Over the next few years the shopping experience will have to cater to both the ageing population and dynamic young Millennials who are rapidly coming of age. It will not be long before all generations will be online-savvy and connected, with 2016-2020 being pivotal years. So what are the principles that are likely to determine consumer behaviour in the second half of the decade?

Connectivity

Shopping behaviour is changing due to the wide availability of connected devices and fast internet, with growing influence of social media on consumer choices and the convenience of online and consumer research contributing to the increase of sales. The Millennials will lead the way, but all consumer groups will use their mobile devices extensively for making purchases and gathering product information. The most successful retailers therefore will have to keep in step with these cultural changes, and merging the digital and physical models of their businesses in an integrated channel. 

Value

Following a long period of economic austerity, consumers remain more price conscious and do their research before spending. Online price comparison, customer reviews, blogs and vlogs will increasingly influence buying decisions and are setting trends. In this context shopping choices have become more polarised between value and aspirational goods, with the mass market losing distinction and market share. ‘Value’ has become as much defined by quality of service as it is by quality of product, with consumers being prepared to spend more on goods where the overall experience is heightened.

Convenience 

This has become important across the demographic spectrum. Lack of time and widespread use of technology on the go have created the demand for convenience in shopping. Such convenience is no longer the realm of grocery and service retail alone, but includes many fashion and homeware goods that meet everyday affordable and frequent purchase needs rather than requiring specialist or destination retail trips. This impacts retailing in different ways, from the need for integrated cross-channel stores and strategies to the revival of neighbourhood high streets and shopping centres to respond to the need for shorter travel distances.

Ethical buying

Sustainability will increasingly determine spending in the future. Consumers are well informed and more aware of what they consume. They are interested in a responsible consumption style which takes into account green issues, corporate responsibility, fair trade, health and wellbeing.

Personalisation 

Personalisation of products and services to respond to different age groups, different needs and specialty interests through research, design, innovation and introduction of niche products will grow in the future. However, it is personalised service and experiences that will really capture the imagination of the modern consumer. Big Data and technologies such as near-field communication, geofencing and facial recognition will allow real time micro-personalisation in stores, tailoring the product offer and retailing experience to purchase history, social media or even the consumer’s current mood.

Further information

Contact Savills Retail and Leisure