Founder and CEO of market research consultancy, Alter Agents; believer that powerful insights can change businesses.
The way we have been buying things and interacting in the marketplace over the past few months seems almost surreal. A trip to the grocery store requires loading up on supplies like masks, gloves, sanitizer and wipes — that is, if we decide to go forth at all. Many are turning to online ordering services for procuring essential items. This sudden and dramatic shift in purchasing habits and decisions would have been nearly unthinkable six months ago.
As the pandemic continues to evolve, our behaviors may have changed for good, driven primarily by our fears. Shopping is no longer fun, but stressful, fraught with new and unforeseen challenges. Fear and anxiety are major influences on behaviors under any circumstances, but this is exacerbated by the current crisis.
Our research finds that, even before the current moment, underlying anxieties around our political, financial and personal lives drive big differences in how consumers shop. To better understand this impact, we looked at how fearful consumers were across several categories: personal fears, financial fears and macro-political fears. For each, we combined several statements to measure people’s overall level of optimism on that topic.
Fear And Optimism By The Numbers
It is no surprise that financial fears play a large part in influencing spending and shopping attitudes. These fears are affecting how much and how often consumers are shopping.
• Spending cuts: High-fear respondents were twice as likely to report cutting back on purchases compared to less fearful consumers.
• Spending frequency: Among those with high levels of financial fear, over half are cutting down on how often they make purchases, compared to just one-fifth among those with low financial fear.
As pandemic-driven data shows, this fearful group is likely to continue growing. An uncertain future is causing people to save more money and spend less, which can have a big impact on brands.
Financial fears are certainly correlated with income, but that relationship is not 1-to-1. Among those making under $50,000, about 20% were highly optimistic about their financial lives. In contrast, among those making over $100,000, 18% were in our most fearful group. This suggests that how we feel about our finances is not solely about the number on our paychecks, but about a perception of stability.
Financial fears may be the strongest driver of spending, but other fears are also affecting how people shop and spend. Higher levels of macro-political and personal fear also drive down spending levels and shopping frequency. For example, we found that those who were concerned about the direction of the U.S. and the world were twice as likely to reduce their overall spending than those who trusted that our leaders were moving in the right direction.
While there is still a strong correlation between reduced spending and personal optimism, this effect is smaller than for financial or political fears. While personal feelings about confidence and enthusiasm are important, they were less influential than institutional forces in the economic and political realms.
The Big Question For Brands
How can brands support customers and address their concerns of shoppers with low levels of trust and high levels of fear? The specifics will be different for every brand and product, but reaching fearful consumers requires speaking to their anxieties and demonstrating that the brand is attentive to their needs.
• Listen to consumers. Seek as much information as possible about your audience on a holistic level. Dig in with multiple data streams to build a picture of sentiment and behavior that is likely vastly different than it was six months ago and continues to change on a daily basis. Talk about fear with your customers, and don’t leave it out of your research.
• Account for context. If the world seems like it’s changing faster than ever, that’s because it is. Information travels fast, and consumers’ attention and priorities can shift quickly in response to events. For marketers, this means that language that sounded good last month can mean something entirely different next month. Don’t take your eye off the ball.
• Take action. Once you have the foundation of good research, determine what actions your brand can take to address the needs of your customers. They have expectations from brands during these uncertain times. Find out what they are, and see if you can deliver while remaining authentic to your brand promise. Many want to know what you are doing to support employees, so take action to protect them.
• Communicate clearly. Be bold and authentic in telling your customers about what you’re doing and why. Communicate practical information often, with messages that reassure your customers, educate them and give them an added feeling of security and stability. Provide as much in-depth information as possible to make your customers feel empowered.
Whether giving people more information or taking action on issues your customers care about, demonstrate that you are in this with them and here to support them. Brands can choose to be a voice of comfort, instilling confidence in their consumers and assuaging fears with the right message. Fear and anxiety aren’t going away anytime soon, so it is important to acknowledge these emotions and come up with strategies to address them head-on.
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Author: Rebecca Brooks, Forbes Councils Member