The billion dollar question right now is: “How can your brand adapt to the downturn sweeping the world’s economy?” While the world waits impatiently for a vaccine that will restore us from this “new normal” and allow us to live safely as a community, the best remedy is to adapt to life apart. And that means a big change to consumer behavior and business in general.
Around the world, mobility restriction measures have been imposed to protect the health of our communities. As a result, millions of people are staying home and businesses are being shut down temporarily.
With physical stores closed, online commerce and direct-to-consumer businesses are naturally experiencing a surge. In fact, as Joe Mandese at Mediapost suggests, “D2C marketing could actually benefit from U.S. consumers shifting more toward eCommerce and digital shopping to avoid brick-and-mortar contact.”
From a categorical perspective, it is pretty obvious that consumers are favoring survival essentials. Phenomena like the “toilet paper wars” are becoming part of pop culture. However, there’s a much deeper discussion to be had concerning how different verticals such as apparel, beauty, electronics, and others, are experiencing the impact of the pandemic. Not every category is going to do well automatically.
Businesses that sell swimwear would normally be heading into their peak sales season right now. But with many indicators that lockdowns will continue through the summer, sales are likely to be disappointing this year. On the other hand, the loungewear category, is all of a sudden getting more popular as people working from home look for ways to be both comfortable and presentable on camera.
“Who are the customers who will stick with us in a downturn?”
Changes are happening fast and things might not return to what they used to be so soon, or ever. As Brian Wieser, global president of business intelligence at GroupM says talking to AdExchanger, “[eCommerce] might become more of a default way to shop for some product categories; once a new habit like that starts, it might not shift.”
So whether your business is doing well or poorly, there’s some chance this change will stick. If your brand is experiencing losses, the only thing to do is to adapt and move forward, finding ways to regain performance as you go.
In the past, we’ve observed brands riding out downturns with broad discounting strategies. This is resultant of a “How do I keep all my customers?” mentality, and is unfortunately not going to help you if we expect behavior changes to be permanent. Not to mention, doing this makes it difficult to tell who your most valuable customers are, and who will stick with you in the long run.
So instead of asking “How do I keep all my customers?” ask, “Who are the customers who will stick by my side?” Then instead of offering discounts to everyone, the next steps become getting to know your customer base really really well and getting your marketing finely-tuned to your best, most loyal customers.
This is where we come in.
Before the pandemic and consequent downturn happened, Velocidi was already helping our clients identify their best customers, fine-turn their targeting, increase return on ad spend, and increase sales.
We supply your marketing team with audiences of ‘most-likely buyers,’ created from machine-learning predictions based on real-time customer behavior. The current circumstances of the economy make the ‘real-time-ness’ of the data even more important. All of a sudden we can’t predict customer behavior from data just a few weeks old.
The customer’s perspective
A little while ago as we were trying to predict how the next few months would play out for our company and our clients, we decided to ask our own team how their shopping behaviors had changed as a result of the pandemic. We are a small sample, but it seems like our shopping choices pretty much line up with expectations.
One shouldn’t give in to relying on anecdotal stereotypes, but there are things to be learned from assessing the experiences of those within our community. Therefore, we conducted an internal survey about how the current situation is impacting the consumer choices of our colleagues at Velocidi and discovered a few things that help understand how ubiquitous the changes are.
For instance, we’ve all purchased things to help us work, play, and relax at home, like home gym equipment, a proper office chair, a microphone to make long-distance communication easier and even board games. Another thing we’ve all experienced is that things we didn’t think about before are suddenly hard to get. “Even frozen vegetables”, as pointed out by one of our software engineers.
Keeping up with consumer behavior shifts isn’t necessarily complicated or difficult. The data crunching and behavior prediction side is, which is why we make it easy with machine learning. But on another level, we’re all naturally empathetic to people’s current circumstances. The first step to translating that empathy into your marketing is to get customer segmentation right, so you know you are talking to the right people with each messaage.
We’re all in this together and Velocidi is ready to support you and to help your business navigate this downturn period. Please, do not hesitate to reach out to us for additional information or questions. Velocidi is by your side so that your growth journey doesn’t need to stop.