verde consumer behavior report - november 4, 2020
It’s the day after election day and as predicted, we’re in a holding pattern waiting for the results. As I write this, the top headline on the New York Times homepage reads: ‘Presidential Race on Razor’s Edge, With Key States Still Counting’. It appears the presidential election is playing into the theme of 2020, uncertainty.
Though I don’t have a crystal ball and cannot predict the future, I can provide insight into how current events - specifically, the election in this case - are affecting consumer behavior spending and sentiment. So… The burning question for this week’s report is: How is the election going to further impact consumer behavior trends?
PMG recently published an article predicting how the 2020 election will impact consumer spending. The key takeaway: No one really knows.
It’s predicted that the results of this year's election could take days - possibly weeks - to determine because of the amount of mail in ballots that need to be counted.
For advertisers, the question is: will the prolonged period of time between Election Day and the official results depress sales and consumers’ willingness to shop?
PNG argues that the findings vary greatly because there are simply too many factors to consider. They say it: “requires a certain amount of conjecture and pure guesswork, because no one really knows the answer yet.”
But based on past elections, it is reasonable to expect some softness in consumer spending leading up to and following Election Day.
Hypothetically speaking, follow me here for a second, if it takes weeks to determine the election results, we are looking at late-November, a.k.a. the holiday season - a key selling season for a lot of brands and retailers. What does that mean for the upcoming holiday season - which is already being challenged because of the coronavirus?
A new study from OpenX and The Harris Poll predicts a rise in both consumer spending and marketing budgets for Q4 and 2021.
Despite the pandemic, 58% of consumers expect to spend the same amount or more than recent years this holiday season, with only 17% expecting to spend significantly less;
Even for people who had jobs impacted by COVID-19, 46% expect to spend the same or more than they did in past seasons; and
While 41% of consumers said it’s too early to say what they will spend in 2021, 36% of consumers can already say they plan to spend more in 2021 than they did in 2020.
The survey also supported how the pandemic has expedited the shift to online shopping:
44% of consumers have increased their online shopping; and
37% of consumers said mobile shopping has increased, and more digital shopping is now happening on a mobile device than on a desktop (52% vs. 48%).
The hope is - and cross your fingers - that the delayed election results will not impact holiday spending… Though, if 2020 has taught us anything, it is that the factors that influence consumer behaviors are fluid, so the most important thing you can do is: Go back to the basics. Which is what we’ve been advocating for in the course.
Even if you have an ironclad definition of who your customer is, it’s imperative to check back in on the basics every so often. In consumer behavior and your consumer avatar, the basics are the factors that influence buying and shopping choices. They include:
Personal Preferences, including but not limited to: age, life stage, occupation, financial circumstances, lifestyle, personal values, and personal identity.
Social Contexts, including but not limited to: social circles, friend groups, socioeconomic identifiers, and norms and values for those family and social influences.
Psychological Influences, which may be intrinsic, like perception, beliefs and motivation; or extrinsic, like sensory/non-verbal communication from brands and society. These are more subconscious than personal preference, like using the color blue to convey trust or adding a puppy to an ad campaign regardless of what you’re selling.
Market and Culture Influences, including but not limited to: geographic location, broad purchasing trends, world events, broad economies, and more.
Are you still communicating in an effective way (and place) to connect with your target customer? Has your avatar evolved away from your brand, or perhaps your brand has evolved away from your one-time avatar? Checking in with the basics will help identify when you need small tweaks or more broad strategy changes, and will lead to more and bigger wins.
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