Just over a year ago, scientists in Wuhan, China, discovered a novel kind of virus that was triggering respiratory issues within its hosts’ bodies. Within a few weeks, the novel coronavirus disease 2019 (COVID-19, for short) had run rampant, the speed of its transmission bettered only by the bewilderment that spread amidst citizens, leaders, and authorities across the world.
Not only has COVID-19 affected people’s social lives, but this microorganism has turned the macroeconomy on its head as well. These unprecedented times have witnessed an unprecedented change in consumer behaviors, buying habits, and attitudes – and many of these changes are not going to leave with the pandemic.
Let us cast a deeper eye into this changing consumer behavior – and how businesses might tailor their marketing in the coming years, accordingly.
Changing Consumer Behavior
1) Varied response to the crisis:
To say that the COVID-19 has been a crisis – both from a health and an economic point-of-view – would be an understatement. People are still understanding what the pandemic means for themselves, their families, friends, and the wider society.
These differing perceptions of the crisis have triggered differing buying responses. On one end of the spectrum, consumers are in panic-buying mode, hoarding staples, health items, and hygiene products. At the other extreme reside the people who are still largely indifferent and, despite the warnings from their governments and health authorities, are going about their business as usual.
2) New buying behaviors:
The COVID-19 has also changed the ‘what’, ‘why’, and ‘how’ of consumer purchases. It has made consumers prioritize basic needs, leading to an upsurge in demand for staple, hygiene, and cleaning products, while sales of non-essential or luxury items – such as shoes, jewelry, makeup, video games, and electronics – have seen a sharp dip.
3) More conscious spending:
Another way that consumer behavior has been affected by COVID is that consumers are putting more thought into their purchases. There is an increased focus on cost-conscious shopping and waste reduction. According to a McKinsey survey conducted on the Indian consumer sentiment during the COVID crisis, 76 percent of participants stated that they will cut back on their purchases and spend their money more carefully.
4) Online shopping explosion:
With limited mobility, e-commerce has become the new normal for people, and numerous businesses are seeing a significant rise in their online sales.
E-commerce has performed well throughout the pandemic, and has allowed retailers to continue their operations. It is expected that this rise in online shopping is not temporary – we are creatures of habit, and the virus has introduced us to different habits which are going to die hard (if at all).
5) Going local:
The coronavirus pandemic has encouraged consumers to turn to local brands for their purchases. COVID-19 has been forcing a lot of businesses to shut down, and consumers are doing their best to ensure that their local retailers remain functional.
Not only are consumers focusing on shopping from stores in their local areas, but they are also turning to locally produced goods.
6) The rise of virtual spaces:
A lot of employees have been working from home during the past few months, and most are happy to do so. According to a survey conducted by Accenture, 46% of participants who had never before worked from home are now looking to do so more often in the future.
With an increase in virtual spaces, both in terms of working and social interaction, people are reliant on technologies more than ever. Applications like Zoom allow people to stay connected to their families and friends, and, therefore, they are more willing to integrate technology into their personal lives.
Impact of COVID on 2020 Marketing
Of course, with changing consumer behavior – particularly the dramatic rise in online shopping – arises the need for retailers to alter their marketing strategies and approaches accordingly.
Below are some of the ways that COVID-19 has affected marketing approaches and strategies:
1) Greater focus on existing customers:
It might be hard to attract new customers during such economic turmoil and uncertainty. Therefore, one of the best strategies you can adopt is to focus on the customers you still have or those who are sticking with you, despite the economic uncertainties.
Alongside creating services and ad campaigns to cater to their needs, companies are also considering refunding the customers who were on auto pay or had memberships during the lockdown period. True, in the short term, such actions could negatively impact your cashflow. However, once the economy restabilizes and your loyal customer base is ready to shop again, you will be able to recoup that money many times over.
The point is, if you look out for your committed customers during tough periods, they will remember your gestures and look to thank you in some way or the other. Moreover, you will see an improvement in areas such as customer loyalty, social media engagement, and organic traffic.
2) Shifting operations online:
Like we previously mentioned, the lockdowns and limited mobility during COVID-19 has seen an unprecedented rise in online shopping. Therefore, it comes as little surprise that businesses are shifting everything online. In an interview with Forbes, Scott Jones, the CEO of 123 Internet Group, said that there had been a spike in companies wanting to update or create websites, prepare new social media campaigns aimed at home-based workers, and increase their focus on ecommerce channels and trends.
Companies are now understanding that if they want to increase their online presence, now is the time. Even if you already had part of your operations online, there is still so much more that you can explore. For instance, businesses are automating their email communication and even their services. iNECTA, a cloud ERP software designed for the food industry, enables its clients to track lots, receive merchandise, create invoices, and manage their entire food businesses online.
In conclusion, the more processes that can be shifted online, the easier it is for companies to stay connected to their employees and customers, thereby increasing their chances to survive and thrive despite the economic hardships.
3) Running exclusive offers and deals:
As business activity begins to resume, a good way to attract customers is by offering exclusive promotions and deals. You can use the email or your social media platforms to announce such offers.
Not only will these offers keep current customers interested in returning but will also play a key role in bringing in new ones. This idea is applicable to a wide range of industries, including spas, gyms, and theaters, but is going to work best for industries that have been most affected by the pandemic, such as travel or eateries.
The bottom line is, customers would be more willing to invest in your business if they can see some added incentive of doing so. You could even reward your most loyal customers (those who invested in you during a certain period, for instance) by awarding them a discounted membership deal.
4) Investing in social media ads:
More time at home means more time being spent on social media. Plenty of industries have seen their ROI on PPC ads soar during the lockdown periods. Promoting your business on social media sends the message that your business is alive and kicking and is very much prepared to tailor itself according to the new normal.
Facebook ads, in particular, are very cost-effective and affordable, and allow you to portray any changes that you have made to your business and advertise any promotional deals or discounts that you might be offering. Moreover, the platform has sophisticated audience-targeting capabilities, allowing you to reach out to customers based on demographics such as age, gender, location, profession, interest, hobbies, marital status, and so on.
Even prior to the pandemic, online ads played a key role in targeted, engaging, and affordable advertising, but in the post-pandemic world, they provide the most effective way to scale your business.
To conclude, COVID-19 has had a tremendous impact on consumer behaviour. However, instead of lamenting this change and seeing it as a threat to your business, you need to perceive the changing consumer behaviour as a new opportunity to improve and optimize your operations and get ahead of the competitors. We hope that the consumer trends and marketing strategies discussed in this article will prove helpful to you as you explore new ways to flourish in these radically different times and environments.
Unfortunately, the pandemic is still very much rampant, which means that consumer behavior, attitudes and habits are still evolving. For this reason, the use of data is more crucial than ever to retain your current customers and simultaneously, draw new ones.
If you want to learn about marketing trends and improving your marketing strategies, please feel free to contact us.