There has been a considerable change in the way consumers want to spend in recent years, both in shops and online. Organisations need to keep up with these spending trends; otherwise, they risk being left behind. Owen McFeely summarises what organisations need to do.

The events of the last two years have changed how we live, work and shop. The evolving Irish consumer is responding to the current macroeconomic challenges by increasing: focus on savings, price sensitivity, purchasing online via multiple channels, customer service expectations, and environmental, social and governance (ESG) expectations.

Consumer sentiment is fragile. Around half or more of Irish consumers expect no change in their spending over the coming six months compared to the previous six months. Understanding these new and emerging consumer nuances and the sometimes fragile nature of this consumer optimism is critical.

The channel of choice

For leaders looking to drive customers either into stores or online, analysis of our survey findings uncovered specific factors that are strongly linked with a tendency to shop via specific channels. Therefore, understanding the interplay between these different channels is vital to growing revenue. For example, making purchases possible via social media could help drive a greater propensity to shop online, as could offering efficient delivery or collection services.

Data privacy is key to consumer trust

Personal data protection is the key factor in building brand trust. While other factors such as exceptional customer service and sustainability are vital attributes for driving trust among Irish consumers, data protection is non-negotiable.

Further, ESG factors are increasingly important to Irish consumers when it comes to building trust. However, other factors such as sharing discounts and offering a seamless customer experience (which affect consumers in a more obvious, direct way) are highly valued.

Businesses can build a system of privileged insights, but only if the value they offer resonates with consumers, and these consumers trust them to make good use of their data.

Consumers care more about sustainability than ever before

There has been an increased focus on eco-friendly consumerism compared to six months ago. Consumers want to do the right thing for society and the environment. However, products can’t be one-dimensional when it comes to consumer expectations as they must satisfy more complex consumer needs.

Irish hybrid workers show the most interest in sustainable shopping with better lifestyle choices, staff wellbeing, and supporting local communities used to form purchasing decisions.

Key actions businesses can take now

Data protection

Customer awareness and expectations concerning data protection continue to grow. Therefore, we recommend the following steps to gain and maintain customer trust:

Basic data protection hygiene: It may sound obvious, but some organisations still fail to meet the public-facing hygiene factors in relation to data protection. Ensure your website cookie banner and preference centre are compliant. Ensure you have an up-to-date privacy statement or notice and a clear mechanism to deal with data subject requests.

Data trust: Poor data management practices can result in incidents that cause reputational damage and erode trust. Review how you manage data across the data lifecycle against good practice standards, making sure you only collect what is needed, securing the data while in your possession, and ultimately disposing of it when it has served its purpose.

Third parties: Don’t forget that much of your data may reside with third parties. Implement robust governance across the third-party lifecycle, from procurement to exit management, to ensure your vendors do not put your reputation at risk.

Environmental, social and governance strategy (ESG)

With growing consumer and investor pressures and the need to comply with regulatory requirements creating new business challenges, this is an area that needs to be fully understood and planned for. ESG presents opportunities to develop a competitive advantage, although the risks need to be mitigated.

Three critical areas of focus are:

Strategy:

• Are the risks understood and quantified?
• Does your business have a clear ESG strategy?
• Is there senior leadership ownership and accountability?

• Is the plan understood and communicated across the business?

Reporting:

• Are the reporting requirements understood?

• Is the required data available?

• Is there ownership for the necessary measurement and reporting?

Operational:

• Are the necessary operational plans in place to support the ESG strategy?

• Are the necessary measurements in place to track progress?

Digital strategy

Building an integrated digital and operational strategy is essential to providing optimal customer service.

Key areas of focus include:

Customer insights:

• Is your planning informed by the latest customer insights, and does it also take account of macro trends that will drive change?
• Have you assessed current platforms against emerging trends?

Process automation:

• Have all opportunities to apply process automation been assessed? This creates efficiency opportunities and also helps mitigate labour shortages.

Road map:

• Is there alignment on the short-term, medium-term, or long-term plan?

Consumer and investor trends are changing at a fast-paced rate. So if businesses want to stay ahead of the curve, it’s essential to keep up – otherwise, they risk being left behind.

Owen McFeely is Director of Retail & Consumer Practice at PwC.