May 19, 2022

A Guide to Better Understand Customer Values in the Age of COVID-19 for SMEs

The Organization for Economic Co-operation and Development (OECD) defines global events as events of a limited duration that have a global reach, require significant public investment and have an impact on the population and built environment. The COVID-19 pandemic, our most recent global event whose impacts are still being felt, has both directly or indirectly influenced the behavior of the consumers. 

The COVID-19 pandemic has impacted how we work, play, and buy goods (or services). In short,  the world as we know it has been radically forever changed. People's lifestyles, buying behaviors, and the thinking process have been transformed by this global event. 

Current research shows that supply chains around the world have implemented new strategies to overcome the challenges that have arisen due to the pandemic. Retailers have shut down their businesses due to lockdowns. New buying behaviors have emerged on mainly ecommerce platforms allowing businesses with this capacity to offer new goods, purchasing options, or services.

Needless to say, COVID-19 has reshaped the consumer goods sector with businesses adapting how they deliver goods and services. From order fulfillment, to marketing, to sales, all aspects of the business processes and operations have been transformed. 

The Relationship Between Consumer Behavior and Global Events:

Consumer behaviors and their beliefs tend to change very fast in this modern era. The  events that take place around the world intend to upend the livelihoods and lives of people. These disruptions  can affect the daily lives of the consumers in a positive way as well as in a negative way. Ordinarily, the consumers tend to mull over (and research) large purchases, undergoing a rigorous process for researching a  product or service with a large price tag. But nowadays, due to the global pandemic these behavioral trends of the consumers have changed. The majority of consumers leverage this method for making purchases of all sizes due to the rise of ecommerce. Each industry, moreover, has a different response from their consumers. At the beginning of the pandemic general household goods were purchased in excess, often as a result of fear or panic, by consumers. Consumers were focused mainly on buying essential household goods. The focus then was mainly on personal hygiene products and basic household staples. This had a negative impact on sales of non-essential products. Delivery apps have been the main channel for purchasing by the consumers especially for buying groceries.

Social behavior has also been affected due to the pandemic, mainly due to social distancing. Basic needs i.e. connecting through apps for entertainment or to learn almost remain as it was before the pandemic. Yet technology has played an important role in changing the dynamics of such channels. For small businesses, which make up 44% of the U.S. economy, the need to break away from traditional ways of selling and focus on the digital platforms to enhance the experience of buying for the consumer is important. 

Following are the types of Consumer Buying Behavior:

Complex Buying Behavior: 

The consumers tend to engage in this type of behavior when they are in the process of  purchasing a product that is unique, expensive, or isn’t bought very often. During this process, the consumer focuses on conducting deep product research before they make a purchase. For example, complex buying behavior can occur when a consumer is looking to purchase a house as purchasing a house is expensive and that triggers the complex buying behavior of the consumer.  Another good example is buying a mobile or laptop. Both the products are expensive and there are a variety of brands. Consumers feel uncomfortable to decide for a specific brand.

Habitual Buying Behavior:  

This behavior isn’t influenced by any external factors but in fact it occurs as a result of the habits of the consumers. An example of such behavior can be taken as when consumers do grocery shopping. This buying behavior can be seen as a habit and can be considered a necessity as well. To further illustrate this point, let’s look at beverages. Despite the fact that there are several brands of beverages, like cola in the market, specific consumers develop preferences for  specific brands of cola  such as Coca Cola or Pepsi. This is another example of habitual buying.

Variety Seeking Behavior: 

This behavior starts when consumers dislike a product. Normally, the consumer does research in the pursuit of finding an alternative. This type of behavior is usually influenced by marketing which focuses on attracting the consumers using brand awareness campaigns or product launch campaigns. Moreover, this occurs when the consumers find the cost of switching to a different product low. It can also occur  out of boredom.  This often prompts a consumer to move from one brand to another. An example of switching of brands is when a consumer tries out a new soda rather than buying their usual choice. 

Businesses need to understand that for marketing purposes, study of the consumer buying behavior is of utmost importance.  Delving into research regarding customer buying tendency can help marketers to better understand the expectations and the requirements of the consumers. It identifies the very reason why the consumer buys a product or a service. The businesses can eventually design their products and engage the marketing team to promote the products according to the likes and dislikes of the consumers.

Apart from the above mentioned behavior, the following behavioral trends have occurred as a result of the global pandemic:

  • Digital transformation (adoption of digital technology) has been the biggest shift in mobility patterns that have also changed due to  remote work options. As a result, there has been less use of public or private transport.
  • The purchasing behavior of the consumer has moved towards online shopping as well as value based purchasing. In this instance, consumers look to purchase products or services that only provide them with value such as meeting the standard needs and requirements of technological tools.

Determining what’s important for your business during COVID-19

Many businesses globally have closed doors and focused on a new culture of their workforce working from home. This culture was mostly met with positive response from the workforce but some also missed their social communications in their workplace. Most of the employees actually appreciated the efforts of their employees for keeping their safety as the priority and creating a system that is efficient yet safe. 

The main focus of the businesses has been to stay connected with their consumers. The pandemic has had a strong impact on the global consumer behavior and purchasing patterns. All businesses, but especially small specialty retailers,  need to adjust to these changes and adapt procedures that meets consumer needs  and create a relationship that is redefined in a way where consumer needs are created and sustained irrespective of the level of crisis.   

In these challenging times, the small business owners should adopt the following strategies to keep up with the influences of COVID-19:

  • Develop a communication plan to reach out to your clients, partners, suppliers, investors, and other stakeholders. 
  • If you’re a solopreneur or sole proprietor, prioritize your health first. Limit your travel and maximize home office communication and collaboration tools.
  • If you have employees, keep them informed of travel restrictions, government announcements, and offer them work from home options.
  • Our lives have been changed because of COVID-19 in ways that we never could have imagined. As a small business owner, you need to understand the fact that the business plans you had before the pandemic aren't what it is today. You now need a different plan which can identify your problems at the very initial stages of your business and then revise those problems accordingly.
  • Most of the businesses have faced an economic crisis, and to tackle them they have cut their costs from variables like marketing, new hiring's and etc. 

A Computer Scientist who’s a die-hard cricket fan, enthusiastic Fifa player and unfortunately a proud chocoholic.