Impact of pandemic on consumer behavior
The COVID-19 pandemic turned the lives of people around the world upside down. It could be seen that the majority of the population began to place health as a top priority, which affected the trend in consumer behavior. The pandemic made its presence felt in the context of economics - people began to be more careful about managing their finances, paying close attention to costs. It might seem that the post-crisis phase is over and now everything will return to normal, but in fact it hasn't even started yet. Every day one can observe a disturbing rise in inflation, interest rates are getting higher and more uncomfortable and the global economy is slowing down more and more instead of gaining momentum. The fact that new variants of COVID-19 appear periodically is also not optimistic. It is quite difficult to determine whether we are still in the crisis that had its origins in 2020 or whether we are already dealing with a new one. The public has been exposed to financial crises many times before. However, during the COVID-19 pandemic, fundamental changes in consumer behavior were noticed that had never been observed before.
A complete change in values
The pandemic has had a huge impact on the values that are most important in consumers' lives. A large part of society has stopped focusing as much on accumulating material resources and instead concentrated on balancing their lifestyles between work and family life. What's more, consumers have no intention of reevaluating their lives even as their material situation changes.
Acquiring more flexibility
The situation over the past two years has forced sudden, unexpected changes. In the beginning, such a state of affairs could be troublesome, but with the passage of time people have become accustomed to the new reality and are also now constantly prepared to change plans quickly. The public has become immune to volatility and uncertainty, being willing to change even long-term intentions and is definitely more open to the unknown.
The potential of the Internet
The last financial crisis before the pandemic took place in 2008-2009. It was relatively recent however the technology and the Internet were at that time far less developed than they are now. The pandemic influenced an even wider use of the digital world. People began to see more of its potential and the possibilities it presents. The Internet provides opportunities to share experiences, get information, learn, work and more. The negative side of this trend is the oversaturation of information, which may not always come from a reliable source and which can exacerbate anxiety.
Changes in consumer behavior and priorities have serious implications for businesses. Consumers are more likely to reach for brands and products that are in line with the values they live by.
They also pay more attention to a brand's activities outside of business - they check how a given company affects the surroundings and the world and verify it with their individual worldview. In practice, this means that companies need to take direction so that their values and actions are in line with common trends, which will contribute to their success.
Sustainable lifestyle is often not among the cheapest. Products that are created with a focus on sustainability are very often much more expensive than their "regular" counterparts. However, this does not stop consumers from being driven by their values and looking for more affordable products or new, more budget-friendly ways to meet their needs. The trend of buying second-hand products has grown significantly in strength. With increased environmental awareness, consumers are also more likely to take action in the name of reducing the waste they generate. According to data provided by numerous environmental apps, interest in controlling one's own environmental impact and tracking the carbon footprint produced continues to grow. Consumers are consciously making purchasing decisions in a way that is best for the environment in the long run. Interestingly, it wasn't that long ago that sustainable products were perceived as low quality or unsustainable. Based on this, it is noticeable how great the changes in consumer behavior have been. Moreover, a growing part of the population has begun to critically verify the information they acquire. They pay attention to the reliability of the source of information and its unambiguity. They also value the personalization of information, i.e. access only to content they are particularly interested in. Top business leaders are aware of all the recent changes that have taken place in overall consumer behavior and are still trying to keep up with them. Companies are focusing on evolving their products to be sustainable. Many of them are redirecting their activities to new technologies or starting to collaborate with other companies that have such tools. These types of activities not only allow the company to earn more, but also bring it closer to consumers.
Increased interest in new technologies
The Internet already played a significant role in people's lives before the pandemic, but over the past two years it has become an integral part of it. This can be observed on the basis of managing the household budget with the increasing use of digital technology tools. The expansion of digitalization creates new opportunities for companies to introduce products and services that meet new consumer needs. Businesses can offer goods that will positively impact the development of innovations and provide customers with rich experiences, however, there may also be abuses such as the acquisition of more sensitive user data. This factor is crucial in terms of gaining consumer trust. The public is much more aware of the topic of sharing their own data, and most seek to avoid sharing too much personal information in order to protect themselves. There may be doubts and concerns about for what purpose specific data is required, how it will then be used, by whom and whether it will be passed on. Providing the user with special protection and reassuring them that it is safe to use a product or service is now essential.
Setting reasonable prices
The prices of certain products may be well beyond the acceptable limit for consumers and as a result they decide to buy cheaper alternatives. This is a challenge for companies because there is a need to set product prices that will be attractive to consumers but also bring in the expected profits. Consumers are also slowly moving away from buying from chain stores and are more willing to purchase goods produced by smaller private companies. The trend is very favorable for smaller entrepreneurs and certainly provides a great opportunity to expand their businesses. This does not mean, however, that private companies are excluded from adapting to consumer expectations and they also should strive to maintain the highest possible quality of products while keeping the price relatively low. For example, a common practice is to adjust packaging sizes accordingly or use alternative sources of supply for individual items. Production strategies and supply chain operations need to be adjusted accordingly. All indications are that the current trends will stay with us for a long time so this should be considered long-term.
Changes to existing sustainability solutions
Up to now, it has been accepted that sustainable products were more of a premium option over regular products, which was also associated with a higher price. Based on recent changes in consumer behavior, it can be seen that more and more people expect just sustainable products to become the regular standard but stay affordable at the same time. Meeting these expectations is not easy and will require companies to implement complex strategies that reconcile the issue of increasing product quality and maintaining a similar price. We should also look at the solutions already in place for sustainability and build scale for them. This action will make them much more cost-effective.
A good example of innovation is alternative energy sources. Investment in this industry is gaining interest due to the increase in the price of fossil fuels due to inflation. The use of green energy could not only be more affordable but also better for the environment.
Use of digital technologies
Consumers today are not as loyal to brands as before. With a wide range of products to choose from, they willingly decide to give novelties a chance. This is no consolation for companies because activities should be intensified so that the customer nevertheless decides to stay with the brand. Inevitably, more money needs to be spent on marketing and a detailed strategy needs to be drawn up. A great tool to use in this situation is the digital world. The importance of the Internet in everyday life has increased even more, which has a very strong impact on the dynamic development of digital technologies. All indications are that despite the end of the pandemic, this progress will not slow down. Companies can, through diverse channels, reach consumers and engage them with a brand in such a way that they feel personally connected to it. This can be done using acquired consumer data that could clearly indicate what actions need to be taken to make the customer experience richer and more interesting. Keep in mind not to erode the trust of consumers who are reluctant to provide sensitive information and pay attention to digital protection. It would be a good idea to present to customers that the data that is provided to the company is completely safe and with it the brand can provide an even more attractive offer.
Transformation of financial metrics
Consumer values have changed dramatically over recent times. A smaller and smaller part of society persists in the pursuit of wealth and the majority has reevaluated their lives significantly and now focuses on a balanced lifestyle. Money is no longer at the top of the list of values, it has been pushed off the podium by the desire to have more time for family, hobbies and leisure. When looking for a job, people are less and less guided by the prospect of climbing the career ladder and high profits, and increasingly focused on the flexibility and purpose of work itself. Companies cannot remain indifferent to these changes. Businesses must face up to new values and adjust their goals and strategies for achieving them. Increasingly, there is a shift away from traditional financial metrics such as profitability or stock price to non-financial metrics such as innovation or diversity. Metrics must be aligned with both employees and consumers in a way that keeps pace with the times.