As with many others in this ragged economy, retail and service businesses are hurting financially with ever decreasing profits, especially small mom and pop and sole proprietor enterprises. Consumers are struggling. The bad economy has caused them to pause and reconsider their 'buy it just because' consumer mentality. Their new outlook to purchasing goods and services is one of careful frugality. So how can you customize marketing and business strategies to become more aware of your customer's needs and adjust to meet the new consumer demand?
What Makes Up Consumer Demand?
Many of the concerns that consumers are facing in this trying economy are the same: job losses that reduce income, expenses that continue to increase, and less than perfect solutions that do not answer their immediate needs. Consumer demand includes three major components: Income level, price and personal preference. A business cannot do much about the customer's decreased income level. Reducing prices is an option; however, downward pricing can place the profitability of the business at risk and hurt the owner's income stream. The only way to influence consumer demand is by paying heed to the customer's choices and preferences.
Take a Cue from Internet Businesses
Big retailers, even discounters, who carry large inventories, are thinning out thinning out the consumer's choices by simply not carrying products that are not in demand and catering to the preferences of the masses. That does not mean that nobody wants the product or service, but that his or her choices of places to find it are limited. Internet businesses that cater to delivering that product or service refer to it as "long-tailing" or "niche" marketing. When a business owner hears enough customers complaining because they cannot find a particular product or service, that is an opportunity for your business to meet that consumer demand.
The Nature of Consumer Demand
Even though customers have less to spend or choose to be more frugal in their spending, they do not always gravitate towards the cheapest price. In fact, as consumers' choices and/or funds become more limited, value offered or even perceived becomes more important. They look to purchase products that last longer rather than one that will break, crash, or looked dated or worm a few months later. They would rather pay more for the one service they need rather than take a bundled package deal of services they do not use or want. As the jobless recovery continues, consumers are becoming more aware of the solutions they need to resolve their personal problems and they demand that they get their money's worth and that what they purchase stands the test of time. If your small business can meet these needs, you will create clients for life, long after the economy recovers.
For more information on "long tailing", see my article http://www.infobarrel.com/Does_Chasing_The_Long_Tail_Still_Work_for_Online_Retailers%3f