Any researcher who focuses on understanding human behavior will tell you that most people report that they would do something or they would want something, but in practice they demonstrated dramatically different desires and actions. That’s what makes predicting how customer behaviors will change after COVID-19 so difficult.
One source of truth we can reference is the past – trying to understand how consumer behaviors changed after the last economic recession and how they might shift again after this one, so that you can make sure your business is prepared now.
There are several fascinating research studies conducted and articles written on post-recession consumer economic and social behavior shifts, with some of the biggest identified changes of the most recent recession rooted in the rejection of material things and what the research calls “hyper-consumerism.” Examples include:
- Experiences over things
- “New frugality,” described as: “Consumers continue to buy the products at different prices, in turn they need more reasons to justify the purchase, regardless of price segment of which the product belong. They refuse to buy at higher price unless they clearly perceive quality advantage. If they are loyal to some brands, they prefer to wait for a price drop, by promotions or discount coupons. (1)”
- Brand authenticity and corporate social responsibility
- Recognition of value-in-data, customer-owned data, and right-to-data-privacy
While the current crisis may remind customers who were financially impacted then of the 2008 recession, a new twist – concern over healthcare and personal health and well-being – offers a new motivation for long-term behavior changes. Keeping that in mind and considering the growth and stability of current customer behavior trends, I would expect to see the following behavioral changes persist as we begin to recover from the current crisis:
1. The continued emphasis of ‘experience over things’
Just as we saw more value being placed on personal time, travel, events, 1:1 relationships, etc. post-2008, the current forced social distancing will likely swing the pendulum even harder to the desire for in-person, face-to-face, and meaningful interactions. This might include a recovery of some of the lost foot traffic experienced by physical locations, so it’s important for any organization to think about how to leverage their physical locations or create experiences in physical locations that reflect the value their customers place on such experiences. (That said, ‘things’ might have a moment too if China’s comeback is a leading indicator. The Hermes flagship store in Guangzhou had a single $2.7m reopening day last Saturday.)
2. Deeper appreciation of convenience
We already see trends indicating customers value convenience more than ever. This value is likely to increase if prediction #1 is true. This is where digital transformation projects can serve an organization well. For example, right now there is a priority placed on personal shopping services, within-the-hour delivery, and customer control over last-mile fulfillment. Organizations able to scale to meet these customer demands are doing well. Those that aren’t are at a standstill. Building out integrations and business processes now to serve customers by conveniently coming to them is likely to set a brand up retain those customers post-crisis.
3. Concern about personal space and personal health
It’s been interesting to see how quickly the general public has shifted their perception of masks in public from being ‘creepy’ to being ‘responsible.’ I think this type of perception will carry over post-crisis with a greater demand for interactions that do not require physical touch. Think transactional interactions like contactless payment at point-of-sale or point-of-payment and a higher adoption of electronic data interchange (EDI) in B2B contexts.
4. Greater adoption of digital platforms for communication and learning
For those who are being forced into their first Zoom meeting or digital classrooms, the abrupt shift in medium may be shocking. However, the stage was already set for this type of content consumption with the rise of YouTube tutorials and, in the academic world, online degrees. Learning management systems aren’t a new concept, but once customers acclimate to online learning and the convenience and cost-savings it can bring, it will be hard to go back. This expectation will likely extend to the consumption of material that is still delivered via paper right now like sales sheets, product setup instructions, product trouble shooting, and customer service; and will continue to grow outside current high-adoption cohorts.
All of these predictions will continue to be underscored by what emerged after the 2008 recession, as the overall shift to customer-centricity becomes the foundation for business longevity.
(1) L Voinea, A Filip. Analyzing the Main Changes in New Consumer Buying Behavior during Economic Crisis. International Journal of Economic Practices and Theories, Vol. 1, No.1, 2011.