In a competitive category, understanding what consumers want from brand experiences and introducing these values into the post-purchase stage of their journey really makes a positive impact.
Innovation in the food and beverages category has been rapid in recent years. Challenger brands have launched in large numbers and are finding space on shelves while selling direct to consumers through digital channels.
The pandemic provided an opportunity for some of these start-up brands, alongside more established products, to test and realise new routes to consumers during lockdowns.
However, brands in the category then had to contend with pressures on their margins due to the rising costs of raw ingredients. In the 12 months to January 2023, the price of inputs into the production of food, drinks, and tobacco increased by 19.8%, according to the Office of National Statistics.
Meanwhile, consumers were looking for better value in an inflationary market, leading to pressure on brands as private label products offered more affordable alternatives.
There's good news in the sense that these inflationary pressures are now easing - UK shop price inflation reached its lowest levels since 2022 in late 2023 and has fallen further.
While there is also evidence that building a strong brand in the category helps during tough times by enabling food businesses to maintain or increase prices, it's also the case that developing a great customer experience throughout the journey helps food and beverages marketers to nurture and grow their position.
Throwing light on the importance of investing in CX, Merkle's new report, CX Imperatives: From Customer Engagement to Customer Empowerment, reveals six critical imperatives based on the findings of consumer research.
The report highlights at least two vital imperatives for marketers in the food and beverages category: understand CX fundamentals from the customer’s point of view; and focus intently on the post-purchase experience.
Consumer demand for better experiences
First, it's clear what consumers want to see in terms of their own experiences with brands. Yes, they prioritise cost effectiveness, convenience and consistency but there is also evidence of demand for entertainment, humanity and purpose in customer experience.
The report finds that 27% of consumers want future experiences with brands to be more "fun and enjoyable" (over indexing at 37% among 18-34s), 31% want these experiences to be "more personal or human in nature" (35% among 18-34s), and 22% for these experiences to "better match personal values or beliefs" (31% of 18-34s).
But how to deliver on these values? One key area for the food and beverages category is through enhancing the post-purchase experience.
Our report emphasises that consumers rely heavily on word of mouth when making purchase decisions, which is one reason why the post-purchase experience is so important — and probably more valuable — than the upper funnel marketing stages where marketers spend most of their time
If the goal is customer retention and lifetime value then product usage, customisation, repair, and customer service and support all play an outsized role, and that's increasingly the case in food and beverages category.
Demonstrating those values of entertainment, humanity and a clear, relevant sense of purpose can really transform the post-purchase experience, build retention levels, and keep customers sufficiently engaged to rejoin the path to purchase.
Personalising the post-purchase experience
By doing so, it is easier for the organization to run and update customer-facing experiences without disrupting inherently complex back-office commerce operations. This is accomplished with a “headless” architecture, which decouples backend systems, such as the commerce engine, product information management (PIM) systems, and order management system (OMS), from the experience layer that manages customer-facing interactions. A headless approach enables propagation of centralized commerce business logic that is managed as a single operational backbone across several different customer-facing environments that can be brand-specific, region-specific, or channel-specific. From an end user standpoint, this means that the information fetched from the back end, such as product availability, price, and shipping, is what brands need to unify disparate commerce environments. This allows for consistency, regardless of the entry point from which the information is accessed. From a business point of view, this means that marketing teams can focus on launching new experiences that are inspired by customer behaviors and emerging trends. They don’t have to depend on the teams that manage back-end operations to complete single-purpose system updates every time.
Personalising the post-purchase experience
Mars' M&Ms brand is one that has focused on the value of personalising entertainment, and it has brought events, celebrations and gifting to both its instore and DTC offering. For example, it provides consumers with the ability to purchase M&Ms to match their favourite sporting teams, or to personalise the products to specific events such as weddings and birthdays. This is brought through to the post-purchase experience with ideas for recipes, newsletters and targeted offers.
On a smaller scale, the Wonky Food Company, has injected both a sense of humanity and of purpose into its whole customer experience, and especially its post-purchase communications. This stage of the journey emphasises real stories about the people involved in growing its produce, and the contributions its regular customers make to a more sustainable food chain through tackling waste.
In a congested category, in which a strong branded experience helps to maintain both sales and pricing levels, these post-purchase initiatives based on consumer need are essential.
Uncover more compelling Food and Beverage industry CX insights by downloading our report, 2024 CX Imperatives: From Customer Engagement to Customer Empowerment. Or if you’d like to discuss your brand’s needs in this space, please do get in touch.