Why consumer habits should help determine your business goal

Demee Koch is the CEO and founder of the brand THE MOI® quietly disrupting the beauty industry under a no-nonsense philosophy.

People today value their choices highly, and as a result, the era of the submissive consumer has come to an end. Smart companies recognize that their customers have shifted from a passive to an active role in recent years. They have become attentive, informed consumers who make critical purchases based on their social values, forcing producers and distributors to recognize the radical change in the relationship between buying and selling. Companies that understand these unstoppable pressures and are motivated to take action will have many opportunities to build a relationship of trust with their customers based on shared values, paving a common path to sustainable development and a brighter future.

Changes in consumer behavior

Let’s start with understanding what consumer behavior entails. Consumer behavior is a set of interactions between emotions, cognitions, actions, environmental elements and socio-economic and cultural factors related to economic and social exchange processes, in other words, to consumption. Consumers develop habits about what they consume and when and where they consume it over time. Consumption is thus both routine and contextual: consumers’ purchasing decisions are strongly influenced by the context in which they make them.

We have seen how the Covid-19 pandemic has affected consumer behaviour. Their choices have changed and the focus is now on the essentials. Many consumers around the world are seeing their incomes fall and have little hope of economic recovery. As a result, consumers are more mindful of their spending and are focusing more on necessities such as groceries and household necessities. In contrast, purchases for discretionary categories have declined significantly.

The role of brands in the post-Covid purchase process is destined to change as a result of these changes in consumer behaviour. People have been forced to make new decisions as a result of the Covid-19 emergency, and even the most routine decisions have been affected by increased scarcity and urgency. In an era of high uncertainty, it is critical that brands support consumers by helping them explore and evaluate options, reducing the complexity of the process. Customers prefer a single, personalized customer experience.

Brands must demonstrate that they can respond quickly and dynamically to changing customer demands, adapting to new consumer habits while maintaining a high level of awareness and empathy.

Targeted consumers

According to a recent IBM survey, targeted consumers, who choose products and brands based on how well they align with their personal values, now represent the largest segment (44%) from 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 such as sustainability to meet these changing customer demands.

What does it really mean to have a social, environmental and ethical purpose for brands and companies? It means rethinking business strategies based on mere competition and acting together for the common good. The disruption of the world caused by the pandemic has undoubtedly been one of the accelerators of this new view of a brand’s purpose. The new generations of consumers, millennials and Gen-Z, are increasingly critical of businesses, demanding clarity and commitment to take responsibility.

How should companies respond?

So what should companies and brands do? It is a matter of both knowing how to identify problems and working on a concrete and direct contribution to the solution. Companies that act according to purpose will carry out revolutions involving all sectors and all departments of the company. We are forced to rethink every stage, from product conception to packaging, from supply chain to logistics, from communication to sales.

The persistence of the pandemic has had an impact on our way of life. Consumer habits and behavior have never been more dynamic than in the past two years. Companies are now faced with the need to analyze and navigate their way forward in a situation of extreme liquidity, and create a new business model to compete effectively on a national and international level. It is a profound and structural change that in some cases requires a rethink of brand identity and business practices. The roles of companies are more important than ever before in this age of radical transformation, as they must convey trust and credibility through increasingly integrated, ethical and sustainable business models that can adapt to market demand and grow rapidly.

businesstraverse.com Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?