Harnessing Past Data to Forecast Consumer Behavior in 2021
In a recent conversation, a client asked us a question that many planners and strategists are asking right now, “Did last year’s data have any value?”
It’s true that the last year was unprecedented. And it’s easy to assume that the data on consumers’ behavior, needs, and motivations are anomalies that don’t provide much value in predicting future actions.
However, the reality is more complicated—and promising. While target audiences are continuing to shift in reaction to the economy and the world around us, there are past indicators to help us understand how crisis and economic turmoil affect consumer behavior. These indicators can guide us in interpreting data from 2020, and ongoing in 2021, and how best to position our products and services in a recovering market.
Predict and Prepare with Data
Events from the past 25 years have illustrated a model for how consumers react to an unstable, recovering market. The “dot com” bubble burst of 1999 and the ensuing recovery, as well as the real estate collapse of 2008/2009 (Great Recession) and the following rebuild provide maps for shifting consumer behavior. Specifically, as employees go back to work, consumer sentiment begins to recover, which reignites the economic engine.
Two key elements to those rebounds were the impact of pent-up demand and resetting consumer expectations for brands. The worst mistake we can make is assuming that consumers will return to their previous behavior just because economic, political, or pandemic factors have changed. Brands must be positioned to address the renewed demand when consumers have fewer restrictions and more disposable income and reset expectations of what success looks like. As history shows, recovery doesn’t happen all at once.
So, did last year’s data have any value? Absolutely. With real-time data, better aggregation, and analytics, we can forecast and react faster than ever before. Combined with even the most basic omnichannel strategies and you’ve got the recipe for a successful 2021.
If you are having trouble navigating strategy and planning for 2021, drop us a line. We’d be happy to help you chart a path forward.