How to predict new consumer behaviour in the Covid-19 eraCovid-19 has drastically changed consumption patterns, making it increasingly difficult for businesses to predict consumer behaviour
We are in uncharted waters for business. Covid-19 has drastically changed consumer behaviour patterns; creating new product demands, altering previously predictable models, and placing new stresses on business processes.
There are no playbooks for this situation. So, what can companies do to better understand the new consumer?
Meet your customers. Again.
They’re still your customers, but their needs have changed. To give them the best service in their new circumstances, you need to go back to basics and meet them as if it’s the first time. To do this, it’s all about rethinking the way you approach your data.
Traditional models of consumer behaviour rely heavily on past behaviours to predict future intentions. If you usually see peak sales on a Saturday, all of your business activities will centre around that pattern being the case going forward. It’s the same with sales of BBQs on sunny days, pyjamas at Christmas — you get the picture.
These models are inherently lazy. While they have gone a long way to help companies forecast demand in the past, they do not account for the unexpected. Cue a global pandemic.
While Covid-19 hasn’t rendered all of our previous prediction models useless — we still sleep at night, for instance – it is vital that businesses upgrade their consumer models to meet the new, and unpredictable, needs of the customer.
Let your customer ask the questions
Both online and internal search data can build up comprehensive patterns of consumer behaviour as they react to external events. Your customer support teams will be handling a range of new and unusual queries. This is your chance to spot the trends and react accordingly.
The Covid-era has brought about the need for your customers to acquire new skills. In previous weeks, online searches for how to bake bread, make pasta, cut hair, and exercise have all spiked in interest as consumers attempt to navigate the inconveniences of lockdown and create a more self-sufficient household.
Can you repurpose your services to meet these demands?
Using data science to predict consumer behaviour during a pandemic
What are your customers buying?
Keeping tabs on what consumers are buying is the easiest way to get your data – predicting which products will grow and which won’t is where the gold is.
While some product changes will be obvious — it’s unsurprising that purchase of medical supplies and non-perishable foodstuffs has increased — a 652% rise in the purchase of bread machines suggests that we don’t quite have the skills of Paul Hollywood just yet.
There is also insight to be had in observing the products which have decreased in popularity over lockdown. Camera sales reduced by 64% over the previous 4 months. As social events such as holidays, birthdays and weddings were cancelled, so was the need to bag a new ‘social accessory’ for the occasion.
Think about how your product suite fits around these trends and whether these trends are short term reactions, or long term shifts in behaviour. Can you scale back on a certain line of products or diversify your range to meet a new product demand?
Home is where the office, playground, hairdresser, gym and cinema is
A shift to working — and playing — from home has driven significant demand for new purchases. With 43% of adults now working from home, companies that can help transform our homes into multipurpose activity hubs are rising in popularity.
For example, SpeedTest, Viking Direct, and Who Gives A Crap have seen monumental increases in traffic, as consumers acquire the need to check internet connections, equip their new home offices and source high demand loo roll!
Of course, website traffic is also a significant indicator of the sectors most affected by the pandemic, as sites such as AutoTrader, Rightmove, and Expedia have all seen a considerable drop in viewers.
How to maximise insight from your customer analytics
While household finances have broadly remained stable since the beginning of lockdown, this is a key trend to watch as the true impact of Covid-19 unravels. A reporting of worsening financial situations could manifest itself in reductions in ‘non-essential’ spending and switching to cheaper versions of goods. Try to understand which of your customers might adopt this approach to spending, and how you can adjust your price points if this becomes the case.
Online for the first time
It’s worth remembering that Covid-19 has brought a host of new customers (and new businesses) online — from those who had simply never tried it before, to those now looking to access products and services that formerly, were only available offline. Consider how you can revise your services to make things even easier for them.
This is a chance to dig deep into your digital metrics, revisit your data models and create something that gives you a real time picture of how your customers are using your digital products. If you can make the online process as easy as it can be for the consumer, while baking-in the means to analyse and track their behaviour, you will not only boost conversion but also become better able to predict your customer’s actions and forward plan accordingly.
Show your support
Customer support data can often be the most revealing in determining what your customers want and need from your business. As customers feel uncertainty across all other aspects of their lives, there is a unique opportunity for businesses to provide reassurance and create long-term trust and loyalty.
Customers look for your support in difficult times — can you alter your returns or cancellation policy to accommodate changing plans? The way you respond when your customers are at their most vulnerable will go a long way in showing them that you can be relied upon in the long run.
Good data has never been more important
Listening, understanding, and reacting to changing consumer behaviour requires trustworthy data which you can gain insight from quickly. Covid-19 has presented a unique housekeeping opportunity: the urgency of the situation for many businesses means that the need to break up siloed data, clean out any reporting bottlenecks, and fix up poor quality tracking is no longer just one more task on the backlog, but a critical business need.
Whatever the future holds, the businesses that will survive and succeed will be those that have taken these unprecedented times as the warning signal they are: that digital capabilities are not optional — and now is the time to get data in order. With a strong data foundation in place, companies can remain resilient and agile in the fact of uncertainty, and ensure that understanding the customer really is the top priority.
What will Covid-19’s legacy be for your company?
Tim will be sharing his insight at ‘Understanding The New Consumer’ at London Tech Week on 3rd September at 5:30pm. To find out more, visit here.