Google recently hosted a Comparison Shopping Services (CSS) spotlight event, showcasing updates to the platform, 2022 trends and award-winning agencies.
This was a highly informative event, providing great insight into the search activities of users during the war in Ukraine and the current economic crisis, along with a significant update to the platform.
Finding clarity in uncertainty
How economic changes have impacted Google search
Google kicked off the event with industry manager, Guy Luchting, who broke down the changing macroeconomic backdrop, customer trends and how businesses can react.
The last few years have been full of uncertainty – from the pandemic all the way to the rising cost of food and energy. According to the 2022 Census, ‘the Consumer Prices Index (CPI) rose by 9.9% in the 12 months to August 2022, down from 10.1% in July.’ Furthermore, as of July 2022 rising costs and inflation have overtaken Covid as a first priority topic in Google at 30%, making this the number one topic on Google.
But how has this impacted consumer behaviour and their propensity to purchase and save money?According to Google, 85% of consumers claim their financials have been negatively impacted by this year’s events. They also claim that 34% of consumers are cutting back on non-essential spending.
The shift from ‘cheap’ to ‘best’
Shopping online used to be about getting a ‘cheap’ price, but over the past two decades it has become much more about getting the ‘best’ product.
Google stated that the most important criteria for purchase consideration in the German market is quality – with 40% of respondents placing more importance on quality than on price (21%). So while people still seek quality products, value is becoming more of an important factor.
Despite high inflation rates in Germany, quality is still the most important factor when it comes to the purchasing decisions, according to 40% of Germans surveyed.
The “lipstick effect”
Even though these are difficult times, there is still cause for optimism. The lipstick index, coined by Estee Lauder’s Leonard Lauder, is the idea that sale of affordable luxuries rises in economic downturns.
According to Google, ‘Consumers don’t want to give up their little luxuries; just yet!’. They also state that ‘little luxury’ terms grew over 50% throughout June 2022 in Germany. And this isn’t just limited to little luxuries. In addition, ‘49% of global consumers indicate that when shopping for food they often buy higher quality products as they are saving money in other places right now’.
Consumer intelligence: smart shopper insights
Raphaela Rekab, Marketing Research and Insights Manager (EMEA) at Google, shared the following insights when it comes to consumer intelligence and smart shopping.
Insight 1: Price pressure impacts the consumer journey
According to Google ‘across all industries 20% of consumers are concerned about the rising costs of goods and even 27% for fast moving consumer goods (FMCG) products’. This means that consumers strongly feel price pressure, and therefore this strongly impacts the shopping journey.
Insight 2: Uplift on all product categories
Over the past four years, data trends indicate that after years of stable levels during the pandemic, there has now been an uplift on all product categories.
In the UK, Germany, Northern Europe, and Central and Eastern European (CEE) markets, there has been significant growth in online purchase (durable products). For FMCG there has been growth across all markets with significant growth in the UK, Germany, Southern Europe, and CEE markets.
Insight 3: Online research is still very important
Online research remains high with 68% of consumers conducting online research prior to buying products. In addition, online research is the preferred method of gathering information at 84%.
Here are four key factors to achieve success:
- Understand your customers: focus on pain points in order to retain your consumers and strengthen your ecommerce strategy.
- Wow your customers: consumers are open to try new retailers and brands. So, focus on the key drivers – price, availability of products, convenience, speed of access and quality.
- Synergy is key: align offers, marketing tactics and campaigns across all key online touchpoints, with a focus on mobile.
- Value hunting: act in a socially responsible manner and communicate those values to your customers. Focus on trust as it’s an important driver of retailer and brand selection.
The CSS Spotlight event and current trends clearly show that despite a turbulent economy and difficulties with crises, consumers are still keen to continue to shop online. I look forward to the next CSS spotlight event to see what insights and trends Google will uncover in the future.
If you’d like to learn more about Croud Commerce and how the ecommerce team could assist your retail strategy for the holiday season and beyond, please get in touch.