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For brands and retailers looking to capture the opportunities in our market today, while also building resilience for the future, it will be essential that they test their understanding of consumers, and reassess their strategy and tactics to ensure they are fit for purpose in the current environment.
After all, we are well aware of the profound effects the COVID-19 pandemic has had on e-commerce, including customers, merchants, and marketers. Online sales increased rapidly, and even then, e-commerce has played a bigger role in brand marketing tactics. Keeping these trends in mind, here are my tips for brands and retailers looking to capitalize on the opportunities ahead:
1. Adapt your approach for regions and markets In the current global economic landscape, it will be crucial to comprehend consumer behavior in various areas in order to seize growth opportunities. For instance, since emerging markets are expected to grow their gross domestic product (GDP) faster than developed markets, firms may want to consider entering new ones, or changing their marketing budgets to concentrate more on the developing areas they serve.
2. Know your consumer (and how they are changing) This is especially important, as consumer behavior changes rapidly in the face of economic uncertainty. Surprisingly, premium product features are still driving growth among affluent consumers- understanding why they are stimulating demand could unlock growth. Meanwhile, it is essential to understand the categories that cost-conscious consumers will still spend their money on, even though costs are rising. Another interesting consumer behavior to monitor is “revenge shopping,” where consumers have been known to splurge after a period of restraint to make up for lost time. Brands and retailers will need to be ready to capitalize as soon as consumer confidence rallies.
3. Embrace the consumer demand for sustainability Sustainability remains a growing priority for both cost-conscious and affluent consumers of all ages. Preserving the environment was the fastest growing value for global consumers between 2016 and 2021, and by 2030, half the world’s population will be “eco-actives,” i.e. people who invest energy and money in buying sustainably. Consumers are shopping for purpose as well as products, so spotlighting sustainability in product descriptions and advertising could help products stand out. One major opportunity is to address a lack of awareness about environmentally responsible brands, and reassure consumers wary of “greenwashing,” or inflated sustainability claims. 71% of consumers say it is important that companies take environmentally friendly actions, but only 19% can name a fast-moving consumer goods (FMCG) brand that is eco-friendly, and just 25% of them trust company claims about environmental practices.
At the end of the day, as we look ahead to 2023, retailers will need to offer carefully curated deals that consumers believe are authentic and resonate with them. In terms of trends, sustainability could be a trump card for retailers this year. Finally, harnessing data, insights, and cross-functional expertise will be more important than ever, as the picture will change from month to month- and even week to week.