Posted by 360 Market Reach ● Jun 30, 2022 9:00:00 AM
Market research plays a pivotal role in a company’s decision-making, whether it’s about releasing a new product or making a key strategic decision.
Foundational market research is the practice of discovering fundamental information about the consumers who are connected to a specific category, what those consumers need and value, and how they perceive brands in the category.
This information can then be used to help a company’s leadership make vital decisions about representing the brand, promoting products, and more.
But one of the most common misunderstandings about foundational market research is that it’s one-and-done.
In truth, foundational market research should be done on a regular basis or, at the very least, after periods of major change.
With that in mind, here are five reasons that your company should pursue foundational market research now in 2022.
1. COVID Changed Shoppers’ Values
It’s common knowledge at this point that the COVID-19 pandemic has impacted nearly every single part of the world’s economy.
More specifically, it impacted consumers’ feelings of safety, overall optimism, and even their core values.
According to the CBPP, more than 40% of American households had a hard time keeping up with regular expenses during the peak of COVID’s impact.
This, in turn, had an impact on what American households could afford in terms of both necessities and disposal income. Hobbies had to fall by the wayside while finances were directed toward essential living conditions.
There was also somewhat of a change in what Americans considered “essential.” Americans adopted millions of dogs during the pandemic, filling their homes and lives with new furry friends who could play a much stronger emotional role in people’s lives, as opposed to a hobby.
In other words, your company’s primary demographic could have shifted in any number of dimensions. They could be operating with a smaller level of disposable income. They may have lost some of their former hobbies and potentially even exited your audience. They might even have additional responsibilities, compared to a few years ago.
While there are many more detailed analyses of COVID’s economic impact available in the world, this short synopsis encapsulates the main reason why companies should consider foundational market research at this time.
COVID truly changed everything.
2. Shopper Behavior Has Changed
Because shoppers’ values have changed, their shopping behaviors have followed suit.
Part of this was also because of the supply chain issues experienced during COVID, as any portion of the workforce could have been ill unexpectedly at any point.
However, the change in shopping behavior goes far beyond topics like logistics.
In 2020, 12,200 stores closed in the United States, setting a new and heartbreaking record for the loss of both small and large business across the country. Our own research shows that just 64% of consumers were comfortable with going to a grocery store in October 2020 and just 76% in October 2021.
In addition, non-essential purchases — like concerts — were far less popular. Only 8% of consumers felt comfortable attending a concert in October 2020 and 18% a year later.
In large scale, shoppers shifted their purchasing behaviors from in-person to ecommerce to avoid the potential of catching COVID, and this, in turn, led to a sharp increase in the number of deliveries and delivery services.
This opened up the delivery segment to greater opportunities and gains, as a small segment of the professional public began driving more often and making more stops than ever before.
According to Rensselaer Polytechnic Institute, grocery deliveries alone increased by more than 113% during the pandemic, and more than half of those new users planned to continue using grocery delivery services after COVID concludes.
In addition, research from Oberlo shows that US ecommerce sales sharply jumped from 2019 to 2020. Where sales only increased about 12% ($62.8 billion) from 2018 to 2019, they increased 42% ($241.8 billion) from 2019 to 2020.
Ecommerce sales continued to increase as well. 2021 saw an 18% increase ($148.5 billion) over 2020.
These examples underline a single key point that’s crucial to understand today: Consumer purchasing behavior has changed.
3. Your Target Consumer Is Living & Working Differently
In addition to driving new shopping habits, the past two years have seen a significant change in the way that employees live and work.
According to NCCI, roughly 6% of the professional workforce had worked from home prior to the pandemic.
In May 2020, 33% of the professional workforce was working from home. This number was closer to 75% for office workers who could do their jobs via Internet access.
This shift, which some began to call “living at work” because of how it changed their home lives, represents a dramatic reshuffling of the average worker’s day.
Gasoline, train fare, and other commuter-related financial needs fell away for many as they set up laptops and home offices — some for the first time ever.
This also meant that many office workers also mixed their work-from-home days with being parents. As schools also shut down during COVID, 72% of women said they were the primary caregiver for a child during the COVID shutdowns with 33% of men saying the same thing, according to SAGE Journals.
Altogether, this points to a new lifestyle of consumers throughout the country who mesh their personal and private lives on a regular basis, being parents, employees, leaders, and individuals all at the same time.
Perhaps it’s no wonder that stress is continuing to trend upward for US consumers, according to Psychology Today's ongoing “Stress in America” series.
And as a result, your target consumer may be feeling the pinch of finances, work, parenthood, and other responsibilities all at the same time.
4. Disposable Income Has Changed
Between 2010 and 2020, the unemployment rate in the United States steadily declined. Then, during the COVID shutdowns, it spiked to its highest point since January 1948.
This record level of unemployed individuals meant the loss of key incomes for many households. This is also coupled with record costs for rent, placing additional demand on households’ essential income and diminishing their abilities to make non-essential purchases.
With so many becoming unemployed, changing jobs, and facing increases in essential spending, it’s completely possible that your target audience may not be able to afford the same pleasures and luxuries that they did in years past.
How Do We Do Foundational Market Research Differently?
At times, the experience of working with a boutique company can feel substantially different like getting coffee from a local shop vs. a Starbucks. We know this because our own researchers have experienced it first-hand, having worked at some of the most well-known market research firms and now working at one of the most elite.
The biggest difference is 360 Market Reach offers market researchers more control over their individual studies so that they can truly craft a research project that is customized to a client’s need.
There are no cookie-cutter options, and there are no pre-defined boxes into which client needs are slotted.
Instead, our researchers truly immerse themselves in a company’s product offerings, values, competitors, and industry to get a full view of the context around a study’s needs.
This gives our researchers the enviable ability to create insights that go far above and beyond what may be expected. They’re able to consider the study itself, the client company’s position in the industry, and what all of that can mean for competition — among other ideas.
Altogether, these benefits make 360 Market Reach more flexible and agile.
Understand Your Customer Base with Foundational Market Research
The harsh truths of today’s economy include a multitude of changes and adjustments that many US consumers never saw coming.
Because of that, no company could’ve predicted the volatility of the past few years as well.
That’s why it’s so important for your company to get a firm understanding of your customer as soon as possible.
It’s also why we’re here to help.
We understand that foundational market research should help make your company more predictable. The past two years have been anything but.
Click the button below to get in touch with us to start talking about how we can get you the foundational market research you need to thrive in the new normal.
Topics: Market Research