2020 has been a challenging year for businesses. The Coronavirus pandemic, and the measures put in place to control it, have affected companies’ ability to produce and sell, at least in the way they used to before.
Consumers have also been affected in many ways during this period, either by staying indoors, their favorite shops closing down, or having increased economic uncertainty by loss of jobs. While there is a great promise of things changing for the better in 2021, some pandemic effects will still affect how your customers behave for years to come.
Shifts in Consumer Behavior During 2020
It’s prudent for you to look into these changes and adapt your strategies to gain a competitive edge over your competitors.
Below are some ways 2020 has changed consumer behavior.
E-commerce is experiencing one of the best times in its history. Today, 90% of consumers will prefer to have their shopping home-delivered instead of visiting brick and mortar stores.
Rules of social distancing started this trend, with many businesses opting to deliver their products instead of shutting down. Lockdown laws have, however, been lifted across most of the country, but online shopping is still a preferred option for many people.
Online shopping was already integrating slowly into many communities before the pandemic. Its frequent use during the period has highlighted the convenience it offers, increasing its acceptance in the consumer community. Businesses should quickly establish an efficient e-commerce system, if they haven’t already, to ensure survival.
The shift in focus towards e-commerce presents the business with new challenges, including;
- How to retain the customers acquired during the lockdown
- Differentiating your product from your competitor’s in the online market
- Improving efficiency in operating the websites and platforms
- Increasing product reach to affect e-commerce sales positively.
However, getting the solutions will put you at an advantageous position.
2. Rebirth of the Saving Culture
The coronavirus pandemic has highlighted the need for people to have financial safety nets through saving, increasing the interest in maintaining emergency funds and saving accounts. Many people have suffered an unexpected drop in income during the year, either due to loss of employment or business revenue. The increase in pandemic related expenses has also caused the effects felt by those earning regular wages.
Many consumers are still affected by the recession and cannot increase their savings as they have to spend all they earn on necessities. However, those who are making enough money are spending less on luxury items and setting the cash aside for emergencies. This is shown by the increase in the personal saving rate in the US from 7.2% in December 2019 to 13.6% in December 2020.
Spending power among consumers reduces as they save more. The customers will only spend on items they see as necessities and reduce spending on luxury items. Companies should then market their products as necessities to increase the likelihood of being bought by today’s consumers.
3. Buying Local
Many small businesses have faced the risk of closure due to the effects of the pandemic. Some loyal customers in communities worldwide have increased efforts to encourage people to shop from local institutions. This helps increase their chances of survival. This has translated to a significant increase in consumers purchasing from local manufacturers and suppliers.
Marketing agencies and smart businesses have capitalized on this consumer behavior trend by localizing raw materials and labor sourcing. The customers see this as an effort to help the community. By providing employment, either directly or indirectly, they’re positioning their brand positively in the community.
In the age of target marketing, taking advantage of the consumer trend to buy local products is more straightforward. Focusing your marketing efforts on geographical locations you have a presence in and advertising to the community through the media they use most is likely to bear better results now than it would have in the past.
4. Increased Focus on Self-Growth
Covid-19 has also offered an opportunity for many people to evaluate their lifestyle and make the necessary changes. This has increased life-altering decisions, including career changes, an increased focus on fitness, and improved learning culture.
The occasional increase in interest in self-improvement is not a new phenomenon. The most popular new year resolution is usually joining a gym, and it is troubling that 80% of those who make this resolve quit within five months.
Companies should seek to fit their products within this lifestyle change while still making them marketable if the consumer’s behavior changes again. This involves shifting to the production of products that can be marketed to those embracing the self-growth lifestyle while still being useful to those that don’t.
The new consumer mindsets should also affect how the organizations market themselves. Companies will need to find ways to keep old customers (who are embracing the self-development lifestyle) while attracting new ones from static competitors.
The spike in the use of social media is another consumer behavior of note in 2020. The lockdown period experienced a considerable increase in the use of the sites, especially Facebook, Instagram, and YouTube, as people tried to keep busy.
Marketers should view this as a huge opportunity, especially given how easy and affordable advertising on these platforms is compared to traditional marketing alternatives. Social media marketing also offers targeted advertising, increasing the chances of converting leads and acquiring more customers.
Marketing During the Pandemic
The Covid-19 pandemic has already had a significant effect on how consumers behave. Companies have to quickly adapt to these perceptions. Plus take advantage of the behavior change to grow and compete during these challenging economic times.
Marketing agencies (and company marketers) will have a significant say in their clients’ survival or decline (or employers) based on how they handle these customer perspectives. Coming up with strategies to take advantage of consumer behavior changes will increase the organization’s chances of surviving the pandemic.
Are you looking to reframe your business to take advantage of the changing client behavior during the pandemic? Contact us to get started.