Aug 04, 2020
Aug 04, 2020
The COVID-19 pandemic has resulted in a distinct shift in consumer behavior. These changes may affect the way people interact in the economy permanently.
We all know that the coronavirus’s impact on the business landscape will be lasting. The International Monetary Fund predicts that through 2021, the virus could shave up to $9 trillion off of global GDP. With the change in the way that we live our lives, we’ve been keeping an ear to the ground to figure out how consumer behaviors will shift, and how we can proactively respond. So far, according to the consulting firm McKinsey, three major trends have presented themselves:
An eye to essentials. This makes sense! During times of economic uncertainty, consumers might postpone purchasing vanity items and superfluous goods. Their focus turns to the foundations and to finding good value for consumer products. For example, in the United States, 40% of survey respondents say they’re more mindful about where they spend their money.
The same survey concludes that overall, U.S. consumers report that they plan to spend more in the short-term mainly on groceries, household supplies, and home entertainment. This tracks with the major curveballs of the pandemic, as people are dining out less, need to clean more often, and are looking for ways to keep themselves engaged at home. And in the same vein, this effect will probably end up being temporary as spending habits expand again once the threat is over.
This means that companies have a good starting point in understanding what buyers are prioritizing, so they can position themselves in a quick pivot. Restaurants are focusing on take-out, the hospitality industry on longer-term “work remotely from a different view” packages, and homebuilders on the ultimate essential: making your living space conducive to a stay-at-home lifestyle.
More online shopping. Fewer people physically visiting stores doesn’t mean demand has dropped off completely! Those looking for a bit of retail therapy are finding their fix online more than ever. Across the same variety of goods analyzed in the above example, every category has experienced growth in online sales. This trend may have staying power; people who hadn’t shopped much online before will now be acclimated to the process and convenience.
It’s clear that more than ever, it’s important to have a strong online presence, whether you’re looking to take dinner orders online or need an e-commerce storefront (such as Shopify or Woocommerce) for your physical goods. Your website should be easy to navigate, have clear calls to action, and should integrate goal tracking so you can tell if your efforts are paying off and capitalize on successes.
Shifting loyalties. Global supply chains have been disrupted by COVID-19, so retailers have less product supply than they otherwise would. As a result, consumers who are typically loyal to certain stores, brands and manufacturers are branching out to find what they need. This could also be a long-term trend, and it’s a great opportunity for brands to position themselves to capture market share.
Make sure your brand has a strong foundation in its mission, vision, and values, and that those are communicated clearly in your positioning. From a consumer’s first experience to the moment they write a glowing review, you need to communicate to them how you align with their goals, fulfill their needs, and enhance their new normal.
In addition, make sure your third-party listings are updated and encourage guests to write reviews. People are shifting loyalties and running to Yelp, Google and TripAdvisor to rave about the experience and how businesses are handling Covid. It's more important than ever for people to see recent reviews revenant to the times.
Some industries have been hit especially hard. While online and essential industries have done well during the pandemic, others are struggling. Anything that requires travel or in-person interaction is still considered risky. This is why industries such as restaurants, hotels and tourism need to be especially mindful of their operations and pay attention to their online presence, branding, and positioning as discussed.
While things might seem doom and gloom and it's certainly not business as usual, there is a lot of room for companies to succeed in this new normal. For instance, safety should be the primary concern for both employees and guests. Restaurants need socially distant seating policies, menus viewable via QR-codes and thorough cleaning regimens. Hotels should focus on creating an environment of cleanliness and safety while promoting outdoor activities with small groups and selling retail on an e-commerce platform.
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