Through recent research at Kantar, Walker Smith recommends five new operating principles to better understand consumer behaviors. They all begin with a number:
- 679 which is the number of unique foundation colors available at cosmetics counters in stores. This is 25% more choice than was available a few years ago and demonstrates the increasing fragmentation of consumer tastes in the market. Products and services are becoming more personalized and customized, and not just in consumer products. The number of most popular music genres increased from 35 in the 1960s to 99 today. The takeaway from all of this? Opportunities will be found in niche markets not mass markets. Bigger business at smaller scale.
- 286% which is the return to shareholders on the value of trust, demonstrating the actual economic value of trust. Sadly, this valuable attribute has seen a decline among consumers over the past decade. Big brand messaging is not working any longer as consumers rely on those they know for recommendations. Trust does not come from authority today. It comes from more personal recommendations. We are moving from institutional to intimate.
- Magical number 7, give or take two. This represents our short term memory; the average number of things we can remember at one time. Knowing that the human brain can retain only so much at one time, why do we push more and more ads? The average number of ads pushed today are double what it was in 2008, outpacing consumers capacity to retain the message. So the lesson here is that we should be enabling opt in to retain brand clarity.
- 500k likes refers to the transition to recommendations by algorithms. Humans are seeking more down time from tech, as evidenced by the resurgence of many analogue goods such as books, vinyl LPs and instant photography. Seeking the human touch will only accelerate with the advancements in voice technology.
- 90% of consumers value experiences over material possessions. Since the fastest growing part of the consumer economy is experiences, it’s the savvy marketer who increases the experience over the possession. An example is CapOne bank creating a coffee shop in its branches. This has proved so popular that the bank is rolling this out nationally.
Following these five principles will help companies better navigate the ever changing terrain by allowing for a greater understanding of consumer behaviors, says Smith. Sometimes it’s just simple arithmetic.