People today place a high value on their choices, and as a result, the era of the submissive consumer has come to an end. Smart companies recognize that in recent years, their customers have shifted from a passive to an active role. They have become attentive, informed consumers who make purchases with a critical eye based on their societal values, thus forcing producers and distributors to recognize the radical change in the relationship between those who buy and those who sell. Companies that grasp these unstoppable pressures and are motivated to action will have many opportunities to build a trusting relationship with their customers based on shared values, forging a common path toward sustainable development and a better future.
Changes In Consumer Behavior
Let’s start with an understanding of what consumer behavior entails. Consumer behavior is a set of interactions between emotions, cognitions, actions, environmental elements and socioeconomic and cultural factors that are related to economic and social exchange processes, in other words, to the act of consumption. Consumers develop habits about what they consume and when and where they consume it over time. Consumption, then, is both routine and contextual: The purchasing decisions of consumers are heavily influenced by the context in which they make them.
We have seen how the Covid-19 pandemic has influenced consumer behavior. Their choices have changed, and the focus is now on the essentials. Many consumers around the world are seeing their incomes fall and feeling little hope for an economic recovery. As a result, consumers are paying closer attention to their spending and are more likely to focus on necessities like groceries and household supplies. Purchases for discretionary categories, on the other hand, have significantly reduced.
The role of brands in the post-Covid purchasing process is destined to change as a result of these consumer behavior changes. People have been forced to make new decisions as a result of the Covid-19 emergency, and even the most routine ones have been affected by increased scarcity and urgency. In an era of great uncertainty, it’s critical that brands support consumers by assisting them in exploring and evaluating options, thereby reducing the complexity of the process. Customers prefer a single, personalized customer experience.
Brands must show that they can respond quickly and dynamically to changing customer demands, adjusting to new consumer habits while maintaining a high level of awareness and empathy.
According to a recent IBM study, purpose-driven consumers, who choose products and brands based on how well they align with their personal values, now represent the largest segment (44%) of consumers. IBM concludes that “brands and retailers have the opportunity to build more profitable relationships with customers — but first, they must prove their worth.” In other words, brands must shift their focus to issues like sustainability to cater to these evolving customer demands.
What does it really mean to have a social, environmental and ethical purpose for brands and companies? It means we need to rethink business strategies based on mere competition and act together for the common good. Undoubtedly, the disruption of the world due to the pandemic has been one of the accelerators of this new perspective on brand purpose. The new generations of consumers, millennials and Gen-Z, are increasingly critical of companies, demanding clarity and commitment to taking responsibility.
How should corporations respond?
So what should companies and brands do? It is a question of both knowing how to identify problems and working to make concrete and immediate contributions to the solution. Corporations that act guided by purpose will implement revolutions involving all sectors and all departments of the company. We are being forced to rethink every phase, from product conception to packaging, from supply chains to logistics, from communication to sale.
The pandemic’s persistence has had an impact on our way of life. Consumer habits and behaviors have never been as dynamic as they have been in the last two years. Companies are now faced with the need to analyze and find their way forward in a situation of extreme fluidity, creating a new business model in order to compete effectively on a national and international level. It is a profound and structural change that, in some cases, necessitates a rethinking of one’s brand identity and business practices. The roles of companies are more important than ever before in this time of radical transformations, as they must transmit trust and credibility through increasingly integrated, ethical and sustainable business models that can adapt to market demands and grow quickly.
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