If you don’t think this country’s in a recession, visit your local mall during a prime shopping period. I spent Presidents’ Day shopping with girlfriends at a local upscale mall. Parking wasn’t the usual nightmare, and only the restaurant at Neiman Marcus was crowded. Equally revealing was the fact that, between the three of us, we purchased only some makeup and a pair of shoes. This caused me to think about the implications of tough economic times on online marketing.
Three Implications for Shopping
To understand how to modify online marketing to meet recessionary realities, it’s necessary to assess how changes in the economy may affect customer buying. Three factors influencing behavior are:
- Purchase-focus changes. With tighter budgets, customers concentrate purchasing on must-have products and services. They tend to acquire fewer impulse items, letting need and purchase price override other factors. As a marketer, this can have an impact on products you choose to highlight and how they’re positioned.
- Product tradeoffs. Due to more restricted disposable income, consumers may make different product tradeoffs. Depending on the type of items involved, these options may vary. It may mean using things longer, fixing up what they have rather than buying new, or trading down to less expensive substitutes. It’s important to consider how these behaviors impact customers’ view of your merchandise.
- Increased time between initial research and purchase. Customers are likely to think harder about each acquisition, assessing need, utility, alternate products, and price. They’ll opt for more just-in-time buying. From a marketing perspective, this translates to more research and consideration online where there’s no expenditure of high-priced gas and less likelihood of making an impulse purchase.
Recession-Proof Your Online Marketing
Changes in buying behavior driven by hard times have repercussions for your online marketing. Here are seven ways to analyze marketing plans to meet these changing needs:
- Monitor environment, competition, and business leading indicators. Closely watch factors that give an early warning that your market’s changing. This means not only looking at top-line metrics but also digging deeper into the details to determine what’s driving those sales. For example, top-line sales may remain constant, but the mix may be shifting to lower-priced products. This can have a big impact on profitability.
- Reallocate the marketing budget. Once you determine which product lines and promotions are working best to meet your business’ changing needs, adjust your marketing budget accordingly. Find places where you can reduce the price point, and be prepared to quickly eliminate or modify marketing plans that no longer work. To a certain extent, starting this process early in the fiscal year can provide a level of flexibility. Prioritize promotions so you’re able to complete important initiatives to move the business forward while maintaining sales. Review each initiative’s ROI (define) and profitability implications.
- Analyze your product offering and customer base. The aim is to better understand how merchandise can meet the target market’s current needs. Look at your offering and consider how to make it attractive in light of customers’ new priorities. With a changing economy, your products may attract a different type of buyer. Customers may opt for less expensive brands, for example, or go more for accessories, such as buying a slipcover rather than a new sofa.
- Revise the promotional calendar. Focus on customers’ changing needs. Take into account cost-driven motivations. Present your offering in terms of budget stretchers. Remember, this doesn’t mean every promotion should be a sale or savings-driven. Think about how to convince buyers that your products are worth the investment and that you respect that these are tough times.
- Plan for a longer decision-making process. When funds are limited, customers tend to wait until the last possible moment to buy. Consider how to be ready when they are. This can translate into guaranteeing you can help them whenever they decide to purchase and are able to provide quick delivery. It’s important to maintain connections with past and prospective customers, both directly and through alternate means, such as social media.
- Brighten and bring fun into people’s lives. During poor economic times, people tend to be more negative and may have more time to spend. Be a bright spot in their lives. This can take different forms and be done cost-effectively, such as a quirky newsletter that helps them cope. A fashion e-tailer could develop a weekly newsletter called “I Have Nothing to Wear: Dispatches to Overcome Empty Closet Syndrome,” to highlight how to accessorize a wardrobe with low-cost additions.
A problem for one business may be an opportunity for another. A marketer’s job is to figure out how to satisfy customers, no matter the economy. In tough times, the nimble can survive and pick up market share, while less creative competitors sit back and bemoan their fate.