Retail Disrupted: Episode 1
IN CLEAR FOCUS: The first in a series of podcast episodes accompanying Bigeye’s 2021 study, Retail Disrupted: What Shoppers Want From Brands Today. Based on a national survey of over 1,500 US shoppers, it’s clear that consumers are demanding more from retailers than ever before. In this pod, we explore key data points from the report with retail futurist Doug Stephens and influencer marketing expert Paige Garrett and discuss what the findings mean for retail and direct-to-consumer marketers.
Adrian Tennant: Welcome to the first in a special series of podcasts accompanying Bigeye’s national study, Retail Disrupted: What Shoppers Want From Brands Today.
Doug Stephens: Shopping, as it applies to food, is an incredibly entrenched behavior. The average in the United States is 2.2 visits per week to the grocery store.
Paige Garrett: Influencers are like the new version of reality TV, we see their struggles, we see their successes, and then we see what they use throughout their day to make them better.
Camila Swanson: I see photos with a broader range of body shapes and sizes more often. Plus size influencers have really created this push for brands and holding them responsible for showing more body shapes.
Adrian Tennant: You’re listening to a special episode of IN CLEAR FOCUS. Fresh perspectives on the business of advertising, produced weekly by Bigeye. Hello, I’m your host, Adrian Tennant, VP of insights at Bigeye, a full-service, audience-focused creative agency, we’re based in Orlando, Florida, serving clients across the United States and beyond. Thank you for joining us. Last month, eMarketer published data that illustrated just how much the pandemic accelerated the adoption of online grocery shopping in 2020, the number of digital grocery buyers in the U.S. increased by more than 39 million. By the end of this year, that number will surpass 142 million amounting to more than half the U.S. population – 52 percent – for the very first time. Corporations like Kroger, Walmart, Target, and Amazon with their finely tuned e-commerce platforms and logistics operations did well during the pandemic, but for less well-prepared retailers who were struggling even before COVID, things went from bad to worse. Fitch Ratings has reported that more than 100 regional shopping malls will be shuttered in the next five years with department stores like Macy’s and Sears closing down many of their locations. At Bigeye, we wanted to understand how shoppers’ behaviors have changed and to learn what they want and expect from brands today. So in August of this year, we conducted a national survey of over 1500 shoppers aged 18 to 55. In today’s podcast, we’re going to explore some of the data points from the study and what they mean for retail and direct-to-consumer marketers. In spite of changed consumer behaviors as a result of COVID, across all respondents and all categories, most people express a preference for shopping in-store, 44 percent. Over one third are equally happy to shop in-store or online And just one fifth say they prefer to shop online. Among respondents who shop for these categories, the most popular preferences are to shop in-store for food and drink at 61 percent followed by furniture and homewares at 51 percent, and clothing, shoes and accessories at 45 percent. Gen Y respondents, those born between 1980 and 1995, are the most likely to prefer shopping online and in-store equally for electronics and accessories, pet care and supplies, and baby and kids products. The categories respondents are most likely to prefer shopping for online are hobbies and sports and electronics and accessories. So, what is it that appeals most to consumers about shopping in-store? Well, almost 9 in every 10 shoppers say that their ability to see, touch, feel, smell, hear, or try on the product in a physical store, add value to their experience, to a great, or to some extent, 89 percent. 4 in every 5 shoppers indicate a preference for shopping in-store to access better prices or perceived value of products. Suggesting perhaps the consumers are growing weary of shipping costs associated with some goods purchased online. I asked retail futurist Doug Stephens, the CEO of Retail Prophet, why he thinks respondents indicate a preference for shopping in-store for food and drink in particular.
Doug Stephens: The truth of the matter is shopping, especially as it applies to food, is an incredibly entrenched behavior. You know, I think the average is in the United States, for example, about 2.2 visits per week to the grocery store to shop. And so, this is something that we probably shop more frequently for than anything else in our life. So it’s not surprising that this sort of heavily entrenched habit would take some time to modify. but the flip side is we have to appreciate that change doesn’t need to be absolute in order to be significant. We have a tendency to always focus on the bigger number, right? So we’ll say, you know, “Only 15 percent of the retail economy in the United States is e-commerce. Everything else, you know, 88 percent is purchased in-store.” And that may give a lot of retailers a sense of consolation but the fact of the matter is it wasn’t that long ago that that number was one percent and today it’s 15 percent. And we know that e-commerce is growing exponentially faster on a percentage basis than physical retail is and so it’s quite likely that at least our projection is by as early as 2033, we may find that 52 or more percent of our consumption on a daily or weekly basis is being performed online and, or by subscription. Why do I say this? Well, it’s not just pulling a number out of thin air. We know that in 2002, 2003, the Chinese economy had virtually no e-commerce as a component in the retail sector and through the pandemic, they crossed the 50 percent mark. You know, so we’re talking about a couple of decades, for an entire nation to buy most of its consumption online. So, on the one hand, I’m not surprised. Of course, consumers will say that they enjoy going to the grocery store. And frankly, grocers haven’t provided them with any sort of incentive, not to, by virtue of a great online experience. But I think what we have to focus on is the potential for that number to increase significantly. And it will.
Adrian Tennant: Almost three-quarters of Gen Z, those born between 1996 and 2012, say that the ability to shop with friends as a social activity adds value to their experience at 74 percent compared with 62 percent of Gen Y and one half of Gen X, those born between 1965 and 1979. Gen Z respondents are the most likely to say that discovering products they’ve not found or seen online adds value to a great or some extent when deciding to purchase in-store. When it comes to shopping in brick and mortar stores, 83 percent of all respondents say they pay some attention to visual signage and photographs. Across all generations around one-third of respondents assessed that they often pay attention. Gen Z respondents are the most likely to always pay close attention at 30 percent compared with just over one-fifth of Gen Y, 22 percent, and 16 percent of Gen X. Of those who always pay close attention, respondents identifying as Hispanic are 13 points more likely at 32 percent than non-Hispanics to do so. With just one point separating them, respondents who work in the retail industry are not more likely than people in other industries or professions to pay attention to store signage and photography. Thinking about the content of photography featured in-store merchandising and displays, just over one-half of all respondents say they’re seeing a broader range of body shapes and sizes compared to typical models, 51 percent and one-half are seeing more racial and ethnic diversity in photos of people. In all cases, Hispanic respondents reported seeing these visual elements more often. 61 percent also say they’re seeing more racial and ethnic diversity in photos of people compared with 48 percent of non-Hispanics. Similarly. Well, over one-half of black or African-American respondents say they’re seeing more racial and ethnic diversity in photographs compared to less than one-half of white respondents, 48 percent. Bigeye interns, Jorge Sedano and Camila Swanson and Camila’s mom, Nidia, all of whom identify as Hispanic, share their in-store experiences.
Camila Swanson: I often pay attention to these just because since COVID-19, there is still some stores that aren’t opening their fitting rooms, so it would be nice to see someone modeling clothes that’s close to my size or has the same body type as me, because then I would get an idea of maybe what size I should get in a certain pair of pants and kind of see if they’re stretchy, if they fit slim. So I would definitely say that I often pay attention just because it can make the shopping experience a little bit easier on my end.
Nidia Swanson: I often pay attention to how the clothes look on the model, you know? And I made the decision if I go in to buy it or not.
Jorge Sedano: Compared to before the Black Lives Matter movement, are you seeing greater racial and ethnic diversity in photographs of people in visual ads displayed in-store?
Nidia Swanson: About the same, but it’s important that young people see someone that looks like them in their advertisements. So they get used to it, so they don’t feel like less than other people.
Camila Swanson: I have noticed that in Sephora, they have created advertisements that show more racial and ethnic diversity. For example, they did a photoshoot with a influencer that went popular on TikTok, that is Native American. And they had like a giant billboard of her in the store and I don’t think I’ve ever seen a big brand like Sephora endorse products using Native Americans as one of their target audiences.
Jorge Sedano: I have a lot of experience in retail. I’ve actually been working retail since I was 16 and I want to say that I have noticed a type of change in the race and the ethnicity in the people on the advertisements. I’ve worked at Abercrombie, Disneyworld and New Balance and I can tell you like, and that’s an opinion that I have been able to see these changes in advertisements. And what about photos showing a broader range of body shapes and sizes compared to typical models?
Nidia Swanson: Yes. I see them for example, in plus size. You can see it more. Like when I was growing up, you don’t see it that much. Now you see it more like in really, really retail store you see in the, either on the internet or in the magazine, you see the plus-size model more often now.
Camila Swanson: I would say I would see photos with a broader range of body shapes and sizes more often. I think that more plus-size influencers on the internet have really created this push for brands and holding them responsible for showing more body shapes, just because not everyone is the same size. And it’s nice to walk past a store and see someone who looks similar to you and know that like that’s a brand that you can confide in to get certain products.
Jorge Sedano: I think it’s a big thing on social media as well that has influenced these movements in-store. And it’s definitely something that helps the consumer, because I think we’ve all been in a situation where we get maybe like a certain article of clothing that we see on the model. And then we don’t typically like the way it looks on us. So I think being able to see more body type closer to yours helps, to know what that article is going to look like on you.
Camila Swanson: So Jorge, that’s interesting, you are saying that what we’re seeing on social media is influencing what we’re seeing in stores.
Jorge Sedano: Because as a society, we are being more comfortable being in your own body, regardless of what you may think of what people looks like or what other people may think. And I think it’s very important for you to just be comfortable with yourself. And I think companies are learning that as well. They’re learning that we need to love ourselves first. If we’re able to see more of ourselves in these ads, we’re more likely to also buy the product.
Adrian Tennant: Influencer marketing is an important part of the social media ecosystem, representing an estimated $10 billion in sponsorship deals in 2020, more than one-half of all the consumers who responded to our survey follow social media influencers Those most likely to do so belong to Gen Z, among whom over three quarters follow at least one influencer. Gen Y respondents are less likely to do so at 58 percent and among Gen X, just under one-third, do at 30 percent. Respondents identifying as Hispanic, Latino, or Latinx or of Spanish origin are significantly more likely to follow influencers with three quarters doing so, 75 percent , compared with 47 percent among non-Hispanic respondents – a 28-point difference. I asked social media expert page Garrett, who’s assistant vice president of marketing with RVD communications in New York, what lies behind Hispanic followers’ greater engagement with influencers.
Paige Garrett: Hispanic social media users are looking to just connect. I think that, you know, like anyone, obviously, they are empowered consumers and also influential creators in their own right. But I do think that when it comes to this crazy time that we’re all coming out of, social media is a way to connect. It’s a way to stay up to date with our friends, our family, what’s going on in each other’s lives. It’s a way to stay in tune with what’s happening in a specific industry that you follow, news, celebrity, entertainment, and it’s just a way to stay hyper-connected and I do think that when it comes to influencers’ recommendations and the way that you as a consumer feel connected to that influencer, it’s very similar to getting a recommendation from a family member or a friend. But you might not be in as close touch with your family members or friends as you are now with these influencers who you follow every single day and every minute of the day. And there was actually a quote that came to mind from Marie Cabo, who is a fortune 500 multicultural strategist and consultant. She essentially said that the Hispanic community in particular, they have that sense of established trust when it comes to these micro-influencers that they follow in the same way that they would their families. So it’s very similar to, again, just that person that you trust who is telling you you need to buy something, that coupled with, whether it’s a discount early access or a VIP experience that you might not get otherwise. It’s that established trust and credibility coupled with the fact that you feel as if you really know this person. And also you might, you know, I think influencers are really engaging with their communities in a way that they are actually in touch with them and actually friends. And if you ask an influencer a question, they’re more likely now to respond than I think they would have a few years ago. So, all of that just works towards greater engagement with influencers in particular and it makes sense again, from more of just like a human connection, perspective for the Hispanic community as well.
Adrian Tennant: So, what do people expect from following influencers? Well, among those who do follow influencers almost one-half expect them to see how a product works or looks. 47 percent expect influencers to provide helpful tips on using products and 43 percent expect to discover new brands and products that they might not otherwise find. These were the top responses across all age groups. I asked Paige if these findings align with most clients’ influencer marketing goals.
Paige Garrett: Yes. Absolutely. I think that when it comes to establishing campaigns where there really isn’t an option in-store for people to touch, feel, experience, that brand or product in-person, leveraging influencers to do that is an incredible resource. And, I think that as consumers, that’s what we’re looking for. We’re looking for honest recommendations and beyond the recommendation, how does that influencer fit that brand or product into their actual everyday life? Influencers are like the new version of reality TV where we all have this inside glimpse into somebody’s life and we see their struggles, we see their successes, and then we see what they, use throughout their day to make them better, to make them feel better, whatever it is that specific brand or client is trying to achieve.
Adrian Tennant: Let’s take a short break. We’ll be right back after these messages.
Marissa Martin: I’m Marissa Martin on Bigeye’s operations team. Every week, Bigeye’s podcast IN CLEAR FOCUS explores how consumer behaviors are evolving as a result of COVID-19. From the influence of Generation Z, with its interest in social and environmental issues – to the fast-growing Hispanic market and the opportunity it presents – Bigeye interprets signals from primary and secondary research, identifying the trends driving consumer spending today – and those that will have the greatest impact tomorrow. If you’d like to put Bigeye’s research-backed, data-driven insights to work for your brand, please contact us. Email email@example.com. Bigeye. Reaching the Right People, in the Right Place, at the Right Time.
Adrian Tennant: Today’s shoppers are more informed, connected, and demanding than ever before. To examine how the rise of e-commerce during the pandemic has disrupted the retail industry, Bigeye recently conducted a national study with over 1500 consumers. Our exclusive report, retail disrupted: what shoppers want from brands today reveals that while people enjoy the convenience of online ordering and home delivery, many still prefer to shop in physical stores. But their expectations of merchandise selections, in-store technology, and customer service are all heightened. To understand consumers’ new shopping behaviors, and mindsets – and what they mean for retailers, direct-to-consumer marketers, and traditional brands – download the full, complimentary report available now at Bigeye dot agency slash retail. Retail Disrupted: what shoppers want from brands today.
Adrian Tennant: Welcome back. You’re listening to Retail Disrupted: what shoppers want from brands today. It’s clear that influencers do impact consumers’ purchasing decisions. In the past six months, 90 percent of respondents who follow social media influencers have bought a product after seeing it used, reviewed, or recommended. And over one-half of these followers report buying two to five times, 54 percent. Gen Y respondents are the most likely to have bought two to five times at 57 percent. 91 percent of Gen Z that following influencers have bought something based on a recommendation in the past six months with approaching one-fifth of them buying 6 to 10 times. Gen X respondents are less engaged overall, but just under one-half of them report buying two to five times. Respondents who identify as Hispanic are more likely to have bought 6 to 10 times in the last six months at 21 percent compared to non-Hispanics at 13 percent. They’re also twice as likely to have bought more than 10 times than non-Hispanic respondents. Let’s hear more on this from Camila Swanson and her friend Haroldo Montero.
Camila Swanson: Do you follow any social media influencers?
Haroldo Montero: Yeah, I would consider myself that I follow a few social media influencers. One of them that I really enjoy is MKBHD. He’s a tech YouTuber who reviews pretty much all kinds of technologies from the future of cars to like mobile devices, TVs, everything. So that’s like my favorite one.
Camila Swanson: Have you purchased something based on an influencer in the past six months?
Haroldo Montero: I have, it’s a pair of glasses actually. It’s from this YouTuber/influencer, I guess started his own clothing brand called Teaching Men’s Fashion. And yeah, he made his own like glasses company and clothing company. And I bought stuff from him, glasses, hoodie, and a shirt.
Camila Swanson: I actually follow Emma Chamberlain and I have actually purchased products from the company that she’s the creative director for. It’s called Bad Habit Beauty. But that’s the only time that a social media influencer has influenced me into purchasing a certain product.
Adrian Tennant: A characteristic of influencer marketing is its network effect. Over three-quarters of our survey respondents who’d purchased something based on an influencer, say they are extremely or somewhat likely to share information about their purchase with people in their social network, 77 percent. Gen Y respondents are the most likely to share information about their purchases with over four in five doing so Gen X is the next most likely with three-quarters of respondents in this group doing so followed by Gen Z at 71 percent. Four in every five respondents identifying as male report doing so compared with 74 percent of females and two-thirds of those identifying as nonbinary or other gender. COVID-19 has impacted everyone’s lives for over 18 months so we were curious to learn how people feel about influencers today compared to before the pandemic. Almost two in every five shoppers strongly or somewhat agree that compared to before COVID-19 they are discovering more new brands that they like from influencers’ posts, 65 percent, with respondents identifying as male being the most likely to report doing so at 71 percent. Approaching one-half of all respondents report that more of their buying decisions are based on influencer recommendations with those identifying as male, again, being most likely at 49 percent. And while family and friends have traditionally been important sources of information, 38 percent of all respondents say that when it comes to product recommendations, they trust influencers more than their friends. This is the case for 42 percent of Gen Z respondents and 47 percent of those identifying as male. I asked Paige Garrett why she thinks this is the case.
Paige Garrett: I don’t think that men had the same shopping habits as women, in the sense that, you know, we’re constantly talking with our friends about the items that we’re purchasing and sharing those recommendations, but even more so with influencers, because there is that established relationship, there’s a sense of trust. There’s a feeling like I know this person, that coupled with their recommendations, especially if they are an expert in whatever it is they’re sharing, is really helpful when it comes to finally deciding or taking that intent to purchase. So I think that that is kind of the secret sauce, and a lot of influencers will do some of that testing for their followers. So a lot of times we’ll see content that’s like, “I tried five different SPFs and this is the one that you need because you’ll get the most bang for your buck. And I tried the expensive ones and the less expensive ones.” It’s like, they’re doing a lot of that legwork. And that’s a lot of the content that we’re seeing coming out now where the way that influencers are recommending products is through that lens of, “I’ve tried them all. This is the one you need.” And I think, while, women’s shopping habits might be, we just share more publicly about them, I think for men, in particular, to be able to have that buy-in and that honest feedback from an established person who they follow and trust, I think it makes a ton of sense as to why they’re even more so trusting an influencer’s recommendation to that, you know, over their friends.
Adrian Tennant: But our study results indicate that people’s trust in influencers has actually decreased compared to before the pandemic. Over one-half of all respondents think that influencers are flaunting their privileged lifestyles while normal people have to deal with COVID and well over one-half of Gen Z respondents say that most influencers are inauthentic and motivated only by sponsorship money. Around two in every five respondents think that influences seem out of touch with the sentiment most pronounced among those identifying as male at 44 percent. 40 percent of all respondents report that compared to before COVID their trust in influences has decreased. That percentage is a little higher among Gen Y respondents 42 percent and well over one-half of those identifying as nonbinary or other gender feel this way. I asked Paige if she believes influences are aware of this kind of feedback and changing the content they produce in response.
Paige Garrett: I think that there are a lot of influencers who haven’t woken up to this just yet. But I do think the vast majority, at least the influencers we are working with have. I think that respect for themselves as humans, but also as creators and the respect that they have for their communities and what their communities might be going through, is definitely prevalent. And I think it’ll only continue to become more prevalent as we go through these next few months and years. I think that’s the direction that influencer marketing is going in. And I do think as well, that with COVID and it not being the time or the place for people to be sharing about, going to restaurants or traveling, or the expensive items they just purchased. It’s really thinking about how is your brand adding value into this person’s day as a consumer first? So thinking through that lens and working with the influencers that you’re, Collaborating with, to come up with a piece of content that feels really realistic for where they are in their life. And also, it feels really realistic for where their communities are as well because our influencers are in constant touch with their communities. And that’s where we kind of defer to our creators in the sense of: here’s our brand, here’s why we think, you know, as an individual, you will really value from what it is that we’re offering. but how do you see this brand fitting into your daily content? What are some conversations you’ve been having with your followers recently, especially during this challenging time, are there any trends coming up? A lot of our influencers have quoted mental health and, needing to establish more self-care rituals or set boundaries for themselves. And I think that really leaning into that, and inserting your brand into those conversations in ways that feel genuine is kind of where that secret sauce is. But I do think also just seeing, you know, influencers leverage their platforms to encourage folks to get the vaccine, or, opening up these bigger conversations, using their platforms to do that. It doesn’t need to be always about specific the product. It can be a mission behind a brand that happens to align with an influencer and that in and of itself will drive brand awareness and ultimately conversion. But I think sort of moving away from just pushing product and collaborating with influencers on what the bigger conversation or bigger picture is, and I think hopefully it’s the direction that influencer marketing is going in general.
Adrian Tennant: When we asked people to describe what they think retailers need to do to add value or improve their customer experience when shopping in any physical store, over one-half of the responses mentioned issues relating to customer service, 52 percent good and bad. Seventeen percent of the responses suggest improvements to retailers’ product selections. While 13 percent of the respondents mentioned pricing and promotions, the same percentage relates to stores’ environment, perhaps reflecting a greater awareness of cleanliness and safety measures as a result of COVID-19. 5 percent of the responses mentioned product sampling in-store. So it’s clear that while shoppers are now returning to stores, they’re doing so with raised expectations, since they can easily discover brands, research products, read reviews from real people and shop all online. Doug Stevens offers his perspective on the significance of these changes.
Doug Stephens: No matter what you sell the internet has commodified it. The consumer has an endless well of choice, in every product category. So every brand needs to be the answer to a deeper question than where can I get this product. The first question that every brand today needs to answer is what is our purpose to consumers? What fundamental need do we satisfy by virtue of our presence? And if you can figure that out and bring it to life, then you can sort of move on to strategy part two. but this is a fundamental question that we have to answer.
Adrian Tennant: You’ve been listening to the first episode of Retail Disrupted: What Shoppers Want From Brands Today. My thanks to all the contributors to this podcast: Doug Stevens, Paige Garrett, Camila and Nidia Swanson, Jorge Sedano, and Haroldo Montero. To download the full report on which this podcast is based, go to bigeye.agency/retail, where you can also watch the on-demand, webinar highlighting results through our national study. I’ve been your host, Adrian Tennant, VP of Insights at Bigeye. Thank you for listening. Until next time, goodbye!Back to Articles