In an economic downturn people stop buying certain things. Like during the COVID-19 pandemic when discretionary spending went down. People who support fair trade may not buy or buy less at such a time, but clear value for money will remain important.
Customers will look for value in different ways during financial stress. They will buy home brands for daily shopping and hold off on replacing bigger items to get more value out of them. They however also want to treat themselves and the right message may persuade them to buy. Maybe not immediately, but definitely in the future when the Corona virus impact abides.
Knowing your buyers and how to target them is essential
There are four types of buyers, each with their own likely buying response during an economic downturn. I sourced these from a 2009 article in the Harvard Business Review, but these categories are still very relevant.
During economic downturns, review, reduce, remove
An economic downturn presents the opportunity to review and clean up your product lines, reduce complexity and remove trivial differences. Maybe your product range does not need 5 sizes, 3 may do. Think of how you can add some minor innovations and tweaks to your product or service. Repackage, highlight quality aspects or reduce complexity in the purchasing process.
Some may think about introducing a ‘fighter brand or product’, but I do not support this unless it is clearly differentiated. A dress that looks the same for example but differs in price because one is made from organic cotton and the other not, confuses the customer. A completely different dress however will make it clear. It is also important the product fits into your brand. It is difficult to market a product with no connection to your overall message.
The down-side of fighter product sales is that it may impact sales of higher priced items. The key is to only include this product in your range when it is necessary for it to achieve the impact it is created for.
Bolster trust during economic downturns
Reassure customers by conveying the sense that ‘we are going through this together’. Create messages that resonate with the four buyer categories. Educate on how to shop smart, how even a small purchase makes a difference in their own lives and also share how their buy supports your reason for doing what you do. Confirm that the purchase of your product is a sound decision.
Be ready for when the economy improves
It will take a while before spending patterns will be ‘normal’ after an economic downturn. For fair traders, the main trading time is in the second half of the year so prepare for that by keeping up your communication and reviewing your products. And remember, stock not sold yet can still sell.
“I trust that fair trade buyers will not disappear so I will keep up my communication to make sure that I remain in their minds.”
Carina – March 2020