Just like digital marketing strategies, consumer spending habits are changing swiftly with the times. We have already seen the massive decrease of cable and rise of internet streaming, decrease in paper books and increase in electronic readers, so what does this mean for your business?
Understanding the shifts in consumer spending habits is crucial for the longevity and success of your business. Knowing how to tailor your services to fit the changing consumer spending patterns will keep your brand relevant to the times and consumers. Here is how to do it.
Changing With The Times
Popularity with what consumers are purchasing is changing with the times. For example, since the start of the COVID-19 pandemic, there’s been not only a change in what consumers are spending their money on but how much they’re spending.
According to a recent study, consumer spending decreased from -6.9% in March of 2020 to -13.6% in April of 2020, all from the pandemic. It has caused businesses to rethink their marketing strategies to meet consumer needs during unprecedented times, which poses the question: how can you establish longevity for your business during unexpected situations?
The same report noted that spending across all ventures had gone down by 30% since the pandemic, but that doesn’t mean that some business ventures could see growth based on what the times called for. For example, grocery delivery companies such as Lyft, Shipt, and other services hosted by supermarkets saw the most boost in revenue since their service went along with the shut-in, especially when it included contactless delivery.
Even with the pandemic decreasing (slightly) and places opening back up, there has been a shift in consumer spending. Consumers are now more likely not to spend money on luxury items as before and are directly purchasing more essential items, but that doesn’t mean every industry is out of luck.
With the times changing and the way consumers spend their money changes, businesses need to learn how to adapt their plans to fit the needs of consumers with a new normal to ensure relevancy and awareness of their services.
Possible Spending Changes
With the pandemic still creating lasting effects, there are viable consumer spending changes businesses should prepare for in the years to come to ensure they still see revenue. Indeed, in the early days of the pandemic, there was not much spending going on unless it was necessary items, but now with a vaccine available, there could be new spending patterns yet again.
Since restaurants, stores, and other locations have begun to open back up, knowing the possible spending changes will significantly change how your business markets to attract consumers. For instance, CNBC reported that the most eager shoppers are ready to go out again when the pandemic lessens in Gen Z. 30% of Gen Z teens have already expressed their eagerness to shop and spend money, which gives your business and age range to target.
CNBC also reported that one of the popular new trends that will affect consumer spending habits is contactless systems and curbside pickup. With the world becoming so digital-savvy and finding online methods of attracting consumers, it’s a no-brainer to why online ordering has seen such success.
Maybe consumer spending habits (while it has decreased since the start of the pandemic) haven’t changed in terms of how much money is spent, but rather how it’s spent.
How To Prepare Your Business For Consumer Spending Changes
As we mentioned above, thinking of how your consumers are spending their money rather than how much could be the key to ensuring your business’s longevity and relevancy during times as these.
Preparing for your consumers’ spending habits now means considering their needs more than ever and why they need to purchase from you to solve their problems. While essential items are still big-ticket, other items to consider preparing your consumers for, like back-to-school items.
Certain services and products are now deemed more essential than others, which is the message you should send your consumers from the beginning of their buyer’s journey. Forbes has predicted this year to be the year consumers spend their money most on comfortable items from home and necessary for their new normal.
The best way for your business to prepare for these spending changes is simple: rebranding. Companies should take their products and services and rebrand them to market them as beneficial for these times. To do this, you need to ask yourself a few questions.
How is my product/service relevant to daily lives?
How can I market my product to show this?
How would my consumers benefit from having this product now?
While these unprecedented times have caused every business to rethink its strategies, it may be just as simple to simply rethink. Retarget your market in a different way that relates to their daily life and get over the “analysis paralysis” consumers are experiencing when they are hesitant to buy from you.
Take some time to invest in your business’ demographics to look at your consumers closely. Analyze their current positions and what could be keeping them from purchasing your service, which they actually need.
Conclusion
Keeping up with consumer spending patterns means being one step ahead as much as you can. The COVID-19 pandemic has changed the way nearly every industry operates and plans for the future. With digital features being included in business operations, think about how this could benefit your business. How can you prepare your business for changing consumer habits? What changing consumer spending habits do you see affecting your business, and how can you ensure it doesn’t change?
Demographic insights are one of the best tools to see how well you can advance your business for your consumers’ needs based on how the world operates now. Understanding the times and your consumers’ needs is crucial for making it through these changes and still being successful in your efforts to remain a relevant company.