Rising inflation continues to be an issue in the United States, affecting everything from gas to food prices. As Americans adjust to higher prices, consumer behavior is reflecting a wariness to spend on items beyond necessities.
According to a recent CNN report, consumers bought 6% fewer items at general merchandise stores in the first quarter of 2022 than they did in the first quarter of 2021, and the frequency of shopping trips dropped 5% in the quarter. And in their first-quarter earnings reports both Walmart and Target noted that consumer behavior in their stores is changing as a result of inflation, with customers opting for lower-priced items, buying fewer items per trip, and avoiding spending on nonessentials such as televisions and furniture.
With consumer behavior trends suggesting a more cautious approach to spending, brands have to work harder to get the attention of new customers and maintain existing customers. Read on to learn about how brands can respond to this recent shift in consumer behavior.
Connect With Loyal Customers
While discretionary spending drops during inflationary periods, it does not disappear altogether. Customers who are particularly loyal to a brand may continue to choose it over lower-priced alternatives, but establishing this level of customer loyalty involves an active and attentive response to customer needs.
Social listening tools can be helpful in facilitating such a response. Using these tools, brands can understand the nuances of the consumer behavior of their most enthusiastic customers and recognize when customer service issues arise.
Using sentiment analysis, an AI-based technology, brands can gather and process large amounts of data from social media platforms such as Instagram, Facebook, and Twitter. Sentiment analysis assesses how positive or negative online brand-relevant mentions are. The technology can analyze images and text, even when a brand is not directly mentioned or tagged.
By better understanding the consumer behavior of those customers who tend to post positive content about a brand’s products, a company can direct marketing and product development strategies to maintain those positive attitudes. A company might pursue promotions and partnerships that overlap with the shared interests of its most enthusiastic customers, for example, partnering with musicians, TV shows and films, or sports leagues that its customers tend to enjoy.