Summary
Under the influence of the pandemic, most buyers change their consumer behaviors. Aspects such as the level of expenses, the way of purchasing, and the preference for certain groups of goods are subject to revision. In this regard, marketers must be flexible and adapt to new trends. Particular attention should be paid to creating the consumer value of the product, understanding the unique needs of customers, and developing new ways to communicate the value of a product or service. The growth in the transition to online shopping accelerated at times. Millions of conservative shoppers changed their buying habits due to the COVID-19 pandemic and demands for social distancing or isolation, working from home, and fears of endangering their health. Most marketers can benefit from this situation as the web is an excellent tool for attracting new loyal customers.
New Consumer Behaviors and Marketing Strategies
COVID-19 pandemic is changing consumer behavior, attitudes, and preferences in many different ways. First of all, the lockdown affects the income of households around the world. In the UAE, consumer perception trends differ from global trends; according to a survey conducted in June 2020, 61% demonstrate confidence in the country’s economic recovery after the end of the pandemic (“Survey: UAE consumer sentiment,” 2020). By comparison, there is a growing concern about earnings in the US, according to a survey conducted in March 2020.
The instability of the financial situation is the cause of mental health problems, with 35% feeling anxious and depressed, 24% feeling anxious, and 5% feeling depressed because of the COVID-19 pandemic (“COVID-19 Crisis,” 2020). 59% of survey participants believed they had savings to pay their bills for three months if they lose their employment, and hourly employees indicated one month (“COVID-19 Crisis: McKinsey consumer,” 2020). 15-18% saw their incomes decrease significantly, and 2-9% lost their jobs (“COVID-19 Crisis,” 2020). These data suggest that shopping preferences are focused on buying essentials like groceries and clothes and paying bills.
However, fears and declining purchasing power are not observed for all segments of consumers. Despite severe problems for about a third of the US population, 52-64% of incomes stayed the same or increased (“COVID-19 Crisis: McKinsey consumer,” 2020). For this group of buyers, it makes sense to talk about changes in purchasing behavior regarding the way they buy goods. For example, in Latin America, 13 million people made their first e-commerce transaction in times of pandemic (Arora et al., 2020). Increasing numbers of people were choosing reduced-contact ways of buying products and accessing services. Online sales grew 7-8% percent in the UK and Italy, and this tendency is likely to remain (Arora et al., 2020). Therefore, the marketers need to conduct crisis management of their businesses and revise them considering online sales opportunities.
Online purchases are made with the expectation of more personalized offers and under the influence of a new state of mind, as customers have more time for thoughtful purchases. Changes in buying behavior open up opportunities for e-services, including banking, media, and entertainment. Platforms that sell services like buying a house have a good potential for uniting efforts throughout the industry (Arora et al., 2020). Online entertainment is another pandemic-related trend that can stay unchanged in the future since groceries, household supplies, and entertainment at home were the only types of products and services that saw an increase in sales (Arora et al., 2020). Therefore, marketers have a relatively wide range of options to transform their businesses and increase agility.
Rediscovering and rethinking customer loyalty is another popular trend. Business experts point out that the increased attention to customer loyalty is due to the many opportunities the network offers in this marketing area (“Customer loyalty,” 2020). In particular, marketers are advised to break through the informational noise and reach the target consumers by applying the strategies of predictive analysis to target specific purchasing behavior (“Customer loyalty,” 2020). It is also essential to be very clear about target customers and their goals and objectives associated with purchasing the product to create unique value propositions (“Customer loyalty,” 2020). As a rule, marketers decide to rethink marketing strategies aimed at customer loyalty if the level of demand does not meet their expectations or if they feel that their techniques seem outdated. Greater attention to the buyer’s needs is a win-win, especially given the financial pressures and constraints placed on consumers’ purchasing power.
Understanding which methods effectively adapt the marketing strategies to new customer realms determines the victory or defeat of a brand in the market today. Given the changing purchasing patterns, marketers are advised to reinforce positive new beliefs, shape the emerging habits, and sustain the newly adopted ones (“Understanding and shaping consumer behavior,” 2020). Customer behavior analysis and aligning of messages sent through various channels are also crucial. In general, according to the experts, marketers should change their approaches and influence customer behavior, direct them in the desired ways, and ensure the new behavior is sustained and subsequently analyzed for further analyzed experiments. Therefore, the marketers are expected to work with consumers on four levels – communication of product value, impacting consumer behavior, sustaining the newly adopted consumer habits, and analyzing the related data for marketing tactics and strategy improvements.
Observations and Opinions
The decline in purchasing power and the trends associated with the employment crisis did not arise during the pandemic but long before it. Some scholars emphasize that in 2016-2017, buyers demonstrated a relatively new type of behavior, cutting back and trading down on a variety of goods (“Saving, scrimping, and… splurging,” 2016). Scientists observed the highest trading down tendencies for bottled water and home cleaning products. Buyers from the regions of Latin America and South Africa showed trading down tendencies in groceries items. The buyers changed their eating habits in the US, opting out of home cooking from raw products instead of visiting restaurants or buying convenience foods. At the same time, many buyers, especially in Mainland China, have increased their cosmetics spending. There were trends in sustaining loyalty to favorite clothing brands, but buyers closely followed price discounts, promotions, and sales.
General trends, especially for Latin America and South Africa, and other Asian countries, included increased time spent seeking the best value proposition. To sum it up, worldwide, 53% worried about job loss in the next year, 28% were finding it harder to make ends meet, and 26% were living paycheck to paycheck, while 33% were optimistic about their household finances, and 25% were confident about the country’s economy (“Saving, scrimping, and… splurging,” 2016). Mexico and South America, South Africa, Eastern Europe, and the Middle East showed the highest tendencies of employment anxiety, 66-71%. In contrast, North America and Mainland China showed lower employment anxiety trends of 35% and 43% (“Saving, scrimping, and… splurging,” 2016). Based on this information, online marketing strategies may be general for marketers worldwide, but a decline in purchasing power will affect preferences for product groups. In addition, the price and value of the product will be the determining factors for purchase.
Thus, the general tendencies in consumer behavior were analyzed in detail. Marketers should consider that most customers shifted to online shopping and adopt the new marketing strategies accordingly. The decline in purchasing power must be met with new approaches. In particular, marketers should focus on customers’ unique needs, and the functional value of the products, effectively communicate their value offer to customers and reduce prices to encourage more sales.
References
Arora, A., Dahlström, P., Hazan, E., Khan, H., & Khanna, R. (2020). Reimagining marketing in the next normal. McKinsey Article.
COVID-19 Crisis: McKinsey consumer survey insights. (2020). Web.
Customer loyalty: The new generation. (2020). Web.
Saving, scrimping, and… splurging? New insights into consumer behavior. (2016). Web.
Survey: UAE consumer sentiment during the coronavirus crisis. (2020). Web.
Understanding and shaping consumer behavior in the next normal. (2020). Web.