometimes consumers make more deliberate decisions. COVID-19 triggered a dramatic change in the context of consumer decision making: Many daily habits have come to an abrupt halt; more decisions are now deliberate.

Your company is probably feeling the immediate impact of these behavioral shifts and you may be charged with adapting short-term marketing strategies accordingly.

COVID-19 has radically changed the context in which we make decisions, disrupting many habits. No one can predict if the behavioral shifts will last or what the recovery period will look like.

Online shopping and media consumption will undoubtedly continue to grow (as it was pre-COVID-19) … but to what degree? Will brand-loyal consumers who switched brands due to limited stock eventually return?

FMCG revenue professionals are challenged with creating a win-win-win situation: Provide consumers with the right product at the right price, create value with retail customers in challenging times, all while delivering top and bottom line growth. And all of this while working within legal limits in countries that prohibit resale price maintenance.

Leading consumer goods companies are increasingly adopting a net revenue management (NRM) approach to tackle this challenge. By applying a structured approach to analytics and encouraging open-mindedness, companies like Unilever are maximizing their net revenue and profits.

A real-world market research case study with Big Data

The market research industry is no stranger to consumer data. However, the scale of “Big Data” generated through online behavior brings a host of challenges and opportunities for insights professionals and marketers alike. As consumers leave an endless supply of digital breadcrumbs online, how can we most effectively analyze and act on this behavior at the individual level?

Such was the challenge ArchDaily.com faced after amassing 20 terabytes of Big Data over the past three years. As the leading architectural website worldwide, interpreting this data was much more complicated than it had anticipated. With 150-200 million-page views a month, the company could see behavior volumes. However, ArchDaily.com didn’t know what was driving user behavior. It wanted to better predict architectural trends for and identify key drivers to optimize its online content strategy.

Exploring a virtual shelf approach to launching a premium brand

In 2018, Nestlé signed a $7.2 billion deal to market, sell and distribute Starbucks’ packaged products outside of the company’s cafes, providing Starbucks at home. With high brand recognition, Starbucks would clearly make an impact at the coffee shelf. However, one of Nestlé’s European insights team saw an opportunity to rethink the crowded grocery store shelf to drive even more growth – for Nestlé and its customers.

Albert van Meeteren, Nestlé’s Head of Consumer and Shopper Insights and Analytics, wanted to see how they could best launch Starbucks in a “new and innovative” way in Dutch supermarkets by focusing on in-store execution.

Exploring voice analytics in new product development research with Johnson & Johnson

Have you ever conducted early-stage innovation research and found yourself in a situation where you don’t entirely trust what consumer feedback is telling you? Many of us have had to deal with overstated interest and the need to dig deeper into unmet needs.

Uncovering both rational and emotional needs is vital for new product development (NPD) strategies – to accurately size the unmet need or opportunity for innovations. However, what is the best insights approach?

Exploring a data-fusion approach for holistic pricing decisions

Whether you’re introducing a new SKU or reacting to a market change, managing your pricing strategy can often feel like a complicated balancing act. You know solid revenue decisions should be grounded in sound data, but that input often comes from a variety of sources and stakeholders.

From clicks to cart: making smarter use of product images

In today’s crowded online marketplace, we all face the same challenge: how do we attract and convert shoppers? While increased media spend is an almost guaranteed way of attracting more people to an online platform, getting them to actually buy is a whole different ball game. Many online retail giants aren’t forthcoming with behavioral data, so knowing how visitors think and behave from the time they land on the platform until they check out, is a blind spot for many of us.

Understanding decision-making and choice overload in crowded markets

In today’s highly competitive telecommunications market, consumers face an abundance of choices online. To thrive in this environment, your product portfolio strategy should be optimized based on how decision-making is changing. You need to know how customers identify the best carrier and plan for their needs. And that’s where the most accurate customer and market insights can help.

Exploring expert views on AI and the role of ‘stats’ in market research

Machine Learning (ML) is everywhere, from social media and virtual assistants to financial services and data security. For sales and marketing professionals, machine learning offers unprecedented analysis of big data. It holds the potential to decode increasingly layered buyer journeys. However, does machine learning truly have a role in market research, a field where we rely on analytical methods to understand nuanced and complex decision-making? Or, is statistical thinking still the essential analytical element behind the insights we deliver today?

Launching a premium product means convincing consumers to trade up, without driving them to the competition.

This is the exact challenge faced by the Global Insights Manager at a best-selling charcoal brand as she prepared to launch two new premium products.