"Customers' digital buying behaviours are evolving, disrupting value exchange", says a recent report from Gartner. So, what does that change look like, and what do you need to be aware of to protect your company and deliver business growth, sustainability and resilience in 2023?
Gartner identified two critical areas of change to customers' digital buying behaviours for us to explore:
- Routine changes due to inflation
- Proactive customer steps to protect their data
Routine changes to customer digital buying behaviours
It's important to remember that customers' digital buying behaviours are evolving as habits and digital capabilities develop. However, inflation has already had a significant impact on consumer behaviour. Gartner's report noted the following in the past year:
- Consumers buying name-brand products were down by 27%
- The frequency of in-store shopping was down by 19%
- Customer buying store brands were up by 30%
- The frequency of online shopping was up by 10%
- The variety of in-shore shops visited by customers was down by 4%
- The variety of online stores visited by customers was up by 8%
Proactive customer steps to protect their data
With the increase in online buying, or because of greater and growing awareness around data use and data protection, customers are taking more proactive steps to protect their privacy when using digital platforms. Businesses should be aware of these trends and the customer's need for reassurance regarding communications and marketing strategy.
For example, Gartner found that:
- 81% turn off data tracking on phones/apps
- 81% turn off push notifications
- 75% use an ad blocker
- 73% browse in no tracking mode
- 68% disable "smart" devices that record me
- 67% use a junk email account for spam
Unpredictable digital buying behaviours
One of the things that businesses find hardest to contend with is that digital buying behaviours are becoming less predictable. It's difficult for enterprises to keep up with constantly changing consumer preferences, particularly with a regular influx of disruptors waiting in the wings. In addition, market conditions remain decidedly unpredictable in themselves.
- Customers are looking to save time by spending less time in stores and shopping more online. A more hybrid lifestyle has also impacted this.
- More consumers are looking to spend only on the goods they genuinely need.
- Post-Covid, people continue to explore new options for how they live, impacting their buying behaviours.
Anil Mathews, founder and CEO of Near, a global leader in privacy-led data intelligence, told Forbes that post-pandemic behaviours had bounced back to a 'new normal': "with many people adopting a more fluid, hybrid approach. E.g., recent gas price shocks caused 64% of Americans to change their driving habits, according to AAA. Almost all industries have been challenged by this rapid change and must evolve to survive."
A modern renaissance for historic consumer behaviours
The cost-of-living crisis means people are tightening their belts and being much more careful about their buying habits. In some cases, consumers are reverting to historic practices in modern form thanks to the ingenuity of certain businesses.
One thing that has returned is the concept of coupons - although not in the form of newspaper cutouts - now they are digital.
Digital price comparison
Another update in consumer behaviour, according to a Gartner consumer community survey, showed that more than 30% of consumers said they are utilising digital price comparison and coupon tracking tools. Interestingly, this was most prevalent amongst Gen Z and millennial consumers.
Business leaders should be aware of this information as they look towards budgets for 2023 and consider reinvestment and focus on discounting.
Understanding consumer behaviour
Getting the data to track changes in consumer behaviour isn't always simple, and even if it was, businesses need to be aware of three aspects of it:
- General buying behaviours for market awareness
- Consumer behaviour trends amongst your customers for company updates
- The behaviour of individual customers for personalised approaches to the customer experience
Often, the information that businesses have regarding the customer journey is incomplete. For businesses to thrive in the modern world, the emphasis must be on building customer relationships to nurture repeat business. For these two reasons, subscription business models have become increasingly popular. When done well, they allow for a complete view of a customer's journey and behaviours, which helps with predictive analytics and ongoing business adaptation to stay up to date with customer wants and needs, both collectively and individually.
Decision-making around customer experience
What can business leaders do with all this information to protect their enterprises in 2023? More than ever, the evidence suggests that company leaders must take a data-driven approach to understand how to react to changing consumer behaviour patterns. Rather than going on past performance, anecdotal evidence or instinct, with less margin for error, the emphasis is on information. However, crucially that information is about understanding people - what drives them, what motivates them and what they want out of a product, service and their experience.
There are two areas of focus for businesses regarding this human understanding; customers and competitors.
- Understand your competitors principally to know what they are offering your customers by way of experience.
- Place the emphasis on your customer experience because this is where you will build growth and sustainability.
For example, SmartInsights revealed that businesses offering better customer experience earned between 4% and 8% more than their competitors. Another survey showed that companies that lead in customer experience outperform those slow on the uptake by nearly 80%.
In short, focusing on the customer with a detailed, data-driven, consumer-centric approach and a constant willingness to evolve, adapt and improve is the way of the future in an uncertain world.
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