Get ahead of consumer behavior—because it’s changing fast
- Businesses must listen and learn from their customers and quickly pivot to anticipate their next behavioral shifts.
- New “human truths” include the accelerated (and lasting) growth of e-commerce and how you must think more deliberately today about how your products and services promote safety and health.
- The pandemic has created new categories of consumers such as “the Worrier” or “the Rationalist,” each responding differently to the crisis through their spending habits.
- Broad shopping trends across consumer categories—such as an increase in mindful purchasing or a “love for local”—also are likely to outlast the pandemic.
Carrie Yury’s favorite boutique ice cream shop in Long Beach, California, suspended full service during the pandemic but quickly adjusted: It now offers a changing weekly menu of take-home pints of its handcrafted flavors.
As a result, Yury and her husband are buying more ice cream than ever.
By contrast, Yury’s experience visiting her long-time doctor’s office to get test results—where the waiting room was too crowded for social distancing and she felt unnerved by haphazard mask-wearing—prompted her to switch physicians.
These are just two examples of Yury’s personal consumer behavior shifts this year based on how local retail and services responded to the pandemic.
Understanding these shifts is Yury’s full-time job. She studies the motivations and trends of consumer behavior as national director of design research for Fjord, a design and innovation consultancy within Accenture Interactive. The adage, she says, is that tech changes fast while human behavior lags. But Fjord’s latest research points to an accelerated global sea change by consumers. It’s the businesses who may struggle to keep pace.
“Business owners must be adaptable and have a constant learner’s mindset,” Yury says. “That has never been truer than now. You have to be attuned to what’s working and what’s not.”
She says post-pandemic business must get better at:
- listening intently to their customers,
- learning from the feedback, and
- pivoting to anticipate the next shifts.
How well you adapt to consumer behavior may help differentiate you now, says Kara Hoogensen, senior vice president of specialty benefits for Principal®. But soon those changes will be table stakes to remain competitive in the post-pandemic marketplace.
5 new types of consumers
Accenture tracked the rise of five new types of consumers for businesses to consider as they better customize marketing in a more virtual and segmented post-pandemic world. The five types, from more to less common:
- The Rationalist (39%): keeps calm, carries on, and is keenly aware of news.
- The Individualist (22%): tends to stockpile essentials and tries to maintain status quo.
- The Worrier (21%): more anxious about the future and reactionary (or even panicky) with purchases.
- The Indifferent (11%): not as stressed about the pandemic but also less informed than other consumer types.
- The Activist (8%): socially engaged and supports community through consumer habits.
“Throw out preconceived notions about what type of customer experience you were trying to deliver before,” Hoogensen says. “How can you reinvent a more convenient and safer customer experience—not only today but going forward?”
Understanding the consumer trends below, identified by Fjord, may help shape how you transform your business for 2020 and beyond.
How can you reinvent a more convenient and safer customer experience—not only today but going forward?”
Kara Hoogensen, senior vice president of specialty benefits
Shift to the virtual century
Businesses more adept and creative at how their online experience connects consumers not only with products but also people are likelier to create deeper and more meaningful virtual customer relationships that drive demand.
“How does your business serve your customers—both in person and virtually, at the same time?” Yury says. “It’s not one or the other, and you must adapt to that range.”
This so-called “mixed reality” recognizes the massive surge of e-commerce, one of the biggest and most obvious themes of 2020. Some market research forecasts double-digit percentage growth in e-commerce this year even as traditional brick-and-mortar retail suffers a double-digit decline. Accenture’s data shows that infrequent online buyers (those who purchase less than one-fourth of their goods online) already have more than doubled their digital purchases in the pandemic and expect to become only more devoted e-commerce shoppers in the future—a surge of more than 160% compared to their pre-pandemic habits.1
Even big-box retail giant Walmart is merging management of its online and in-store businesses as part of balancing response to consumer behavior across both channels.
What can you do?
For instance, can you make retail sales assistants available for online chats or videoconferencing?
Online purchases by infrequent e-commerce shoppers
Frequency of online purchases for consumers who used online channels for less than 25% of puchases prior to the outbreak:
All in the business of health
Consumers increasingly are assessing nearly every product, service, and experience according to how it affects their health. This may be more overt or subconscious depending on the situation, Accenture says, but it applies to every business.
Consumers everywhere have become so preoccupied with environmental health in the pandemic that it may permanently diminish some of the differences between cultures, Yury says. Consider how everyday use of masks and face coverings has spread worldwide.
“Every company needs to think about how their products and services align—or don’t—to health and wellness,” she says. That should include mental health.
What can you do?
Provide adjacent products or services to enhance the health profile of your core business. For instance, hotels may offer healthier food or (socially distant) yoga sessions to promote better sleep along with deep-cleaned rooms.
Other behaviors to watch
A few more consumer trends identified in Accenture research for businesses to better understand and anticipate:
1. A rise in conscious consumption
Many shoppers are making more mindful, sustainable, or environmentally friendly purchases.
What can you do?
Adjust your supply chain—or more fundamentally disrupt your brand or business model—to be able to market greater sustainability to customers.
2. A growing love for local
56% of consumers are shopping in neighborhood stores or buying more locally, and 79% and 84% respectively see this as a permanent change in their habits.
What can you do?
A smaller local business may want to get more involved in community outreach and support of causes authentic to your brand that will rally customers. Larger businesses can align with various local partners relevant to your products or sector.
3. The home remains the hub
More consumers are cocooning and working from home; this doesn’t have to mean a boon only for hardware stores and furniture outlets.
What can you do?
Yury points to the example of a hospitality company that reimagined its business to produce virtual events—adapting its expertise for our new housebound reality.
“It’s certainly not a time for businesspeople who just want to sit back on their laurels,” Yury says. “This is a time for inventors, innovators, and creative disruptors.”
Source for the graph above: Accenture COVID-19 Consumer Pulse Research, June 16-22, 2020
1 Accenture COVID-19 Consumer Pulse Research, April and June 2020.
Accenture, Fjord, and Walmart are not affiliates of any company of the Principal Financial Group®
This communication provides educational information only with the understanding that Principal® and its employees are not offering legal, accounting, investment or tax advice. Business owners should consult with their counsel or other advisors when making business decisions.
Insurance products issued by Principal National Life Insurance Co (except in NY) and Principal Life Insurance Co. Securities offered through Principal Securities, Inc., 800-247-1737, Member SIPC Principal National, Principal Life, and Principal Securities are members of the Principal Financial Group®, Des Moines, IA.