Hopefully, the end of the year is a time of reflection and planning, not a mad dash to wrap up your initiatives. To best support thoughtbot’s teams and our clients, we spend the end of the year analyzing the patterns we’ve experienced and the trends on the horizon for the industries we support most frequently.
Keeping in mind that the last few years were full of surprises, and a bit of a roller coaster for all of us, we continue to see the macro economy play a large role in teams’ successes, particularly in the Consumer industry. After synthesizing reports and white papers, and connecting directly with leaders, here are the 2023 Consumer Tech Trends that thoughtbot recommends keeping in mind and some tips for how to explore them.
The strategy continues to come back to your users
Users, or consumers, in this case, are spending more cautiously. You are also no longer just in competition with your direct competitors, but also with spending across the board. For example, a food delivery app is now competing with someone’s monthly streaming bill.
The caution around spending is in response to inflation, price changes, supply-chain concerns, and general unease about the future. The current state of the world has made users more cautious but also intensified the need for a purchase to be aligned with values. If a user is going to move forward with a purchase, they want to feel confident and positive about the transaction. They expect a relationship of authenticity, quality, fairness, and flexibility between themselves and a supplier.
It’s easy to assume the right (and only) lever at your disposal is price. The idea being if you make your services or goods cheaper, you’ll be able to navigate the storm due to the increase in transactions. Truthfully other attributes play a big, if not a bigger, role in conversion. Consumer may be okay with spending more if they have confidence in the quality they will receive, or if they are passionate about the sustainability of your business. To understand what’s top of mind for your customers, and to tell the strongest story, you need to have a clear handle on their priorities, and what is top of mind for them. Then you can successfully address their motivations and concerns. The art of successful storytelling can also bring in your customers’ perspectives; using 2-way storytelling is a great way to authentically communicate the value you provide. Deepening relationships & sparking new ones through technology
Most commonly when it comes to technology, and using it inew and engaging ways, thoughtbot’s clients come to us with one of two goals:
- Reach more new users and convert them into customers
- Deepen relationships with existing customers so they continue to come back
First, let’s clarify the table stakes. An outcome of the pandemic was greater flexibility in purchasing and customer service; buy now pay later, curbside pick up, and easy returns have all become a baseline expectation. Being unable to deliver a smooth experience to support the purchase and return flow are an easy way to fall to competitors. A useful way to suss out where you rank is by conducting a competitive analysis.
In terms of where the industry is going and using technology in new ways, delivering a cohesive experience across channels should be top of mind. This includes your digital properties and physical locations if you have them, but also across other channels, like social media and search engine experiences.
For product listings themselves, especially for a digital-only company, using multimedia in an engaging way makes product detail pages more relevant and engaging. Examples include providing multiple high-quality images and videos, the ability to zoom, pinch and enlarge, high-quality, accurate descriptions that are easily readable, relevant reviews, and quick access to technical information like shipping and return policies.
Expanding personalization is a trend expected to continue to grow. Using Artificial Intelligence (AI) to deliver a personalized experience, meaning a unique UI/UX across platforms per user, is a dynamic way to present the information a visitor truly cares about. AI can also power next-generation filter tools that make browsing even easier and provide rich product attributes that strengthen SEO. Minimizing unnecessary information provides a simplified user journey.
Generative AI is a more powerful form of AI, and an area that is growing in awareness. Generative AI models are distinctive in that they can leverage a greater number of data sources and types of data (ex; text, social media activity, imagery, video, analytics, etc) to inform a wider range of outputs across channels. Some popular use cases include generative AI’s ability to produce content, answer questions, provide sentiment analysis or make suggestions, again tailored to the individual. It takes some time to train these models, but they can do a lot of work for you in delivering a compelling user experience.
Economic uncertainty & continued hurdles
We expect the obstacles that Consumer teams faced in 2022 to continue in 2023, especially in B2C. These include challenges around the price of goods, inflation, supply chain hurdles, and inventory management. Even if you haven’t encountered this situation yet, it’s important to have a plan if issues arise so you can make smart, strategic decisions vs. just reacting. This will also give your stakeholders a lot of confidence in your ability to pivot and adapt.
When confronting a workflow challenge, thoughtbot’s suggestion is to take some time to align your team on your goal, which is ideally derived from the strongest element of your value proposition. Your goal might be to successfully share inventory specifications with your users when browsing. Having a goal gives your team and organization a true north regarding priority, and allows you to uncover the right process for reaching that goal. If you have a product or service take off, you don’t want to waste time planning how to scale, you want to be able to tap into your previous conversations, research, and plan so you can immediately scale effectively and take full advantage of positive momentum.
Using Agile Experiments to test things out
To best navigate challenges, and explore new opportunities, we suggest outlining a repeating process for experimentation. This includes time to brainstorm, research, quickly roll out, and track the effectiveness of each experiment. Even “failed” experiments allow you to learn more about your value proposition and customers.
Another benefit of having a repeating process for experimentation is the ability to keep a pulse on your target audience. Having insight into their needs, motivations, and any potential changes as soon as possible empowers you to best react. A successful experiment doesn’t have to be tied to more purchases alone; keep in mind a range of potential proof points that describe the effectiveness of an experiment, for example, more website or social media visitors.
In terms of uncovering the right experiments to start with, an exercise thoughtbot likes to facilitate is a Lightning Design Jam (past event example here). This allows a team to come together and reflect on what’s going well, what could be improved, and ideas to do better. These ideas are then prioritized in an impact vs. effort matrix to support a concrete action plan.
It’s always best to frame your session with a broad topic. Given the trends we are seeing and the foundational strategy of maintaining a deep understanding of your customers, here are some timely prompts to use as a launching point:
- Keeping up with the competition
- Personalizing our users’ experience
- Reaching new customers on new channels
- Improving conversion on our website
Some of thoughtbot’s favorite projects are those where we can ask hard questions and try things out. Conducting research to inform a product and business strategy as well as outline experiments is our go-to approach for uncovering improvements. Something unique about thoughtbot is that, in addition to doing the work itself, we help mentor a team and improve their overall process. Rolling out a few experiments can get things moving, but we can go beyond that to help your team adapt a repeatable process that continues after we roll off.
Regardless of your stage, or your team makeup, we partner closely with you to identify your needs and provide the right team of experts best suited for your goals. We would welcome the opportunity to work with you in starting the year off strong. Please reach out here to start a conversation.
A big thank you to Rosie Phillips, an Investor on the Consumer Investor team at Octopus Ventures and Kyle Tymoszewicz, the Head of Product at Convictional for some great discussions in preparation for this blog.
Octopus Ventures
Octopus Ventures is one of the largest and most active venture capital investors in the UK and Europe, investing in and supporting the people, ideas and industries that are changing the world. It has built expertise across six sectors: B2B software, climate tech, consumer tech, deep tech, fintech and health and has backed more than 180 businesses across the UK & Europe, including successes like Zoopla, WaveOptics, Cazoo and Depop. It invests in people and teams from as early as ideas on a page all the way through to the later stages of growth, providing capital, expertise, and partnership.
It manages £1.9bn for its personal and institutional investors, investing £200m each year and is part of Octopus Group, a group of entrepreneurial businesses united by a common goal: backing the people, ideas and industries that will change the world. Hear from Octopus Ventures experts at: https://www.octopusventures.com
Convictional
Convictional is the supplier enablement platform for marketplace and drop ship. We help enterprise retailers source, onboard and transact with curated third-party suppliers. Learn more: https://www.convictional.com
