No matter the industry you’re in, 2020 has led to changes in consumer behaviour. Some online businesses have thrived under intense circumstances, while many have struggled. In order to continue to be part of the former, it’s essential that you understand your customers.
In this article, we’ll cover how consumer behaviours have evolved in the last year and provide some insight on innovative trends for you to adopt — such as promotional marketing and influencer partnerships — to help you keep your current customers and acquire new ones in the future.
Consumer purchasing priorities in 2020
Simply put, the COVID-19 pandemic has significantly altered how and what many consumers buy. This behaviour shift is a result of a change in priorities and thinking — and it’s had significant effects on retailers and supply chains worldwide.
For example, research from Accenture shows that customers are spending less at brick and mortar stores and turning to online shopping instead. It also shows that their spending is shifting towards basic needs and essentials (rather than purchasing things for enjoyment).
Additional research by McKinsey shows that consumers are purchasing more on convenience and value than in years prior as well, meaning that they’re thinking carefully about what they get for their money.
These are both the result of high levels of uncertainty about the economy:
However, this trend isn’t true for everyone. Some consumer groups’ spending habits have stayed the same but just shifted online.
This means it’s more important than ever for businesses to get rid of a “one-size-fits-all” marketing mentality. Businesses must study how their specific consumer base is reacting and deliver custom messaging if they want to succeed in reaching tomorrow’s consumers.
What were customers buying most in 2020?
Mckinsey’s research indicates that different regions of the world saw different trends in spending. However, in general, consumers shifted their spending towards things like health and hygiene products, groceries, and household essentials.
Accenture’s research also shows that reducing food waste (i.e. purchasing less food to start with and saving money) became a top priority as well. That said, grocery expenditures still increased worldwide, as shown in the research from McKinsey.
It’s also worth noting that spending on home entertainment was also up significantly across the board worldwide in 2020. This, plus reductions in spending across categories like jewellery, fashion, and restaurants are important to note, as it indicates that more people were prioritising spending on things around the home (since fewer were going out).
Future buying trends to be aware of
With the variation of buying behaviour in different industries throughout 2020, it’s clear that there’s no one certain way that buying trends will go. However, we can say with confidence that it’s the brands adapting to changes quickly and with flexibility that are the ones to come out on top.
So what are some of the behaviours that brands should look out for?
Based on the behaviour over the last year, it’s clear that more time spent at home has led to consumers spending more time on wellness, as well as certain apparel such as loungewear. Health and beauty brands, as well as apparel brands, need to be prepared for this by targeting consumers in the right way, using online strategies that give consumers what they want — more on these strategies below.
Car sales may rise with renewed interest in personal transportation. This is likely to hit the used car market first, but could translate into a faster recovery for the auto industry which was initially hit rather hard.
The most uncertain vertical that looks slow to bounce back in the coming months is the travel industry. Conversions and revenue initially took a hit, and seem slow to recover. Brands must adapt to the uncertainty that consumers feel — many travel brands are looking to offer staycation packages that don’t involve flights and offering promotions to entice potential customers. It’s also clear that many consumers only feel comfortable booking with merchants who offer fully refundable cancellations or fee-free modifications. This is similar for the hospitality sector and for recreational activities. So if your business operates in these industries, it’s important to be aware of these expectations and be ready to offer customers flexibility.
It’s critical to remember that no matter the industry, many consumers are still prioritising convenience as well, and are expected to continue to do so long-term. Many experts have predicted that the increase in online shopping is a trend that will continue to accelerate in the future.
Here’s how these buying trends will affect the marketing strategies that eCommerce businesses should use moving forward.
As more people turn to online channels for both shopping and entertainment (web browsing, social media, etc.), utilising influencers to reach audiences will become more important — especially because consumers are also more careful with their spending.
For example, research shows that referrals from friends that a consumer trusts are incredibly powerful for swaying their purchase decision towards specific products and brands. But it’s not just friends — it could be any third party. Especially for millennials, of whom 40% say their favourite YouTubers understand them better than their real-life friends!
Simply put, partnering with influencers for giveaways, competitions and promotions will be an important part of your marketing strategy moving forward (new technology like Uniqodo now makes this easier than ever too).
Affiliate marketing will increase in importance for the same reasons that influencer marketing will — cautious spending, more time online, etc. So as part of your marketing strategy for 2021 (and beyond), it’s important to develop partnerships with other online entities like:
Bloggers. 77% of internet users read blogs, so they’re a great way to reach new audiences with your products and services (just like you would with an Instagram influencer).
Coupon Sites. 31 billion eCoupons were redeemed worldwide in 2019. So they’re definitely worth looking at from an affiliate perspective if you have the ability to prevent code misuse (Uniqodo makes this easy).
Review sites. Product reviews are helpful for providing a referral just like an influencer would (assuming the review is positive). They are certainly worth your time to pursue from an affiliate standpoint.
Each of these can help you reach consumers more on their terms, which helps you more easily earn their trust when their guard is up.
Get creative with promotions
Before the pandemic, 74% of customers admitted that promotions are a top factor when making purchasing decisions online. And although specific data hasn’t been compiled to prove it, given the increase in conscious spending that consumers are displaying, it’s probably fair to say that number has only increased.
However, while promotional marketing should be an important part of your marketing strategy for 2021, simple discounts aren’t enough. They’re too predictable and they don’t necessarily increase consumer trust, which is essential right now (sometimes they even do the opposite).
That’s why it’s incredibly important that any promotional campaign you execute also drives more advanced business outcomes like increasing customer loyalty or additional referrals.
To do this, you’ll have to get a little creative with how you approach and build your promotions beyond just a simple discount (here are 4 advanced promotional marketing strategies on how to do that).
Note: This is why access to Uniqodo’s promotional experts is included with our software! With years of industry knowledge on promotional marketing, consultants at Uniqodo can help you create the most effective campaigns.
Key Takeaway: listen to your customers!
While things are returning to a level of normal again, it’s still important to stay top of trends that are likely to linger on as they do. And to do so, it’s critical that you listen to your customers and stay on top of the ways that their behaviours and mindsets are shifting. Surveys and feedback will help, as will monitoring your data and seeing what they’re buying.
Using the right tools will also make this much easier as well. And if you’re running promotions, Uniqodo makes it really easy to get the data you need to stay ahead of the curve. Learn more in our free eBook — Ultimate Guide to Using Promo Codes.