digital marketing to attract the changing customer

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Digital Marketing to Attract the Changing Customer1

A Playbook about the impact, digital shift and a plan forward

Digital Marketing to Attractthe Changing Customer



1. INTRODUCTIONThe Playbook for the New DIGITAL WorldKey Takeaways

2. TAKING STOCKImpact on SMBs - a Snapshot Hope on the Horizon

3. THE NEW NORMALThe Changing CustomerThe Biggest Shift - DIGITALMarketing in a Rapidly Changing New Normal

4. LOOKING FORWARDKey Takeaways and Calls-to-Action for Small Businesses

5. About PDSThe SMB Thought Leader

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The Playbook for the New DIGITAL World

Key Takeaways

Intr

oduc

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Section 1



2020 has brought out the worst, and the best, in humanity. The loss of life, income, and spirit has shattered us in ways we never expected.

With this constantly changing landscape comes turmoil for small and medium-sized businesses (SMBs) in particular. We’ve also seen a changing customer emerge: one who researches products with a new approach, bases their purchasing decisions on new factors such as safety and convenience, and looks to brands who relate to them in new ways. In order to pivot their business strategy to keep up, businesses must meet the customer where they are—online.

This playbook gathers research insights from thought leaders, offers recommendations for business continuity, and shares takeaways to help small businesses transition to the new normal.

Welcome to the Playbook for the New DIGITAL World

We hope this playbook reduces situational complexity and helps shine a light on the new digital landscape.



THE CUSTOMER IS CHANGING Understand their needs and show them empathy

Accelerated digitization of products and services has changed the way customers consume content, interact with brands, and make purchasing decisions. Shift your digital communication and practice empathy with your customers to make your brand feel more relatable.

Key Takeaways

TIME TO GO DIGITAL FIRST Focus on user experience to build loyalty

Americans are shifting from in-store to online. 2020 has seen online sales reach a level previously projected for 2022, nearly $800 billion reports eMarketer.1 As digital transformation and customer experience go hand in hand, customers in the new normal will base their loyalty on their experience online.

DATA AND TECHNOLOGY Rely on them to reach the new customer

A campaign without data analytics is like a ship without a compass. Good data analytics is key to creating personalized campaigns. It allows you to understand your customers’ habits, wishes, and patterns. Let data be your guide in 2021 to help you unlock customer insights and improve ROI.

1. https://www.emarketer.com/content/us-ecommerce-growth-jumps-more-than-30-accelerating-online-shopping-shift-by-nearly-2-years



Impact on SMBs - a Snapshot

Hope on the Horizon

TAKI

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Section 2



As the U.S. economy continues to navigate the pandemic, consumption rates continue to decrease. McKinsey2 reports a projected 12% decrease in private consumption across the country for 2021-2022. We will not achieve pre-pandemic consumption rates until 2023-2024.

163,735 total U.S. businesses on Yelp have closed since March 1st, with 100,000 of them closed permanently.3

According to the National Restaurant Association,4 100,000 U.S. restaurants have closed long-term or permanently since March 2020.

The foodservice industry has lost $165 billion in revenue from March-July and is projected to lose a total $240 billion in 2020.

Around 74% of small business owners have accrued debt from pandemic-induced financial struggle.5

A Snapshot of the Impact of COVID-19 on SMBs

Created by Flatartfrom the Noun Project

Created by Olena Panasovskafrom the Noun Project

2. https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/meet-the-next-normal-consumer 3. https://www.yelpeconomicaverage.com/business-closures-update-sep-2020.html 4. https://www.restaurant.org/news/pressroom/press-releases/100000-restaurants-closed-six-months-into-pandemic 5. https://www.cpapracticeadvisor.com/small-business/news/21158809/74-of-smb-owners-took-on-debt-to-offset-covid19-losses



Throughout the year, thousands of businesses have shut down. But at the same time, new entrepreneurs are emerging across the country. 2020 saw the highest growth rate in new business applications in the last 14 years.6

The U.S. Census Bureau7 reports that over 3.2 million employer identification numbers for enterprenuers were issued, an increase of nearly 20%. In Q3 2020, business applicatoins increase by over 77% compared to Q2.

As per the Yelp8 report:

However, it isn’t all doom and gloom. There’s hope on the horizon.

Professional services and sole proprietors such as law firms, residential real estate and accounting companies have experienced a low closure rate since March 1st. Only 2-3 out of every 1000 businesses closed down due to COVID-19, as of August 31st.

Health-related businesses have also seen a low closure rate. Orthopedics, internal and family medicine practices, OB/GYNs, and hospitals have experienced fewer than 3 closures out of every 1000 businesses.

Due to lockdown, home, professional, and auto services have seen more success than food and retail services.

6. https://www.wsj.com/articles/is-it-insane-to-start-a-business-during-coronavirus-millions-of-americans-dont-think-so- 11601092841?mod=business_major_pos5

7. https://www.census.gov/econ/bfs/index.html 8. https://www.yelpeconomicaverage.com/business-closures-update-sep-2020.html



• U.S. e-commerce sales in Q2 2020 rose by 44.5% year-over-year

• E-commerce sales make up 16% of all U.S. retail sales

• Digital credit and debit card purchases have grown about 88%every month from April to October

Online services such as language learning tools, educational applications, and video conferencing softwares have skyrocketed during the pandemic. Even pre-pandemic, virtual learning tools were already booming—with the global market passing $18.66 billion in 2019 and a projected $350 billion by 2025.11

Recessions have always been catalysts for growth

Uncertainty is a catalyst. Every pandemic in history has been marked by the resilience to evolve and adapt to the changing environment. History is proof that recessions and unstable periods present great opportunities to start new companies. During the 2008 financial crisis, billion-dollar startups such as Uber, Airbnb, and many others were founded partly as a response to changing market dynamics.9

COVID-19 may be forcing some businesses to close down, but the Wall Street Journal10 reported:

With e-commerce at the center of thriving sectors during COVID-19, retailers’ reliance on fulfilment centers and warehouses has increased drastically. eMarketer’s12 digital buyer forecast projects over 204 million consumers aged 14 and older will make an online purchase during the pandemic.

E-commerce Industrial Real-Estate

E-learning

VideoConferencing

Augumented RealityRobotics

Online Groceries

Freezers & Coolers

SECtORS thRIVInG In pAndEmIC

9. https://www.entrepreneur.com/article/357003 10. https://www.wsj.com/articles/is-this-the-year-you-finally-stop-swiping-your-credit-card-11597397428 11. https://www.weforum.org/agenda/2020/04/coronavirus-education-global-covid19-online-digital-learning/ 12. https://www.emarketer.com/content/expect-7-4-million-new-digital-buyers-2020-pandemic-alters-behaviors



The Changing Customer

The Biggest Shift - DIGITAL

Marketing in a Rapidly Changing New Normal

The n

ew n

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The pandemic has completely shifted the customer psyche. Understanding the thinking process of your target customer is key to bouncing back quicker as a business.

• the pandemic is dictating customer behavior - Factors such as limited travel, work- and learn-from-home measures, and growing health consciousness during an era of sickness are contributing to these changes.

• Uncertainty will continue shaping the landscape - New customer purchasing behaviors have emerged each month in 2020, and whether or not they continue into 2021 will depend on satisfaction, demographics, infrastructure, and recession impact, explains McKinsey.13

• Businesses should reevaluate how they engage with their customers - Because of changing spending habits, landscape of products and services, and browsing preferences companies need to pivot their marketing strategies accordingly.

The Changing Customer

Work Learning Communication& Information

Travel &Mobility

Shopping and Consumption

Life at Home

Preference for digital entertainment

Focus on health and hygiene

Work from home

Learning from home

Rise in media consumption

Decreased travel spending

Surge in e-commerce

Nesting at home

Play &Entertainment

Health & Well-Being

13. https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/meet-the-next-normal-consumer



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A Whole new Landscape of Changing Customer preferences

Research

ReceiveFeedback

happy CustomerBrowse

Buy



Customer Experience and Shifting Behavior

We must ask ourselves if the shifting customer behavior in researching, browsing, purchasing, and receiving products and services will become long-term. The customer experience is central, and today’s SMBs must invest heavily in improving satisfaction, or they risk losing loyal customers to their competition.

Whether it’s a slow webpage, a disorganized food pick-up order, or unrelatable marketing material, one bad incident can ruin the customer experience with a brand. Competition is high, time and money are tight, and more players are entering the business landscape, so any misstep is costly. With dynamic trends and habits with products and services, we must realize that what we prefer or need today may be different tomorrow.

• For many people, seeing their doctor face-to-face is irreplaceable. McKinsey14 reports that although theuse of virtual physicians and pharmacy visits has grown two to three times, only 40-60% would like tocontinue online visits post-pandemic.

• Despite the fact that so many people have transitioned to work-from-home, only 28% of Americanssurveyed in September by the IBM Institute for Business Value15 prefer to continue working from homeexclusively. This will impact markets such as home improvement, entertainment, delivery, and more.

• We can expect large long-term cuts in discretionary consumer spending and a significant amountof trading down, says McKinsey.16 E-commerce acceleration is expected to largely stick due to a well-developed delivery infrastructure.

• To retain and strengthen customer relationships post-pandemic, it is crucial to use data to analyze yourcustomers’ current preferences and long-term desires for your products and services, understand yourshortcomings, and adjust accordingly.

14. https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/meet-the-next-normal-consumer 15. https://www.ibm.com/thought-leadership/institute-business-value/report/covid-19-consumer-survey 16. https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/meet-the-next-normal-consumer



how customers get information:

Customers are increasingly dependent on digital channels for information and entertainment. Fueled by stay-at-home orders, the adoption of digital formats has skyrocketed. Both individuals and brands need to diversify their products or services and find innovative ways to stay connected with their customer base.

how customers purchase:

Getting customers to purchase now requires an omnichannel approach. Once the customer is ready to make a decision on what to buy, they expect great user-experience and convenience brought to their doorstep. Building trust through thoughtful and relevant shopping experiences is critical to build brand loyatly.

Where consumers purchase:

As health and hygiene have moved to the top of the priority pyramid, stores need to rethink layouts and opening hours to make shopping safe and quick. They should optimize for a new shopper who shops less frequently and consumes less overall—but buys more per shopping trip.

how consumers experience:

As customer preferences change, companies with a strong feedback loop will stay ahead. Customer feedback and product reviews can trigger “word-of-mouth” marketing and grow your user base. Taking a digital-first approach, brands should prioritize the customer journey to deliver an unforgettable buying experience.

Rethink how You Engage With Your Customers

As you look at the changing customer journey, focus on these key points of engagement with your customers:

DRIVE THRU



According to mcKinsey,17 the BIGGESt ShIFt is in dIGItAL

dIGItAL has grown and continues to GROW. The e-commerce surge has compressed several years of growth into a few months:

• Growing media consumption: 43% of Americans watch more television, 40% use moresocial media, 39% read more news online, and 28% listen to more radio.

• Remote learning services grew by 120%: Zoom’s daily user base grew from ten millionto 200 million from December 2019 to March 2020.

• Accelerating digital platforms with e-pharmacy and e-medicine: Of those who havebeen unable to make their medical appointments during the pandemic, 44% haveaccessed e-appointments.

• digital entertainment services are booming: Gaming app downloads have increasedby over 30% year-over-year. 45% of consumers report using more online streamingservices now than they did before pandemic.

The biggest shift - DIGITAL




COVId-19 has accelerated the adoption of digital platforms

Global

20%

20%

36%

58%

May2018

Adoption Acceleration 3 years

Dec2019

July2020

25%

25%

41%

65%

18%

19%

32%

55%

22%

19%

32%

53%

June2017

Asia-Pacific

May2018


Dec2019

July2020

June2017

Europe

May2018


Dec2019

July2020

June2017

North America

May2018

Adoption Acceleration 3 yearsDec

2019

July2020

June2017

Globally, customer interactions have grown from in-person to online.


Source: McKinsey18

During COVID-19

Pre-COVID-19



COVId-19 has accelerated the digitalization of products and services

Global

29%

28%

35%

55%

May2018

A 7-yr acceleration

Dec2019

July2020

33%

34%

41%

60%

26%

25%

34%

50%

31%

26%

33%

54%

June2017

Asia-PacificMay2018

A 10-yr acceleration

Dec2019

July2020

June2017

EuropeMay2018

A 7-yr acceleration

Dec2019

July2020

June2017

North America

May2018

A 6-yr acceleration

Dec2019

July2020

June2017

Source: McKinsey19

During the pandemic, companies around the world are experiencing a 5-10 year growth in digital product and service development.


During COVID-19

Pre-COVID-19



Across sectors, the rate at which companies have shown a digital shift has differed during the pandemic

The consumer-packaged goods sector, automotive industry, and large equipment manufacturers report relatively low levels of change in their digital product portfolios.But many entertainment and event planning companies, from an industry that got wiped out at the start of the pandemic, have transitioned successfully to offering virtual webinars and conferences.

Given the time frames for making manufacturing changes, many companies producing physical products have found it hard to pivot their strategy. Uber, however, moved from a ride hailing model to a grocery delivery model, recognizing the immediate need and filling the gap.20

There is a significant increase in the adoption of digital products in healthcare, pharma, financial services, and fitness. A Canadian fitness studio owner pivoted online to “Fitness with PJ”21 and now earns similar revenues with reduced operational costs.22

20. https://www.indigo9digital.com/blog/retailerspivoting21. https://www.fitnesswithpj.com/ 22. https://www.cbc.ca/news/business/small-biz-lessons-1.5784010



Some business sectors have pivoted fast to adopt virtual business reality

Retailers who prioritized visitors to physical stores and face-to-face engagement as opposed to digitization have struggled to respond to changing customer needs. Businesses that adopted digital tools and offered hybrid delivery models to their customers have continued to be in demand.

While the present circumstances force companies to make critical changes in their business models, those who laid out strategies, digital or otherwise, far in advance of the pandemic are on more solid footing, says Forbes.24

Wineries used to invest a lot in physical wine tasting experiences. But with changing dynamics and loss of walk-in customers, many have dived into online programs and digital experiences to keep their brand connected and revenue coming in.23

Food catering companies and restaurants saw their businesses dry up overnight. A large number didn't survive, but those who jumped into digital transformation with fast ordering, reliable delivery, and flexible menus managed to keep their doors open.

23. https://www.liquor.com/wineries-innovate-during-crisis-5069716 24. http://28.https//www.forbes.com/sites/sethcohen/2020/05/19/the-one-reason-walmart-has-a- winning-strategy-against-the-coronavirus/?sh=176f9d9b6ef8



Businesses are pivoting from in-person to on-screen mediums across the globe. they are reimagining how to:

Replace face-to-face interaction with individual online appointments

Share experiential content with their customers

Activate and nurture a digital community

Strengthen their customer support service to serve the user faster



how can companies adapt their marketing to the new normal?

Previous recessions show that decreasing marketing expenditures doesn't help businesses. In fact, increasing your budget can bring in new revenue in the long run. As the Harvard Business Review25 explains, it can be natural to want to cut spending during challenging economic times, but in an increasingly digital world, this can hinder your ROI.

For example, after the 2008 financial crash, consumer goods company Reckitt Benckiser actually increased its marketing expenditure by 25% to maintain and grow a loyal consumer base. In return, their revenue grew by 8% and their profit grew by 14%.

Cutting your marketing budget may seem logical in the short-term. But a little bit of savings now may cost you a lot more when you need to rebuild marketing momentum during recovery.26

Marketing in a Rapidly Changing New Normal

25. https://hbr.org/2020/07/the-pandemic-is-rewriting-the-rules-of-retail 26. https://hbr.org/2020/08/dont-cut-your-marketing-budget-in-a-recession



• In today's hyper-digital age, it's the only way to reach your customer.

• The engagement will help you understand more about them as they make adjustments to their behavior and spending habits.

• It will help you set up your business for success in the long-term.

• You can maintain your Share Of Voice (SOV) among competitors.27

Why should you continue to communicate with customers and strengthen your digital marketing during these times?

Advantages of an increased marketing budget during the pandemic

Greater SOV and market share

by growing your customer engagement

Retention of your core customer base

by becoming the first brand that comes to

their mind

Once a prospect, tomorrow a customer as you develop a new pipeline of prospects

Better brand recall and a positive

online reputation by being there for your

customers

27. https://www.searchenginejournal.com/share-of-voice/359752/#close



look

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Section 4

Key takeaways and calls-to-action for small businesses



Build confidence and trust in the new customer

• Re-align your online presenceto adapt to the changingcustomer’s needs. Increaseyour focus on customer serviceby offering delivery options foryour product or service rightto their doorstep.

• Focus on customer experience.Brands that make theircustomers’ lives easy attract themost loyal users and word-of-mouth spreaders.

Work on your brand's voice to win loyalty

• Keep it genuine, empathetic,and relevant.

• The mission statement andgoals for a company changeover time. Brands shouldrefresh their positioningto communicate theirvalue-add.

• Relate to and empathizewith the present-daycustomer.

• Communicate your voiceconsistently within andoutside of your company.

Integrate channels for an omnichannel approach

• Invest in technology. Theright automation softwaresand processes can replicatethe strength of a largemarketing team.

• Create dynamic andpersonalized content tobuild brand trust. Withthe power of segmentationand targeting, you candeliver the right messageto your audience and wintheir brand loyalty.

Use data effectively to run campaigns

• Collect data to understand your online customer and apply it to every aspect of your marketing. Builda powerful foundation by gathering insights and reinvent your strategy.

• Understand and apply analytical tools to gain critical insights about your customers’ behaviors and habits.

Key takeaways and calls-to-action for small businesses



About pdS

Pure Design Solution is a Dallas-based WBENC-certified digital marketing agency. We are problem-solvers with years of experience in identifying the weak links in our clients’ online ecosystem and adding value through technology-driven campaigns that seamlessly merge marketing and sales.

Strategy. Design. Marketing. We love to extend this synergy to our clients to trigger their growth, solve problems, and expand horizons. Clients across the globe have turned to PDS for our innovative solutions that push boundaries and help them build long-term, sustainable value in their brand.

What We do Best

Strategy & planningA digital marketing plan that identifies your unique value, audience interest and behaviors, and defines a road-map through a variety of digital channels.

technology EnablementThe best Martech-based solutions that create healthy ecosystems for sales and marketing to coexist side-by-side and supplement one another.

Communication & design An impactful message and a design language that builds your brand’s voice and establishes trust with your audience.

digital CampaignsCampaigns that aren’t meant to just fill space, but instead drive leads through your sales funnel, to enable growth.

Your business’ growth shouldn’t be cyclical, it should be ongoing. Share your vision with usand experience a smooth journey of digital transformation with measurable results.

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[email protected]

www.puredesignsolution.com

digital marketing to attract the changing customer

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