How To Tackle Change In Consumer Behaviour During An Economic Crisis
They say it right ‘Change is Inevitable!’ The start-up ecosystem is spontaneous and during these unprecedented and anxious times of COVID-19 pandemic, the challenge is to survive. Therefore, it becomes essential that as a start-up we understand the changes in consumer behaviour and build a client-loved brand during and after an economic crisis. The success of a start-up during an economic crisis depends on the following -- Understanding the changing consumer demand, Understanding the durability of these changes, and Adapting business models to suit the new terms of the customer.
Any economic crisis sees prolonged economic growth, but the customer’s behaviour changes during this time.
Leveraging the Change in Customer Behaviour
In the wake of COVID-19, the unicorns and industry leaders have found strategies to tackle consumer behaviour changes. EdTech, Telecom, MedTech, and VR Markets are on the rise, and India can meet the market demands. The experts believe that the scenario might change, and it is an essential time for investors to act, as digital services are definite to boom post-pandemic too. The other side of the coin, for FMCGs, Entertainment, and Tourism Industry, is not good. While tourism has declined drastically; it might be the case that governments focus on indigenous domestic tourism. The start-ups are tapping into Augmented Reality and Virtual Reality solutions to promote virtual tourism. According to Nielsen India, the industry’s value growth stood at 5.3 percent annually in the March quarter in 2020. Moreover, Multinational FMCGs can learn from their experience globally and implement solutions accordingly.
Sailing through the Crisis
There is no rulebook on how to manage an economic crisis. External factors limit each form of crisis. What works for a start-up to gain market may vary across different sectors, but the giants always follow the most effective solutions. Some of these include:
● Make your business Omni-Present: Businesses should ensure that the economic crisis does not make their brand disappear in the noise. As consumer behaviour changes during the crisis, internet users are ever-increasing
● Modify your business model to suit the market needs: Some industries remain evergreen like healthcare, food essentials, real estate, and home staging, while others like fashion apparel, cosmetics, tourism face a deep downturn. During an economic crisis, focusing on collaboration becomes more important than competition. Various start-ups changed their past services for the better. For instance, a home cleaning scheduling company deployed its services for corporations and apartments during
COVID-19. 1mg has published content on COVID-19, gathering millions of views. They are even providing online consultations regarding health issues. Zostel is the largest hostel chain in
India and has provided solutions for people to interact online. It helps to keep up the spirit of the business
● Deepen & strengthen the relationship with your customers: Start-ups should conduct customer research and supply them with primary services/products. During an economic crisis, customers tend to buy cheaper products. Products or services featuring quick transactions and outreach ensure to enhance the turnovers for local businesses
● Innovate, not imitate: Calamities, test perseverance. Innovation triumphs over imitation. The businesses, understanding the market, and being data-oriented tend to deliver better. Simple, yet effective examples include the start-ups that involve 3D Printing. The industry immediately moved to manufacture PPEs through unconventional methods. Multiple Investors have realized the positives of having stakes in the 3D printing industry. Hence, providing capital in the toughest of times, while being consumer-centric towards medical staff is the need of the hour
Way Forward
Multinationals have always flourished with the perspective of being the most customer-centric brand. Customer loyalty indicates a growing business in this data-driven economy. One needs to ascertain collaborative work instead of competitive when tackling changes in consumer behaviour.The discussed trends have been tested over time. Note down that leaders always get to the other side through rational decisions and their approach towards behavioural transformation.
