Ask SCORE: Consumers have changed their buying behavior. Is your business going? – Albert Lea Tribune

Ask SCORE by Dean Swanson

As if the last few years weren’t chaotic enough for small business owners, you also have to adapt to new consumer buying behaviors. With the ever-increasing global pandemic of Covid-19, inflation and the impact of lifestyles, today’s consumers have changed where and how they shop. And unless you clarify with them, you will lose their business.

Rieva Lesonsky, one of SCORE’s content partners, is president and CEO of GrowBiz Media. She had a great reminder last week for small business executives and offers some great tips for adapting to your customers’ behaviors.

I share her thoughts; Here are some things you should know.

Shopping Channels: The most obvious change in consumer shopping behavior is where they shop. Brick and mortar isn’t dead, and in fact, in-store shopping has made a bit of a comeback this year, as more homebound shoppers enter the marketplace. The National Retail Federation predicts that total retail sales will rise by $4.86 trillion this year, between 6%-8%. But e-commerce sales will drive that growth, probably between 11 percent and 13 percent.

Mobile commerce (m-commerce), a subset of e-commerce, measures sales made on smartphones and tablets. According to Insider Intelligence, last year’s m-commerce sales reached $359.32 billion, a 15.2 percent increase from 2020. By 2025, revenues are predicted to more than double to $728.28 billion, accounting for 44.2% of US e-commerce sales.

Your retail website should be top-notch and optimized for e-commerce and mobile sales if you are a retailer. As a recent QuickBooks Business Small Business Purchasing Report shows:

• 48 percent of consumers stopped shopping at a store they visited before the outbreak because the company did not have an online store.

• 53% considered using a business but changed their mind because they didn’t have a website.

Social Shopping: Social media is another channel that consumers are turning to more and more. Social Commerce – Buying products directly from social media platforms is growing rapidly. Influence Central reports that 45% of consumers were “open to making holiday purchases directly on a social media platform” last holiday season. Their main social channels of choice were Instagram and Facebook.

A report from Accenture, “Why Marketing is Poised for a Social Revolution,” says global social business sales are expected to grow from $492 billion in 2021 to $1.2 trillion in 2025. Sales by millennials and Gen Z (accounting for 62% of these sales) give social commerce a 17% share of the e-commerce market (up from 10%).

Re-business: Used goods sales are, and are growing rapidly, led by used clothing sales. According to chain Store Age, second-hand clothing, shoes and accessories are already a $36 billion market. It could reach $77 billion over the next four years. Resale growth is expected to be 11 times faster than second-hand retail clothing sales. Consumers are more likely to shop at businesses that allow them to sell their old clothes for store credit (43%) and offer second-hand clothing alongside new merchandise (34%).

But shopping is not just about clothes. In the year In 2020, the home category emerged as the fastest growing resale segment. Sales of second-hand furniture and decor are strong, according to Zillow’s report. Statista projects that the furniture sales market will increase by 70% from 2018 to 2025.

And they project resale revenues to grow 127 percent by 2027, according to the Chairish report. Like much of retail today, it’s dominated by millennials and Gen Z—31 percent say the pandemic has increased their interest in buying wine or spirits. Antique furniture – especially online.

BOPS: “BOPIS,” or buy online, is part of the click-and-collect phenomenon, which has grown from $22 billion in 2018 to $83 billion in 2021. Taking it at least once in 2021.

Retailers love click and collect for many reasons.

• You can monetize your existing retail footprint.

• It requires less resources than supplying goods

• Dependent on 3rd party providers.

• You can quickly launch a click-and-collect option using existing resources.

According to the International Council of Shopping Centers, more than 50% of adult shoppers use BOPIS, and 67% add more items to their carts.

Consumers like to click and collect because they don’t have to wait for items to arrive; You are not paying for shipping. It is very convenient for busy consumers.

Social purpose: The pandemic has reminded consumers how important small businesses are to their cities and lives. Many people say they are motivated to support locally owned businesses. But the aforementioned QuickBooks survey also shows that consumers care about more than just the products/services they buy. You want to know if ethical practices, sustainable materials and other considerations are taken into account. And that these companies have morals to match and will do business with these companies over other cheaper alternatives.

Social purpose is emphasized in the CompareCards report, which states, “Social purpose is no longer just a ‘nice to have’. Today it is important to have a social purpose. Millennials and Generation Z consider consumerism a “channel of change” and are activists when it comes to their purchasing behavior. At any given time, more than half of these generations are boycotting at least one company.

NRF agrees, today’s consumers expect businesses to stand for something and want to do business with companies that care about their employees, prioritize inclusion and are committed to being a better company.

To make sure your company attracts these buyers, ask yourself:

• What does my business mean?

• What kind of culture do I want to create?

• How am I making an impact beyond improving the bottom line?

Who is buying?

In the past few years, two generations have changed their shopping habits – baby boomers and Gen Xers.

At the time of the outbreak, the Washington Post reported that consumers over 65 were the fastest growing category of e-commerce consumers. That means your website should be attractive and accessible to large eyes and you should provide click and collect options.

From teenagers to their early 20s, Generation P contributed about $830 billion to the US economy. They are a financially cautious generation and are value-conscious. So you want to offer discounts and offers to attract these consumers.

What do consumers want?

Gen Z isn’t the only group of consumers looking for deals. According to Influence Central and AdTaxi’s “Data, Digital Trends and Reinvention” report, online shoppers want:

• Free Shipping (96%)

Free and easy return policy (93%)

• Loyalty Rewards (74%)

• Most (92%) expect some kind of discount, especially percentage off and free shipping promotions.

Overall, these reports are great for small business owners. That QuickBooks report indicates that nearly half of consumers are more likely to try new businesses now than they were before the pandemic, which means you need to make sure you reach out to these potential customers with your marketing efforts.

Remember to be patient; Today’s consumers are taking longer to make purchase decisions – what used to take days/weeks can now take months. Buyers care about durability, value, quality and timeliness.

Need help understanding these changing consumer behaviors? A SCORE counselor can help.

Dean Swanson is a volunteer certified SCORE consultant and former SCORE Chapter Chair, District Director and Regional Vice President of the Northwest Region.