Buyer Behavior After Coronavirus – New Consumer
The COVID-19 pandemic has changed the world as we know it. In the space of mere weeks, the virus has restyled the consumer goods industry in real-time. It has fast-tracked long-term underlying trends. Companies should study the trends that are emerging as this calamity advances. We can reflect on what consumer goods businesses should do today to prepare for what’s next:
Step 1: Conduct a Scan of Market Factors
Businesses can use the PESTLE principle. It helps them to see what opportunities and threats are out there.
P – Politics. Companies can look at government policy, political stability, and foreign trade policy. They can also consider tax policy, labor laws, trade restrictions, and fiscal policy. Even terrorism and military considerations matter. So do environmental laws, funding grants, and other initiatives.
E – Economics. Here, companies can consider economic growth, interest, and exchange rates. They also have to look at inflation and the disposable income of both the business and its consumers. Taxation is essential, including interstate taxes. Companies also need to consider wage rates and their financial capabilities.
S – Social Considerations. The factors that businesses have to look at here include population growth. They should also keep age distribution and health consciousness in mind. They also have to consider career attitudes, cultural, and customer buying trends. Demographics are also important, as are industrial reviews and consumer confidence. Companies also have to develop an organizational image.
T – Technology. This factor deals with the actual production of goods and services. To get through the pandemic, companies may need to look at emerging technologies. COVID-19 requires a high level of technological maturity to enable the efficient distribution of goods and services. Companies need to be able to communicate with their target market. They also need to look at possible trouble areas. An example is potential copyright infringement. The virus shows no sign of abatement, so companies may need to do increased training to use innovation. Technology is an essential factor. But businesses must look at the potential ROI before making significant investments.
L – Legal Considerations. Under this factor, businesses need to look at health & safety standards. They need to provide equal opportunity employment and advertising standards and consider consumer rights, laws, and product labeling. The labor laws are an essential consideration, as are future and competitive legislation.
E – Environment. This factor is about geographical location and accessibility. It considers the decline of raw materials, pollution, and greenhouse gas emissions, and calls for a reduction in the carbon footprint. It promotes positive business ethics and sustainability. It considers climate and weather and deals with environmental legislation.
Step 2: Understand Buyer Psychology and Customer Needs
This step involves Qualitative Research, which deals with non-numeric data. It goes into Maslow’s Hierarchy of Needs to understand consumer motivations. Maslow’s hierarchy starts with Physiological Needs like water, air, food, and shelter. These needs are at the bottom of the pyramid. It then moves to Safety Needs like employment, health, and property. Next on the hierarchy is Love and Belonging, which includes friendship and family. Next, you need to cater to your consumer’s Esteem: respect, status, and recognition. Self-Actualization, or the desire to be the most that one can be, is at the top of the hierarchy.
To understand buyer psychology, Hofstede’s Cultural Dimensions Theory is useful. It quantifies cultural differences, making them easier to measure. It measures the Power Distance, going from egalitarian to those who embrace the hierarchy. It also measures Collectivism vs. Individualism in markets. You can look at buyers’ Uncertainty Avoidance Index, their Femininity vs. Masculinity, their Short vs. Long-Term Orientation, and their views about Restraint vs. Indulgence.
Behavioral Economics is vital in times of crisis. The marketing of your company has to change. For example, it is better to have only one clear marketing message. Less is more right now. You can engage in Chunking, making small, simple changes to things like your color scheme. These tweaks can improve the performance of your entire marketing message. Other aspects of Behavioral Economics include Price Perception, Choice Architecture, Loss Aversion, and Framing. There’s also Temporal Discounting or Time Present Value. Time is of value now, so many consumers are engaging in impulse buying.
The fourth principle under Behavior Economics is Freudian. It deals with conscious and unconscious decision-making. You need to look at the nonverbal cues your consumers are giving. You also need to know how to angle your marketing efforts. Should you aim at the Id, which deals with unconscious instincts? Or should you go with the Ego, which looks at reality, or the Superego, which deals with morality?
Some marketers go into Sensory Models, for example, the Customer Empathy model. It’s important to know what consumers think, feel, hear, and see, and what they say or do. You should know their pain points, as it will give you an idea of their fears and barriers. Marketers need to understand the principle behind Mapping the Customer Journey. They can go through the stages from Awareness to Consideration to Acquisition. Once you’ve acquired the customer, you can give them the Service that ensures their Loyalty.
You can use these thought leadership strategies to understand buyer psychology and customer needs. Companies often use Qualitative Research for that purpose. If you have a diverse team you can deploy Online Focus Groups and do Mobile Ethnography studies. Thus, you can engage in immersion when conducting Ethnography studies. Ask the “What If” questions and do the brainstorming, so you can narrow down your focus. You can also do Prototyping and Testing.
Step 3: Measuring, Testing, and Validating
This step involves Quantitative research methods, which deal with statistics and numerical data. It includes Product Concept Testing or Testing Prototypes. For this step, we use Surveys, In-Depth Interviews, Agile Sprints, and Market Segmentation. This type of research is reliable and objective. Some businesses prefer to use it because it is faster, more focused, and more scientific.
Step 4: Go-To Market Strategy
These are unusual times. It’s essential to have a company strategy for Customer Acquisition and Retention. Your company should know how it’s going to deal with Competition and the Supply Chain. It may need to decide if it’s going to do any Partnerships or Alliances. You should have an idea of how you’re going to deploy your resources (people, tech, facilities, and capital). Your market strategy also determines your pricing, promotion, and product placement.
Online ordering caused shoppers much pain in the early stages of the pandemic as they faced delayed orders due to increased demand. There were out-of-stock items and misrepresented inventory reporting. These situations are all frustrating under normal circumstances, and they became magnified in the crisis. Companies should use this time of uncertainty as an opportunity. They can assess customers’ journeys and make them meaningful and profitable.