27 May How Consumer Behavior Changes During COVID-19
Boostability is covering the COVID-19 outbreak through a series of posts designed to help you and your business succeed during this time. You can read the rest of the coverage here.
“The New Normal”. That’s a phrase we’ve all heard a lot over the past couple months. It’s hard to believe that most of the world has been in lockdown for two months or more during 2020. And industry leaders across the globe have realized that the world we knew at the start of the year isn’t coming back anytime soon, or at all. Many policies we’ve had to adapt our lives around truly are the new normal.
Now while we’re all still likely scared at this time of uncertainty because so many things change at once, this isn’t necessarily a bad thing. Our consumer behavior is shifting, and businesses need to plan now for this new world as we all start to adapt to our new environment.
The New Normal
At the start of the pandemic, many had hoped that things would go back to the way it was fairly quickly. But then it continued to escalate. Once we got past the initial round of panic, this new reality set in. But what we didn’t count on was how long this new reality would stick around. And now after 2 months, we’re realizing that things might never be the same as they were when we started the year.
But that doesn’t necessarily mean bad things. It means we all need to make adjustments. And, it also means that changes to your business model need to become permanent. These changes can even lead to greater growth because you’ve optimized your business for the new normal, and for a time period when the consumer psyche dramatically changed.
The additional good news is that consumers are starting to return to businesses. As places slowly start to re-open, consumers are beginning to get back out there. And they’re expecting to find changes. People expect disruptions to their routine. They want to make sure they’re protected, and will go to the business that will take care of their needs and keep them safe at the same time.
The market share is up for grabs. Consumers may have loyalties, but for the first time may be willing to go elsewhere for those who meet their needs and expectations. In the past few months, we’ve experienced the fastest shift in consumer behavior in history. CNBC reports a drop in 16.4% for retail sales in April. Those numbers will take years to bounce back from.
A new McKinsey data study showed that 90% of consumers across 41 countries in North America, Europe, Asia/Pacific, and Africa, anticipate COVID-19 will continue to impact their routines for the next two months or more. In other hard hit countries like in Europe and Japan, 70% of consumers anticipate an impact lasting longer than four months.
The same McKinsey report shows that the grocery industry and home entertainment options are the only industries that saw increased profits in March and April. May appears to be on the same track. But that means a decrease in literally everything else. That includes things like travel, personal care, footwear, retail, fitness, jewelry, and restaurants.
Adjusting Your Business Model
So what does all this change in consumer behavior and psyche mean for your business? It’s important to structure a get back to business plan. No matter where you’re located in the world, take the steps now in order to be ready for if and when a surge happens. Even in places where people are cautiously venturing out, they want to know they’ll be safe.
As we talked about in one of our Search Sessions, you start your new plan by figuring out all your customer touch points. Audit them to see if they still work in our new era. This includes in store interactions. Do you have social distancing measures in place? Do your social media posts reflect the new era and how you’re taking care of customers? What message do the images on your website convey?
You cannot go back to the way your business worked before. For example, if you run a gym, you likely shifted and taught online or social media classes during quarantine. People will still want that once the restrictions are lifted. And once they come back to your gym, they want to see that you’ve taken the time to figure out how to keep them safe. If they see dozens of filled treadmills and no place to sanitize, they likely won’t come back. This same model works at salons, restaurants, any retail store, car repair, legal office. The list goes on. Literally any business today needs to adapt their strategy for the COVID-19 world we now live in.
While we’re not saying that you need to have all COVID-19 messaging all the time. Just be sensitive to the current climate. Show that your business has adapted to current needs. Show that you’re taking care of customers. Because the customer market share is up for grabs, taking these steps to connect to your customers and the local community could bring in so many more customers than you had previously. Loyalty has gone out the window in the age of coronavirus. Take these steps to increase your visibility and connect with more customers.
On Demand Needs
Because our mentality and headspace has changed so rapidly so quickly, those businesses that have found a way to offer their same services, but in a new way, are surviving through this. We gave the example of the gym above. So many yoga studios, trainers, gyms, and more have started offering online classes. It’s both a way to connect and create a sense of community, as well as a way to build up that brand and show the pivot in strategy.
Some businesses previously just serving as a brick and mortar business have moved online. Read our case study on a business that did just this and thrived because of it. You’ve seen examples of pivots where grocery stores now have plastic shields to protect employees. And other businesses that have taken to product demonstrations online. There are so many ways to continue to connect with customers and the public, even if we can’t meet together.
The whole point of this article is that our behavior as consumers has shifted. Because of the tough circumstances, most of us have cut back on what we deem as essential items. We’ve become hyper aware of our surroundings. And we want to have our needs met, in any way we can at this time. Businesses need to adapt as well. Just as you’ve adapted personally, make sure your business is place that you’d want to experience as a consumer.
If you need help with your digital presence, reach out to us here at Boostability!