Shifting consumer priorities see businesses facing 'crisis of relevance'

Almost nine-in-ten executives are worried that their business is at risk of becoming irrelevant, as public sentiments on consumption and work shift around the world. Customers and employees increasingly expect companies to meet higher standards of trust, but many companies still believe simply being a ‘recognised’ brand will be enough to draw in buyers and workers.

A survey of 25,908 consumers in 22 countries has demonstrated a growing gap between the perceptions of businesses and their customers. Consulting firm Accenture also polled some 850 global executives around the world, in the first quarter of 2022, and found that many are deeply concerned by this disconnect.

According to the researchers, 67% of consumers expected companies to understand and address their changing needs during times of disruption. Businesses are struggling to adjust to the differing expectations of their customers per segment, though, and an oversimplifying segmentation of these criteria has left 88% of executives saying they are facing a “crisis of relevance”.

Baiju Shah, Chief Strategy Officer of Accenture’s design agency, Accenture Song, said, “There is a growing divide between what consumers need and value and what businesses offer, creating a relevance gap. We believe that companies can bridge this gap and herald significant growth by not focusing on promoting consumption, but in meaningfully contributing to customers’ lives.”

Doing so is proving easier said than done, though. External factors – from economic to cultural, environmental and political – are affecting consumer behaviours to a greater degree of variation than ever before. Each sector is impacted differently by this, too, making life more complicated and purchasing decisions more multi-faceted.

Even as up to 66% of consumers say their decision-making is driven by their own needs, some 72% of consumers feel they can personally impact the world and their communities through behaviours and buying choices. For example, a consumer will select a one-hour delivery for sustainable products. More than half of consumers say the pandemic motivated them to adopt a more sustainable lifestyle, but up to 65% say price increases have led them to select lower-cost brands on recent purchases.

As such, depending on the product and occasion, customers value different concepts more prominently, as opposed to having a one-size-fits-all approach to their consumption. Everyday shopping sees customers rate sustainability much lower than convenience and trust – but when making occasional purchases for more long-term goods, they prioritise sustainability. In both cases, they count being able to trust suppliers as a top-two criteria.

Disconnected

Companies in the sector have failed to read this sentiment properly, though. According to Accenture, companies believe recognisable brands are what customers prioritise in everyday shopping, while convenience is thought a top priority for occasional shopping. In both cases, companies over-estimate a sense of ‘fun’ (shoppers’ lowest criteria) as what they should be delivering on, while placing sustainability and trust at the bottom of the list.

Indeed, recognition often ranked pretty high in terms of what businesses were investing in – while ranking outside the top two items in all but one segment of consumer sentiment. When it comes to healthcare, customers favour tried and tested brands, or providers, over alternatives perceived as more risky. While companies in that segment were most aligned with their customers in that regard, however, they somehow did not expect that trust would be the second most important factor to customers – instead investing heavily in convenience.

The disconnect is not only felt by executives at this stage. Consumers are becoming increasingly frustrated at not being listened to. Around 64% of consumers wish companies would respond faster to their changing needs – and this is putting retention rates at risk, while attracting new customers is also becoming a challenge for some firms. Now, 67% of customers (up from 51% in 2021) believe companies should change their offerings, while brand names are less important to them than they once were.

Accenture’s report subsequently concluded that companies had relied too heavily on “broad analysis” of public sentiment, which is much more complex. It suggested that the one thing that was clear from this was that “The old playbook for relevance is now obsolete”, adding it was “time to take on a new strategy” instead.

One unnamed British consumer speaking to Accenture added a suggestion as to how companies might start doing just that: “Stop hiding behind focus groups and marketing hype, and speak to people with an honest voice.”