How Smart Businesses Can Adapt to Consumer Behavior and Marketplace Trends
Think you know what your customers want? Think again. Much has changed since Covid-19 arrived on the scene. The fallout from the pandemic and an ongoing shaky financial outlook for businesses and families have pivoted how we all think and live.
Nearly 80% of Americans experienced an economic loss from unemployment, the recession, and other hardships during the peak of the pandemic. Spending habits shifted when finances took a hit and consumers naturally remain skittish.
With budgets out of whack, and shortages of everything from food to cars, many consumers are rearranging priorities and lifestyle choices. Businesses today need to know what customers want and expect from them in order to adapt to consumer behavior changes and properly market their products and services.
How companies can adapt to the biggest customer behavior shifts
Happy to be home
Consumers today are increasingly looking for ways to make their homes comfortable for both work and play. According to a study by Houzz, 55% of homeowners plan to renovate their homes this year. Businesses can adapt by promoting products and services that improve life at home. Target the most popular room renovation project: kitchens. Products to focus on for marketing include cooking appliances, game room equipment, home bars, and anything to do with personal entertainment.
Spending less; saving more
The current economy’s impact on households has caused more people to seek discounts, use digital coupons, and make price comparisons. With a new outlook for crisis preparedness, consumers are now 15 times more likely to build emergency savings funds and save more.
Businesses can adapt by finding unique ways to help customers save money when shopping with them. Loyalty/reward programs are increasingly popular and help keep shoppers coming back. Promote buying in bulk as a solution to save money and keep families stocked with items that may become scarce due to supply chain issues.
Online all the time
The pandemic fueled an online buying trend that shows no signs of stopping. In 2021, consumers spent more than $870 billion online, up $762.7 billion (14.2%) from 2020. If you haven’t already jumped into the digital world, now is the time to create an e-commerce website and social media presence. Promote your website and social channels with billboard messages and other affordable advertising methods to adapt to these customer behavior shifts.
Loss of trust
Consumers lost faith in people who gave them conflicting and sometimes incorrect information during the pandemic. Equally disappointing were companies that publicly opposed or supported ideas that didn’t align with their customers. Brand trust and loyalty are too important to lose.
Businesses can adapt to these consumer behavior changes by getting back to branding themselves and promoting their products and services. Offer sustainable products if you want to show your support for a clean environment. Parade your patriotism if you’d like. But stay focused on your customers’ needs—not controversy—and you’ll stay ahead of the competition.More articles from AllBusiness.com:
- 5 Steps to Protect Your Business From Supply Chain Disruptions
- How to Survive Your First Year as a New Business Owner
- 6 Tips for Creating Social Media Videos That People Can’t Help But Click On
- Aptitude vs. Attitude: Which Is More Important in a New Hire?
- Managing Supply Chain Issues: 5 Ways Business Owners Can Adapt
Prepare your business for the unknown
One thing the pandemic taught us is that having a crisis management strategy in place is key if your company is going to survive a future business disruption. Address these topics in your business crisis management plan:
When jobs are hard to find, businesses are in the driver’s seat. But that isn’t the case today. According to the U.S. Bureau of Labor Statistics, there were 11.5 million job openings at the end of March 2022. Help wanted signs dotted the landscape in every community.
How can a company prepare for employee shortages? By creating a positive image that shows an appealing workplace culture. Prospective employees will want to apply to your company if the atmosphere is friendly and rewarding. Spell out your positive work culture in every job description.
It’s also important to offer benefits your applicants and current employees can really use. Affordable health insurance and paid time off typically top the list of perks new employees want. Fitness center memberships, catered lunches, and remote work options are also worth considering.
It takes good, year-round budgeting to keep an adequate cash-on-hand balance to survive hard times. Keeping costs below revenue each month is essential to building capital and investing in your future.
Manufacturers who sell on account (give their clients or vendors time to pay) often struggle the most in difficult times. One way to enhance cash flow is to promote preorders on products frequently purchased.
Retailers can generate cash flow by selling packaged deals that require payment upfront. A good example of this is monthly or annual gym memberships that are due in advance. It’s also important for retail businesses to keep inventories in check. Excess unsold merchandise can lock up funds and impede a healthy cash flow.
A good crisis management plan needs to address how to keep loyal customers. These people are your lifeblood, often your sole means of survival when profits plunge.
Give your most valued customers good reasons to return. Rewards or loyalty programs, as discussed earlier, provide your clients with an incentive to continue shopping at your business.
Don’t be afraid to let all your customers know how much you appreciate their business. Create “customer gratitude” sales or special rebate offers for purchases made during select future dates (ensuring future sales). Those little “thank-you” expressions and generous discounts may put a temporary dent in your profits, but will help secure revenue in the future.
Supply chain shortages
Over the past two years there has been an increase in food insecurity. Businesses look bad when their shelves are empty. It can damage a company’s reputation even if the problem is out of their control. But there are a few things a company can do to minimize the effects of a disrupted supply chain:
- Know your inventory and increase quantities of best-selling items whenever you get the chance. That may mean spending a bit more on extra warehouse space, but it might be worth it in the long run to keep customers happy.
- Keep your eyes open for alternative supplies such as off-brand items or product substitutes. Something is better than nothing when customers are desperate.
- Be honest with customers about the status of product shipments. Tell them when you expect those hard-to-find items to arrive, but warn them how unpredictable the supply chain currently is. They will appreciate your honesty and you will build trust.