The pandemic has forced marketers to look at consumer behavior like never before. To stay ahead of the curve, it is vital to understand how the virus has changed the way people shop, eat and interact with brands. This blog post will discuss some of the most critical consumer insights that marketers need to know to be successful in today’s economy.
But first, let’s talk through some definitions.
What are Consumer Insights?
Consumer insights understand what consumers want, need, and think. It understands their shopping habits, purchase behavior, and conversation. This information can be used to improve a product or service, customer experience, and data-driven marketing strategy. Marketers use various tools to gather consumer insights, including focus groups, market research, interviews, observational studies, and social analytics. Essentially they are using integrated analytics.
However, consumer insights must be actionable. That means they must provide information that can be used to make data-driven decisions about products or services, content, messaging, communications, and marketing.
Another way to track consumer insights for a brand is to measure customer lifetime value. This metric has been used for years by companies and brands to forecast future revenue and customer acquisition goals. Customer lifetime value is calculated by estimating the total revenue a customer will generate for a business throughout their lifetime, minus the costs associated with acquiring and servicing that customer.
Emerging Consumer Insights, Post-COVID 19
In 2021, Kelsey Robinson from McKinsey spoke with WSJ’s advertising editor Suzanne Vranica about the reshaping of consumer insights coming out of the pandemic. She talked about four major consumer shifts that will impact the market:
- Consumer spending is on the rise
- E-commerce accelerating the growth
- Rebalancing the “homebody” economy
- The shattering of brand loyalty
The pandemic has caused significant changes in the way consumers behave and shop. Let’s take a closer look at each of these shifts.
Consumer Spending is on the Rise
In response to the pandemic, many consumers have decided to spend their money on things that make them happy. This is known as “revenge spending.” Fifty-one percent of all consumers are now splurging on fashion, apparel, and leisure travel. Higher-income millennials are outspending all other groups in this category.
This trend will likely continue in 2022 and beyond as people look for ways to cheer themselves up after a traumatic experience. Brands should consider tapping into this trend by releasing new products or campaigns that focus on happiness and self-care.
E-commerce is Accelerating the Growth of Retail
The pandemic has led to a 20 percent increase in online spending, with essential grocery shopping seeing a notable increase. This growth is likely to continue in 2020 and beyond as more people become comfortable shopping online for groceries and other essentials.
Brands should consider increasing their investment in e-commerce platforms to take advantage of this growing trend. They should also develop strategies that make it easier for customers to order products online and pick them up in-store.
Rebalancing the “Homebody” Economy
Twenty-eight percent of all consumers invested in home gyms and stereo equipment during the pandemic. Thirty percent of them plan to continue this trend and invest in more “homebody” products.
This suggests that many people are looking for ways to stay at home and avoid contact with other people. Brands should consider developing products and campaigns that promote staying at home and comfortable in your own space.
The Shattering of Brand Loyalty
Thirty-nine percent of millennials tried new brands during the pandemic. Gen Z was even more likely to try new brands, with 49 percent doing so.
This means that many consumers are no longer loyal to the brands they used before the pandemic. Brands should focus on developing values-based branding strategies to win over these consumers. They should also consider releasing new products and campaigns that align with the current zeitgeist.
Three Ways to Track Current Consumer Behavior
To understand how the virus has impacted millennials and Gen Z, it is crucial to track their behavior in three ways:
- Pre-Covid 19 Behavior: This refers to how each generation behaved before the pandemic started.
- Covid 19 Behavior: This refers to how each generation behaved when the pandemic was in full swing.
- Post-Covid 19 Behavior: This refers to how each generation is starting to behave now that the pandemic is winding down.
It is important to track all three of these behaviors to get a complete picture of how Covid 19 has impacted consumer behavior across the customer journey for millennials and Gen Z.
Pre-Covid 19 Consumer Behavior
For millennials, pre-Covid 19 behavior can be best described as “the age of entitlement.” They are the generation raised with the belief that they could do anything they set their minds to. They are also the first generation to be raised in a world where information is readily available at their fingertips. As a result, millennials are very confident and have high expectations for themselves and the brands they interact with on social media.
They are also highly skeptical of advertising and distrust traditional marketing tactics. Instead, they prefer to get their information from social media or friends and family. This makes them a challenging group to reach with traditional marketing messages.
Gen Z pre-Covid 19 behavior can be summed up as “the age of anxiety.” They are the generation that has grown up in constant change and uncertainty. As a result, they are highly anxious and are constantly looking for ways to protect themselves and their families.
They are also very skeptical of advertising and distrust traditional marketing tactics. Unlike millennials, they are more likely to trust information from social media and influencers.
Covid 19 Consumer Behavior
Millennials and Gen Z have changed their behavior dramatically since Covid 19 started. For millennials, Covid 19 behavior can be summed up as “the age of fear.” They are the generation most likely to be impacted by the virus, both physically and emotionally. As a result, they are scared and forced to take precautions that they wouldn’t have considered before the pandemic started. For example, millennials have been slower to purchase homes and travel and were more likely to stock up on food and supplies during the height of the pandemic.
Gen Z is also reacted to Covid 19 but in a different way. They were the first generation that had never known a world without the internet, so they are more comfortable with technology and using it to stay connected. Gen Z is also more optimistic than millennials and tends to take things in stride. For example, when schools closed due to Covid 19, Gen Z students turned to online learning platforms instead of feeling overwhelmed.
Both generations have been impacted by Covid 19 in different ways, but one thing is clear: they are both changing the way they live their lives because of it. This will have a significant impact on the economy and consumer insights.
Post-Covid 19 Consumer Behavior: A Look Ahead
It’s too early to know the full extent of the post-Covid 19 economies, but there are some things we can expect. For one, both millennials and Gen Z will be more cautious when spending money. They have seen first-hand how a pandemic can impact their lives, and they will not take risks with their finances.
Another thing to consider is that both generations are comfortable with online shopping. Gen Z is even more comfortable than millennials and is more likely to make purchases through their phones. This means that retailers need to focus on creating an online presence to reach these consumers.
Finally, both millennials and Gen Z are interested in social responsibility. They want companies to be transparent about their practices and be involved in charitable work. This means that businesses need to focus on sustainability and giving back if they’re going to appeal to these generations.
Covid 19 has had a significant impact on the way millennials and Gen Z view the world. Both generations are changing the way they live their lives, which will substantially affect the economy and consumer behavior moving forward. Businesses need to understand these changes and adapt their marketing strategies accordingly.
Diving Deeper into Consumer Insights & Trends for Millennials & Gen Z
Millennials and Gen Z took the world by storm when social media platforms empowered them to blast the world with their thoughts, influence people and governments, and push back on society in new ways. These forces have shaped their perspectives on life, habits, values, and behaviors.
Deloitte’s recent market research study paints the perfect picture of how the pandemic and societal issues have impacted each generation. The research study titled “A call for accountability and action” surveyed 14,655 millennials and 8,273 Gen Zers from 45 countries globally.
While this data might not be actionable to the customer journey, this market research lays the groundwork for brands to get a deeper understanding of the values of each generation and work to align their brand values accordingly.
Here are high-level insights from the research:
Health and employment are top concerns for most consumers. However, millennials and Gen Zers are more concerned about climate change and the environment. More than 40 percent of millennials and Gen Zs agree that it’s too late to fix climate change and that a brand’s impact on the environment has and will influence their buying decisions.
There is still a stigma around mental health in the workplace. Thirty-one percent of millennials and 35 percent of Gen Z said they’ve taken personal time off due to pandemic stress. Additionally, 40% of millennials and Gen Zs aren’t convinced that their employers care about their mental health and wellness.
Stress is back, and it’s not looking good. Forty-one percent of millennials and 46 percent of Gen Z say they are constantly stressed out. In addition, the pandemic and the effect on the economy have created uncertainty and stress around each generation’s financial future.
No love for brands that don’t make an impact. Less than 50 percent of millennials and Gen Zers think that business is positively impacting society. This means that over 50 percent feel that most companies aren’t making a concerted effort to improve society. The top consumer brands in the US are extremely vocal about sharing what they stand for and communicate in a way that resonates with their customers.
Wealth & income equality are concerning for both generations. Over 66 percent of millennials and Gen Zs see wealth and income as unfairly distributed.
Systemic racism is real. 56 to 60 percent of millennials and Gen Z see systemic racism as a real thing in US culture. At least 20 percent say they have felt personally discriminated against in different situations.
Consumer Insights: The State of the Consumer 2021
If any year has disrupted our lives, it has been 2020, given the pandemic, shelter in place, vaccination requirements, and everything else. One of the things about the report that I like is that they reference third-party sources to reinforce points made in the report.
Consumer insights that are backed by other, third-party and reliable sources are ones that I find to be the most credible and actionable. In this case, they cite the Harvard Business Review. It’s not clear exactly where the quote is coming from, but the report states that during times of stress, consumers buy what is familiar to them–products like toilet paper, hand sanitizer, or McDonald’s. They’re looking for comfort food or commerce, and they are in the market for products and services that are dependable, practical, and, of course, sustainable.
A national consumer study of 13,000 Americans created this consumer insights report. They use machine learning to find other respondents using several online behaviors and contextual data points. This is primary research.
The disrupted consumer is 55% female. 24% have a household income of between 25,000 to $50,000 annually, and 48% have more than $30,000 in discretionary income. In addition, 43% are employed full-time, 17% are retired, and 41% have children under 18.
Here are a few interesting points. First, 30% of the disrupted consumer is Gen X. That is my generation. 30% are also millennials. Third, 26% are baby boomers, 12% are Gen Z, and 2% are the silent generation. I had to look this up, but these are people that were born between the years 1928 to 1945.
Consumer Insights: Values & Psychological Drivers
The top values of the disrupted consumer include:
- Safety in community and nation
- Maintaining traditions
- Being reliable and trustworthy
Their top psychological drivers include:
- Trust from others
- Proving competence
- Optimistic outlook
These data points are fascinating, especially when thinking about the different generations. Considering the social justice issues that the world has been going through over the last 18 months, I find the top value of maintaining traditions to be an interesting data point. However, I’m curious about the actual questions in the survey.
With retail being severely affected by the pandemic, most Americans turned to online shopping at Amazon and other retailers. According to this report, 54% of the disrupted consumer spends more than $20 online per week. It’s also important to note that 80% are on Facebook, and 49% our on Instagram.
In a more recent report called Gen Z shopping habits from eMarketer, 50% of Gen Z use social media to discover new products. This data is consistent with several consumer insights reports I have read.
The Perspective of the Disrupted Consumer
When asked about the current quality of the US economy, 38% believe that the economy is in poor shape. However, 35% think it’s in a suitable place, 17% it’s very poor, and 9% believe the economy is in a good place.
When respondents were asked when life would return to normal, 33% believed it would take more than a year. This was followed by 22% 4-6 months, 23% 7 to 12 months, 11% two to three months, and 8% say never. So much for being optimistic.
A few other data points that I found to be interesting included that 51% of disrupted consumers are highly concerned about the economic consequences of the pandemic. In addition, 62% are worried about the health consequences of the pandemic, and 64% are worried about catching COVID-19.
How to find Consumer Insights
I use a few resources to keep up to date with consumer behavior, trends, and insights–eMarketer, Resonate Gartner, and Global Web Index. As a marketer, it is essential to be aware of the latest trends and insights to create relevant content and campaigns.
eMarketer is a research firm that provides insights on digital marketing and advertising. They have a subscription service that offers access to reports, data, and analyst briefings.
Resonate is a company that helps brands understand their customers by providing customer insights and engagement solutions. Their solutions include surveys, focus groups, ethnography, and more. The top US brands are not just listening to their customers, but also taking action.
Gartner is a technology research company that provides market analysis and forecasts for the IT industry. In addition, they offer subscription services with access to reports, webinars, and podcasts.
Global Web Index is a market intelligence company that provides insights into global consumer behavior across social media, mobile devices, the internet of things, etc. They offer both subscription services and individual reports.
One suggestion I might have to provide additional context to this report is to layer on a social media analysis methodology. This will allow us to analyze what they say they care about on a survey and cross-reference what they talk about in public and on social media.
How Can Social Analytics Be Used to Find Customer Insights?
Using social data to analyze customer insights is a process that can be used to answer important questions about your customers. It can help you understand their behavior, preferences, and needs based on what they do and say. With primary research, the data relies upon how they answer a question. This approach is more about behavior, conversation, and action.
This process begins with collecting data from social media channels and then cleaning and organizing it. You can also apply keyword filters to find specific topics they are talking about, the sentiment and emotion, or how they feel towards a brand.
The data can be analyzed against another audience or the general population to find unique insights.
There are several ways that social media data can be used to find customer insights:
- Analyzing conversation volume and tone to identify positive or negative sentiment around your brand or product
- Tracking keyword mentions seeing what topics people are talking about concerning your brand
- Segmenting customers based on interests, demographics, and psychographics to see how they differ from the rest of your audience
- Comparing engagement rates (likes, shares, comments) for different content types (blog posts, videos, images) to see what resonates with your audience
- Looking at customer behavior (clicking through to your website from social media, filling out a lead form) to see how they interact with your brand online
There are countless ways that social data can be used to find customer insights, and the ones above are just a few examples. By understanding what your customers are talking about, you can create content and marketing campaigns that resonate with them and drive engagement.
And by analyzing how they interact with your brand online, you can better understand their buying behavior and preferences. So if you’re looking for some insights into your customers, start digging into the data!
Using Primary & Social Research
The holy grail of consumer insights is when you can combine primary or secondary research with social analytics. The result is a comprehensive understanding of what people are saying about your product or service, what they think about it, and how that’s impacting their behavior.
You can use social media listening to understand what people are saying and how they’re feeling. This kind of data is precious for brands looking to improve customer satisfaction and loyalty.
By combining primary research with social media analytics, you can better understand your customers and their needs. This information can help you improve your products and services, ensuring that you’re delivering the most relevant, engaging content to your audience.
Q: Is there a difference between customer insights and audience insights?
A: Yes, customer insights are specific to your company, and audience insights are more general. Audience insights can be used to understand any group of people, while customer insights are specific to the needs and want of a particular customer base.
Q: Can social media listening be used for market research?
A: Yes, social media listening can be used for market research and understanding customers and their needs. It’s a versatile tool that can provide valuable data for research projects.
Q: How is consumer behavior different than consumer insights?
A: Consumer behavior is consumers’ actions about a product or service. Consumer insights are the motivations and intentions behind those actions. Understanding consumer behavior is essential, but understanding why they behave a certain way is even more valuable.
Q: Is there an equation to measure customer lifetime value?
A: A few key factors need to be considered to calculate it accurately. These include the average purchase amount, the frequency of purchases, and the length of time a customer remains loyal to your brand.
Q: How do you measure customer experience?
A: Measuring customer experience can be tricky because it’s subjective. However, a few key factors can be used to track it, including satisfaction levels, loyalty rates, and Net Promoter Scores.
Q: Is the Net Promoter Score a valid data point to measure consumer insights?
A: The Net Promoter Score is a good indicator of customer loyalty and satisfaction, but it’s not the only factor that should be considered. Other factors such as feedback on social media and engagement with content can also help you understand how customers feel about your brand.
Q: Is sentiment an accurate measure of consumer behavior?
A: Sentiment can be a good indicator of consumer behavior, but it’s not always accurate. It’s essential to look at other factors such as engagement with content and purchase behavior to get a complete picture.