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ConsumerOf The FutureInsights on Fast Food, Consumer Packaged Goods, Fashion & Apparel and Personal Care & Beauty

January 2019

COPYRIGHT © 2019 BARKLEY, INC. AND FUTURECAST, LLC. ALL RIGHTS RESERVED.NO DISTRIBUTION OR REPRODUCTION WITHOUT PERMISSION.

Table of Contents

All of the material in this document is copyrighted and may not be reproduced in whole or in part without express written permission. For permission, contact Joe Sciara at [email protected].

05 About This Study

07 Quick ServeRestaurants

33 Personal Care & Beauty

45

47

About Barkley

Resources15 ConsumerPackaged Goods

25 Fashion & Apparel

COPYRIGHT © 2019 BARKLEY, INC. AND FUTURECAST, LLC. ALL RIGHTS RESERVED.

5

NO DISTRIBUTION OR REPRODUCTION WITHOUT PERMISSION.

AboutThis Study

Full of noise, constant competition and easy access to just about everything, the modern market is congested with brands doing anything to stand out, while consumers too often respond by shutting off. Potent modern brands understand why: They listen to and study consumers, then evolve to meet their needs.

It’s our business to help brands get to know their consumers, to connect with them through ideas that drive the entire spectrum of a brand, from business strategy to marketing strategy. And, ideas that are not just for now, but for what’s next. Our commitment to knowing modern consumers better than anyone inspired

this latest deep-dive into modern brand mindsets and brand impact levers as they pertain to various categories.

In partnership with Jefferies and Accenture Strategy, we conducted a proprietary survey of 2,851 consumers that studied consumer preferences and purchase drivers across multiple categories, including personal care & beauty, apparel, packaged foods and QSR restaurants.

We investigated modern brand mindsets — or the cross-generation collection of behaviors and attitudes that a brand can leverage to drive performance in terms of share, growth and loyalty. These mindsets are informed by the impact of Millennial and Gen Z expectations of modern brands, as they form

the majority of people engaging in commerce — the core of what we call modern consumers.

Brands that understand the modern consumer will be more likely to create an emotional connection that drives brand love and loyalty — which equates to higher brand value.

Modern Brand Mindsets

Adding GoodPurposeful

Simplifies My LifeAccessible

ReinventingInnovate

Emotional ConnectionSelf

Puts ConsumerTrustedNeeds First

Conversational +Social Circle

Participative

01


Quick ServeRestaurants

Product

Communications

Design

Experience

Workforce

What the brandtakes to marketand sells

The symbols and narratives that tell a brand story

The manifestations of a brand that make it top of mind

Customers’ directexperience with a brand

The internal culturethat defines a brand from the inside out

Brand Impact Levers We also looked at impact levers, defined as the sub-system of product, experience, communications, design and workforce activities. These levers connect a brand’s business and marketing ideas with its consumers and stakeholders.


9Personal Care

& Beauty


9Quick ServeRestaurants


11


ModernBrand Mindsets

Modern Brand Mindsets When looking at the importance of the Modern Consumer Mindsets in this category, accessibility and trust are important overall to driving performance. This

was the only category of consumer goods where two Mindsets drove importance. Accessibility is driven by “makes it easy for me to use their products” and “makes

it convenient to shop for and buy their products.” Trusted is driven by “doing the right things” and “is honest in its actions and communications.”

figure 1.1Mindsets Performance - Quick Serve Restaurants Index to All Categories

Source: Accenture / Barkley / Jefferies 2018 Consumer of the Future Study


Self PurposefulSocial Innovative AccessibleTrusted

There are differences by generation:

40

80

120

160

0

Gen Z

Cares about sustainability and the environment

Millennials

Helps me live a simpler, healthier life

Gen X

Is honest in its actions and communication


13


BrandImpact Levers

figure 1.3Brand Impact Levers

Brand Impact Levers

Fast Food Restaurants

Packaged Food

Personal Care & Beauty

Household Products

Fashion & Apparel

Brand Experience

Product + Service

Brand Design


Brand Communications

Workforce


figure 1.2TURF

Makes it convenient to shop for

and buy their products

Makes it easy for

me to use their products

Helps me live a

simpler, healthier life

Cares about sustainability

and the environment

Creates innovative

products and solutions

Reflects my lifestyle

Is honest in its actions and

communication

Is authentic and true to

its roots

0%

20%

40%

60%

80%

100%

We used a TURF analysis (total unduplicated reach and frequency) to see what individual Modern Brand Mindset statements drove reach in this category. The chart below indicates that

it only takes four factors to reach 70 percent reach with women and men. Shopability, ease of use, helping live simple/healthier lives and sustainability are key attribute factors.


70% Reach

MaleFemale


While performance measurements across categories find that product matters most when selecting a Quick

Serve Restaurant, brand experience and communications become more critical in other categories.


Consumer Packaged Goods

02

figure 1.4Brand Impact Statements

Has a store, website, mobile app, etc. that is easy to navigate and shop.

Customer service makes me feel special.

Rewards me for my loyalty (e.g., gives me recognition, special gifts, discounts or other benefits).

Has advertising that is easy to understand.

Has advertising that is entertaining.

Individual statements for the Quick Serve Restaurants indicate preference for brands that use technology for convenience, great customer service, and advertising that is both easy to understand and entertaining. The following percentages represent consumers who agree the statement is important when deciding what brand to purchase.


EXPERIENCE

COMMUNICATION

0% 20% 40% 60% 80% 100 %

56%

40%

41%

41%

62%


17Personal Care

& Beauty


17Consumer

Packaged Foods


19


Important Factors Todayvs Two Years Ago

Important Factors Today vs Two Years Ago

More than half of all consumers now expect brands to meet their emerging needs.

66%

50%90%>

50%42%27%

Health Benefits are more important

of consumers say taste or price is the most important factor

of consumers agree taste and price are as or more important than two years ago

Quality, Safety & Trust are more important

Social Impact is more important

Brand Recognition is less important

Important Factors

Taste and Price

figure 2.1Brand Beliefs and Expectations by Generation

Help me discover new

things

Anticipate my needs

Be consistent with the image I want to convey

Supports issues I

believe in

Allow me to create and customize

0%

20%

40%

60%

80%

100%

Source: Brands Still Matter Consumer Survey 2018

Source: Marketing to Gen Z 2018

Gen ZMillennialsGen XBoomers

Taste and price are still the most important factors driving performance in Packaged Foods. This hasn’t changed for two years. Still, other factors are becoming more important, with emphases on health benefits, quality/safety/trust and social impact.


21


MindsetStatements

Trusted

Innovative

Is honest in its actions and communications

Creates innovative products and solutions

Self

Accessible

Helps me live a simpler, healthier life

Makes it easy for me to use their products

SocialCircle

Purposeful

I love to tell my friends about them

Cares about sustainability and the environment

Mindset StatementsModern Brand Mindsets

figure 2.2Modern Brand Mindsets - Consumer Packaged Goods/Food & Beverage Index to All Categories


Social AccessibleSelf Innovative Trusted Purposeful

40

80

120

160

0

When looking at the importance of the Modern Consumer Mindsets in this category, accessibility,

trust and self are important overall to driving performance.


23


BrandImpact Levers


Brand Impact Levers While performance measurements across categories find that product matters most when buying staples such as packaged

foods and household goods, brand experience and communications become more critical in other categories.

PackagedFood


Brand Experience

Product + Service


figure 2.3TURF

MaleFemale



Makes it easy

for me to use their products

Helps me live a simpler,

healthier life


and the environment

Reflects my

lifestyle

Is honestin its

actions and communication

Is always testing

new ideas

Creates innovative products

and solutions

Is authentic and true to

its roots

0%

20%

40%

60%

80%

100%

We used a TURF analysis (total unduplicated reach and frequency) to see what individual Modern Brand Mindset statements drove reach in this category. The chart below indicates that it only takes four factors to reach 70 percent reach

with men and women. Shopability, ease of use, brand promise and sustainability are key attribute factors. Men prefer brands that portray images they can relate to, and look for more innovation.




Packaged Food


Household Products

Fashion & Apparel


0% 20% 40% 60% 80% 100 %

03

Fashion& Apparel


Has a logo, packaging or storefront that is easy to recognize.

Has a logo, packaging or storefront that is visually appealing.

Has a logo, packaging or storefront that is modern and up to date.

Offers products/services that are reliable or consistent.

Offers products/services that are good value for my money.

Has products/services available in the size/flavor/format, etc. that fits my needs.

Offers products/services that are high quality.

Regularly launches new product variants (flavors/fragrances/colors/styles).

While product is the most important performance factor for Packaged Foods, individual statements indicate that package design plays a more amplified role in helping to navigate products on shelf. In fact, design statements scored at the highest levels of importance in this category.



DESIGN

PRODUCT/ SERVICE

61%

65%

64%

59%

59%

62%

62%

62%

55%


27Personal Care

& Beauty


27Fashion

& Apparel


29



Mindset drivers also differ by gender with men caring more about innovation and social circle and women caring more about purpose.

Modern Brand Mindsets When looking at the importance of the Modern Brand Mindsets in this category, accessibility, self and trust are important overall to driving

performance. Accessibility (both off and online) is a dominate theme in this category throughout this report. Accessibility is more than product availability —

It is how a brand delivers a frictionless experience. Self is also important in how a brand or product adds value to a person’s life or sense of self.

figure 3.1Modern Brand Mindsets - Fashion & ApparelIndex to All Categories


Social AccessibleSelf Innovative Trusted Purposeful0%

20%

40%

60%

80%

100%

figure 3.2TURF


and buy their

products

Makes it easy

for me to use their products

Helps me live a

simpler, healthier

life


and the environment

Reflects my

lifestyle


and the environment

Is honest in its actions and communication

Is authentic and true

to its roots

I trust them

to do the right

things

Is always testing new

ideas

We used a TURF analysis (total unduplicated reach and frequency) to see what individual Modern Brand Mindset statements drove reach in this category. The chart below indicates it takes a higher requirement for a brand to achieve 70

percent reach with women and men. Shopability, ease of use, brand promise, sustainability and innovation are key attribute factors. Men prefer brands that portray images that are authentic and honest.


70% Reach

40

80

120

160

0

Men CareMore About

Women CareMore About

Innovation Purpose

Social Circle

MaleFemale


31


BrandImpact Levers

0% 20% 40% 60% 80% 100 %



foods and household goods, brand experience and communications become more critical in Fashion & Apparel.


Brand Experience

Product + Service

Workforce

Brand Design

Fashion& Apparel


Individual statements for the Fashion & Apparel category also indicate that brand experience and brand communications play a critical role in driving performance. Product and service is focused on reliability and fitting personal needs.

COMMUNICATIONS

EXPERIENCE

PRODUCT/SERVICE

67%

64%

64%

65%

64%

63%

53%




Has advertising I’ve seen/ heard in the past month.

I am able to purchase the product/service through multiple channels (e.g., in-store, online, voice and recognition).

Has a store, website, mobile app, etc. that is easy to navigate and shop.



Has products/services available that fit my needs.


Packaged Food


Household Products

Fashion & Apparel


Brand Impact levers differ by gender where men care more about design and entertaining communications and women care more about loyalty and personalization.


04

Men Care More About

Women Care More About

“Has a logo, packaging or store front that is easy to recognize.”

“Rewards me for my loyalty.”

“Has advertising that is entertaining.”

“Personalizes interactions to me to fit my needs.”

Design

Loyalty

Communications

Personalization


35Personal Care

& Beauty 35Personal

Care & Beauty


37



Insights Large brands and brands with very loyal user groups dominate the Personal Care & Beauty category: Nearly 90 percent of respondents say they are extremely or very loyal to their preferred brand. Despite this loyalty to their preferred brands, consumers consider switching brands based on what products are available. Brands must drive their strategy around product availability in order to compete.

76%

46%

88%

14%

32%

10%

15%

prefer large brands

periodically switch

are extremely or very loyal to their preferred brand

prefer emerging brands

only switch when preferred brand is not available

prefer private label

never switch brands

Brand Type

Brand Switching

Brand Loyalty

Modern Brand Mindsets When looking at the importance of the Modern Consumer Mindsets in this category, accessibility, self and trust are important overall to driving

performance. Accessibility (both off and online) is a dominate theme in this category throughout this report. Accessibility is more than product availability.

It is how a brand delivers a frictionless experience. Self is also important in how a brand or product adds value to a person’s life or sense of self.

figure 4.1Modern Brand Mindsets - Personal Care & BeautyIndex to All Categories


Trusted AccessibleSocial Circle Self Innovative Purposeful

40

80

120

160

0



39


BrandImpact Levers

figure 4.2TURF



Makes it easy for me to use their products

Helps me live a simpler,

healthier life


and the environment

Reflects my lifestyle

Is honest in its actions and

communication

Creates innovative

products and solutions

Creates a frictionless experience when using

their product

0%

20%

40%

60%

80%

100%

We used a TURF analysis (total unduplicated reach and frequency) to see what individual Modern Brand Mindset statements drove reach in this category. The chart below indicates that it only takes four factors to reach 70 percent reach with women, where it takes




foods and household goods, brand experience and communications become more critical for Personal Care & Beauty.


Brand Experience

Product + Service

Workforce

Brand Design



MaleFemale


Packaged Food


Household Products

Fashion & Apparel


six factors to obtain mass with men. Shopability, ease of use, brand promise and sustainability are key attribute factors. Men prefer brands that portray images they can relate to, and look for more innovation.


41


Brand ImpactStatements

0% 20% 40% 60% 80% 100 %


Has a logo, packaging or store front that is easy to recognize.

Has a logo, packaging or store front that is visually appealing.

Has a logo, packaging or store front that is modern and up to date.


I am able to purchase the product/service through multiple channels (e.g., in-store, online, voice recognition).


Offers products/services that are good value for my money.

Has products/services available in the size/flavor/ format, etc., that fit my needs.


Regularly launches new product variants (flavors/fragrances/colors/styles).

Individual statements for the Personal Care & Beauty category indicate that package design plays a more amplified role. In fact, design statements scored at the highest levels of importance in this category.


DESIGN

COMMUNICATIONS

EXPERIENCE

PRODUCT

73%

67%

64%

72%

69%

73%

72%

71%

70%

67%

Price and product drive larger brands, while brand experience and quality/trust/safety drive emerging brands. The following chart illustrates the importance of brand experience and packaging to emerging brands in the quality/trust/safety Personal Care & Beauty category.

Larger Brand Emerging Brand

PriceExperience/Personalized For Me

Small/Feel Quality/Trust/Safety

Brand Price

Quality/Trust /Safety Small/Feel

Experience/ Personalized For Me

Convenience

Convenience Brand



43


GrowthOpportunities

Key TakeawaysModern consumers view brands as a collection of ideas that embody a mindset(s) and activate across brand impact levers, albeit not all equally. As a result, brands do well when they:

• Shift away from the Golden Rule of Treat others as you want to be treated, and move toward the new Platinum Rule, Treat others as they want to be treated.

• Understand that modern consumers value authentic brand purpose built through a virtuous cycle of trust, purpose and loyalty, with accessibility being paramount.

• Recognize that brand impact levers vary by demography, category, mindset and brand lifecycle — there’s no “one size fits all” when it comes to connecting with consumers.

• Clearly and consistently convey their brand value and use personalized engagements to build emotional connections.

• Invest in experience and communications levers.

Growth Opportunities To extract growth, brand owners need to focus on three types of next-generation capabilities.

Consumer Insight & Strategy Formulation

Continually renewing market awareness driving consumer-centric brand portfolio strategy.

Operating Model Agility

Living organization with modular plug-and-play structure that adapts to changing market conditions, balancing speed, flexibility and efficiency.

Brand Activation: Bringing Brands to Life

Meaningful consumer engagement integrated in consumers’ lives through deep insight, agile innovation, and authentic, relevant brand stories.

Source: BSM Executive Interviews; Accenture Research


45


However, brands must build new capabilities to win in the marketplace: larger brands must invest in such capabilities more than emerging brands due to their leadership role in the marketplace.

CAPABILITYRequired Mastery by Brand Type

Leading Retailer Emerging

Con

sum

er In

sigh

t &

Stra

tegy

Continually Renewing Market and Consumer Awareness: Holistic, data-driven external outlook that continually scans the market and identifies disruptive opportunities.

Compelling, Balanced Portfolio: Clear and disciplined brand portfolio strategy.

Bran

d Ac

tiva

tion

Agile Innovation: Deep consumer insight drives rapid product/service/business model innovation.

Consumer Intimacy: Hyper-relevant consumer engagement creates authentic brand stories and meaningful relationships.

Consumer-Centric Omnichannel: Brand alignment across proliferating array of business models based on consumer occasions.

Ope

rati

ng M

odel

Agi

lity

Market-Adapting Supply Chain: Demand-sensing manufacturing and supply chain balances flexibility and efficiency.

Living Organization: Nimble and modular organization that supports multiple business models with diverse strategic objectives.

Ecosystem Mastery: Design, form and manage ecosystems for value creation.

Source: BSM Executive Interviews; Accenture Research

About Barkley

About Barkley At Barkley, we are committed to knowing the modern consumer better than anyone. We take pride in future-proofing business models and modernizing iconic brands. However, we are more than an ad agency. We are integrated business partners who are analytic and innovative at the core, using data to drive marketing conversation

and strategies. This culture of innovation allows us to partner with our clients to create the solutions of the future. Our emerging technology innovation practice has built and deployed new technologies that create more engagement with the savviest generation of consumers we’ve ever seen.


47


About Authors & ContributorsBrad Hanna | [email protected] is an Executive Vice President and Director of Business Strategy at Barkley. Brad serves as senior advisor and strategy lead across a portfolio of major brands. He has played a vital role in shaping the research and strategy design projects for Barkley, as well as collaborating with FutureCast on major projects since 2011.

Jeff Fromm | [email protected] Jeff is President of FutureCast. Jeff has co-authored two books on Marketing to Millennials and a new book on Gen Z.

Chad Nicholson | [email protected] Chad leads Barkley’s Business Strategy team, responsible for providing deep insight into factors affecting overall business and brand performance. Focus areas include food and beverage categories such as meat protein, dairy, produce and alcohol beverages across retail and food service.

Accenture and Jefferies contributed to this report through the Brands Still Matter Survey and Consumer of the Future Survey.

Resources

Resources

Credits

Production

Arthur Cherry Associate Design Director

Sara LeutyDesigner

Anh Truong Designer

Contact

Joe Sciara EVP of [email protected]

Editorial

Jennifer MaziWriter

Eli Lafollette Designer

Joni Thomas Designer

Max Jaffee Designer

Danielle Smith Proofreader

1 Brands Still Matter Survey (2018). Accenture Strategy; Jefferies.

2 BSM Executive Interviews (2018). Accenture Strategy.

3 Consumer of the Future Study (2018). Accenture Strategy; Barkley; Jefferies.

4 Marketing to Gen Z (2018). Jeff Fromm; Angie Read.

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Insights on Fast Food, Consumer Packaged Goods, Fashion & Apparel and Personal Care & Beauty

Consumer of the Future

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