In an economic downturn people stop buying certain things. The Covid-19 pandemic reduces discretionary spending and fair trade purchases are on that list. People who support fair trade may now not buy, or less, and their choice may differ, 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.
These buyers will seek lower-cost products and brand-substitutes. They will avoid or reduce treat buys, put off durable purchases unless an emergency forces them to replace something, and will eliminate discretionary spending.
Price marketing will not work as fair trade margins are already very low. It will also set the expectation that an ‘original’ price is not ‘fair’, creating a questionable situation for later. For this group of buyers, you promote the exceptional aspect of a purchase with a message of exclusivity and continue with awareness-advertising
Buyers in this category will look for their favourite product but at cheaper prices. They will also cut back on frequency and volume, focus on value for money and rather repair than replace. Their discretionary spending will be significantly less.
These buyers will need to hear that what they supported before is still worth supporting now. Market products as morale raisers and recognise these buyers’ support in reaching these positive outcomes. Where you have a range, these buyers may go for a smaller, cheaper version of a product. To prepare for their future purchases, include some improvements in a core product. As with the Slam on the Brakes buyer, continue awareness advertising
Keep awareness promotion up of your brand, cause or product. Emphasize why it is worth still supporting now and the limited opportunities to do so (stock quantity, sourcing difficulty, ‘old’ prices etc). Treat them as ‘special’ clients and if possible, include a personal approach
Buyers who live for today will continue to buy daily items and some treats as if nothing is happening. They will however postpone the purchase of big-ticket items and will not expand on their existing and justified choices of luxury items.
Emphasise the added value of fair trade with the message and multi-impact of a purchase. Relate these to current ‘trends’ to create a sense of ‘must have’. Continue awareness advertising across platforms to support such a justified purchase
During economic downturns like during Covid-19, review, reduce, remove
While the Covid-19 pandemic goes on you have 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 Covid-19
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 turns up again
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.
More marketing tips here
“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.”Me, March 2020