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Home as a Hub Can Transform Business Models

7/15/2022
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While consumers in many parts of the world are seeking to release their pent-up demand for out-of-home experiences, more home-centric lifestyles are here to stay. In Euromonitor International’s Voice of the Industry: Consumer Lifestyles Survey (fielded October-November 2021), nearly 70% of respondents said that “work from home more” will be a permanent change even after the pandemic is over, and one in four respondents felt that “spend more time in the home” will be a permanent change. As it has become a sanctuary and a hub for many activities, the home now represents the last mile, requiring businesses to rethink their strategies and even business models to reach consumers in their homes.

Anticipated Changes to Consumers’ Social and Community BehaviourConsumer behaviourSource: Euromonitor’s Voice of the Industry: Consumer Lifestyles Survey 2021

Companies will need to plan for a long-term shift to the home

On the one hand, one of the scars of the pandemic is that there will be fewer venues for away-from-home experiences, as many shops, restaurants, cinemas and other entertainment venues might go out of business. On the other hand, we have all got used to staying at home more, and a greater number of us will want to cocoon and seek comfort in the home. Furthermore, high and rising inflation means that the cost of going out is rising – another factor driving the shift to the home. As a result, the home has evolved to become the hub of everything, including working, learning, shopping, playing and exercising. It has become some sort of a replica of offices, spas, gyms and restaurants.

This may require a shift to new business models and partnerships – for example, more direct-to-consumer selling, bypassing traditional retail, or partnering directly with brands and/or with delivery players instead of retailers to help consumers recreate out-of-home experiences in the home.

Localisation will be an inevitable consequence of consumers spending more time in and around their homes and neighbourhoods. In all industries, we will see the rise of new concepts and new players that offer hyper-local products and solutions, and home-centric lifestyle appeal.

Businesses need to offer help, assistance and guidance

Home-centric consumers will need help, assistance and guidance to make new ways of doing things happen at home. Regardless of which industry they are in, businesses can excite, inspire and engage consumers by focusing their marketing message or product design on consumer passion points – e.g., food, drink, sports, entertainment, music, travel, culture and the environment – and create activities and consumption occasions for the home.

An example of a brand that has done well in inspiring and connecting with home-centric consumers is Burberry. For many years, Burberry was a pioneer in bringing digital into the luxury in-store experience. However, it has been moving away from using technology for the purpose of enhancing the in-store experience. Instead, it is focusing on improving the at-home shopping experience. Following the successful launch of R World (an internal app for inventory management), Burberry introduced R Message, which is a messaging app that allows store associates to directly message top-tier clients. This is one of the steps Burberry has taken to shift the strategic focus away from in-store towards a personalised at-home shopping experience. Furthermore, it has recognised that while consumers enjoy the convenience of online and at-home shopping, they also crave authentic, genuine and trustworthy human connections.

Finally, businesses need to embrace the virtual

In the entertainment industry, many concerts, theatre productions and music festivals in the last couple of years were held as livestream events. Virtual concerts have become more than just a solution to cancelled tours. With rapid innovation and technology, virtual concerts and theatre productions are now cinematic, ticketed events that do not attempt to replace live shows, but are a format in their own right. An example of this is the ABBA Voyage concerts, which are live virtual concerts using technology to incredible dramatic effects.

But businesses do not have to be in the entertainment/performing industry to think along the lines of embracing the virtual. In August 2021, South Korea’s NH NongHyup Bank launched a virtual Dokdo branch to celebrate the bank’s 60th anniversary. Customers can visit the virtual branch on their mobile app, which offers environmental, social and governance or ESG-related financial products tied to the Dokdo islets (located off the east coast of South Korea). They can also visit a virtual gift shop, where they can purchase Dokdo shrimp caught off the islets. The Dokdo branch is reportedly only the first step in the bank’s wider expansion into the virtual space. NH NongHyup plans to launch other similar spaces, such as “branch Asia” and “branch billiards”, and expand the virtual branches into a special metaverse platform, which incorporates the diverse interests of its customers, such as games, communities and finance.

The point is that no matter what industry, businesses need to think along the lines of being creative, and be ready to rethink their strategies (and even reinvent their business models), because going forward, consumers will only increase their consumption of everything virtual.

For further insight, purchase our report,The World beyond the Pandemic: Future Priorities and Preferences

 

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