How well do you know your customer? Consumer trends in 2023

But as the country has now emerged from the uncertainty of the pandemic, we find ourselves in the uncertainty of inflation, rising interest rates and rent, conflict in Europe, and a climate/energy crisis. Matched with the rapid development of sophisticated AI-driven technology, it’s understandable that Australians might be feeling some insecurity about the future.

All these forces have an impact on consumer and user behaviour, and it’s important to think about how the current landscape might be driving your audience’s behaviour. Below, we’ll outline some of the trends which are emerging, and take a look at the opportunities to meet consumers/users’ needs.

Spending more intentionally

Rising inflation, the creeping cost of living, interest rate hikes and a murky global economic outlook means Australians are acting like we’re in a recession, even though we’re not (yet) technically in one. Global Martech company Marigold’s Consumer Trends Index 2023 reveals that 60% of consumers are very pessimistic about both the rising cost of living and economic outlook. As a result, consumers are largely focused on cost. Research published in January by McCrindle found that price was extremely or very important in the buying experience of 85% of Australians. It appears that while we might want to resume pre-covid activities like travel and in-store shopping, the economic climate is inducing more thrifty behaviours and overt purse tightening.

Longer research phase

According to research, economic conditions mean consumers are doing less impulse shopping and more research before purchase. This often means a longer customer journey, which is an opportunity to engage with prospective buyers along the way; building trust and a more meaningful relationship. From a digital perspective, how can you be serving your price-conscious users in the research phase? Comparison tools, calculators and richer value-driven content related to the granular benefits of what you’re offering are all worth considering.

Waiting for sales + utilising loyalty programs

From a marketing perspective, it could be a good time to invest in and promote your loyalty programs, member portals and wishlist functionality, because according to research by McKinsey, more consumers are utilising memberships in order to receive a better deal, and waiting for sales before purchasing from favourite brands.

The brands who are reaping the most from their loyalty programs have a few notable features: the accumulation of points for big rewards, ability to earn points fast to redeem small rewards more quickly, and a gamification element (for example, challenges, multipliers that boost points, etc.). Features like member portals and wishlists can also support a longer customer journey, allowing customers to revisit items over time, while also giving you insights into customer preferences.

Before you rush to have a sale or slap together a loyalty program overnight, though, we’d recommend doing research into your audience to unearth their needs and ensure you’re making strategic decisions about how to serve them well. If people are cancelling their subscriptions to your software, or opting for products at a lower price-point, it’s worth digging into why, so you can create a solution which truly serves your users needs. It could be as simple as repackaging your offering, or providing more information and social proof in the research phase, rather than offering a loyalty program. Make sure you do some research before you get too far down the solution track to uncover the most efficient and effective solution.

Seeking a smoother user experience

Another trend is the desire for a frictionless user experience. McCrindle found after price, Australians want simplicity of purchase. This isn’t new, but in a time of uncertainty, we’re craving predictability and ease even more. Where brands can, they should look to reduce friction and improve the user experience across a whole spectrum of user interactions. Digitally, this should include:

• Seamless navigation
• Responsive design for seamless cross device experiences
• Clear user pathways and entry points
• Clear, easy to understand, and user-friendly copy
• Easy to use sign-up, booking and transaction pages
• Faster load times and better site or application performance
• Personalised content
• Accessible websites and content
• Quality customer support

Consistent cross-channel experience

According to research, consumers also prefer brands that deliver a consistent user experience across all channels. Consistent branding, messaging, and user interface design across platforms and touch points help users feel familiar and comfortable with a brand. Our brains love knowing what to expect, and familiarity builds a level of trust. Think about brands who do this well, like Spotify and Apple. It’s not all about the visual branding, they also offer a predictable and smooth user experience–users know intuitively how particular features and settings will work. They’re also on-brand with their messaging, with a consistent tone and voice. Whether you’re visiting their website, reading an email, using an app or a physical product, there’s consistency to the brand experience.

Backing up the call for consistency across platforms is the statistic that two-thirds of consumers surveyed by Marigold believe the website or app of their favourite brand is critically important to their overall brand loyalty. This means if your website, app or marketing channels aren’t optimised and providing a good experience for your audience, up to two-thirds could be tempted to look elsewhere for the same product or service. If you’re concerned your assets aren’t performing as well as they could be, it could be time for a review of your analytics, a user experience audit and some strengthened brand messaging. If you don’t have a brand style guide, now is the time to create one and roll it out to improve visual and written consistency across your brand.

If you’re wondering how to even measure brand loyalty, there are a number of ways to assess it. The gold standard when it comes to customer satisfaction is the Net Promoter Score (NPS), used widely across all sorts of businesses and industries. It involves asking your customers one question: “On a scale of 1-10, how likely are you to recommend us to family and friends?” Your score is calculated based on the majority of results. Other ways to assess brand loyalty are to look at customer retention and re-purchase/upgrade data, which should be part of regular reporting for any business wanting to assess their position.

Another growing concern for users is data security. Data privacy issues lead to fears around safety which can breed trust issues and consumers leaving a brand, even if they’ve been loyal for a long time. Think of some big name brands in Australia which have experienced data breaches and associated class actions in recent years. Businesses would do well to invest in maintaining website privacy and security as a priority.

Interestingly, while research reveals consumers are fearful about data breaches, they are comfortable sharing some personal information in exchange for a better service. We’ve all handed over some of our details in exchange for a discount, membership or to receive a more tailored service. Which information to request and what to offer as an incentive can be uncovered with some strategic research.

Despite the difficult economic environment, a majority of us are still keen to spend according to our ethics and values when we can afford to. According to McCrindle’s research, the next most important priorities for Australians making a purchase are brand authenticity, aligned values and environmental credentials.

Brand authenticity

Brand authenticity is all about whether a brand is perceived as being genuine, real, and true to its values, identity, and promises. It’s about consistently meeting expectations, communicating honestly and delivering again and again for customers. In the wake of high profile scandals, the telecommunications industry is now the least trusted industry in Australia. While this sounds extremely negative, it does present an opportunity for businesses in less trusted industries, such as telecommunications, insurance and energy, to shine as they build trust with a cynical audience craving authenticity. For example, Aussie Broadband, while in the telco industry, is the 26th most trusted brand in Australia. So, there are opportunities for brands who prioritise the customer experience, security and follow-through to stand out.

Aligned values

Consumers are also increasingly seeking brands with values that align to their own, and looking to businesses more than ever to address societal issues. The 2023 Edelman Trust Barometer found Australians want CEOs to act on climate change (78%), discrimination (75%) and the wealth gap (74%), while consumers increasingly expect brands to be sustainable. Consumers want brands to be advocates for change, and they will vote with their wallet to support brands that are willing to take a stand. This way the consumer feels engaged in the social action and part of the solution

Environmental credentials

Environmental credibility is more important than ever, with 8 out of 10 Australian consumers expecting all businesses to be actively doing what they can to support environmental sustainability. A study of 2000 Australians by Nature consultancy last year revealed 48 per cent of people under 30 would stop using a business if it is not acting sustainably. These figures are up from their last study in 2019, and across more categories than ever before. No longer do we simply expect supermarket products to be aiming for sustainability, but we want our energy provider and other products and services we use to be actively pursuing it too. In the digital realm, there is a growing interest in sustainable websites, which have a smaller carbon footprint, because they use a green host, energy efficient platforms and content.

Conscious convenience

While consumers are increasingly purpose-driven, they’re also seeking hyper convenience, a mix which has been coined ‘conscious convenience’. The intersection between these two demands is obviously a difficult one for businesses to navigate: how do you offer instant gratification without compromising on ethics? An example of conscious convenience is zero emission battery electric vehicles, which will become cheaper and increasingly more convenient as technology improves and becomes more widespread. Services which can demonstrate their social conscience alongside meeting consumer needs quickly and seamlessly have the potential to out-perform the competition, as well as doing good in the world.

Are there ways your business can become more convenient while also becoming more ethical? What are the actions which you can look to take over the next 5 years to bring your business closer to offering conscious convenience?

Ultimately, it's your users/customers who determine the success of your product, making it vital to stay across their needs, motivations, behaviours and expectations. At Tundra, we’ll always advocate for data-driven decisions. Understanding your audience, their journeys, needs and behaviours provides vital evidence to make faster, more confident decision-making, saving both time and money and boosting ROI.

Perhaps after reading this article you’ve made a wish list of user research, UX optimisations and features you’d like to make happen. Maybe you need a hand creating a consistent brand experience across your digital and IRL platforms, or want to strengthen your site security. Whatever your current challenge, we can help you serve your current audience, and future proof your digital assets. With years of experience, we get a kick out of helping organisations and brands get clear on their customers, and designing and delivering purpose-built solutions to reach your organisational goals. So get in touch and let’s see how we can help.