Adapting to Recession: How Tech-Based Market Research Can Help Entrepreneurs Stay Ahead Utilizing data-driven insights to identify opportunities and pivot strategies for business success
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Consumer priorities are quickly changing with the possibility of a recession. Businesses will find it difficult to get away with sub-optimal segmentation, placement, pricing or branding as people become more frugal with their money.
With rising uncertainty in both the business and consumer markets, market research is critical for brands to stay on top of shifting consumer preferences. However, marketers are expected to trim their research budgets while under increased pressure to obtain high-quality data and insights.
But here's the good news — companies can speed up their market research at a notably lower cost with the help of technology-driven market research.
Tech-driven market research leverages technologies like AI, ML and Big Data to assist you in overcoming the significant limitations of traditional market research, like the reliance on self-reported data, lack of optimization recommendations and long turnaround times.
Let's look at how market research techniques can be particularly useful during these uncertain times.
Related: The Impact of Technology on Market Research
Identify market trends
Spotting changes in customer preferences, shopping habits and spending patterns is essential for businesses to adapt and survive.
For instance, the fast fashion giant H&M realized the trend of sustainable clothing early on. Incentivizing customers with vouchers for recycling clothes, H&M collected nearly 19,000 tons of unwanted clothes and textiles in 2020 through their Garment Collecting program, garnering much love from their customers.
Like H&M, businesses can adjust their marketing strategies, develop new products and tailor their offerings to meet the evolving needs of their customers by keeping up with current trends. This is where tech-driven market research gives you an edge, effectively identifying changing consumer sentiments by capturing not just stated responses but also subconscious feelings that consumers have not explicitly conveyed.
Conduct competitive analysis
Competitive market research is especially critical during a recession, with many businesses struggling to survive and beat the fierce competition. By analyzing the competition, businesses can identify areas where they can improve, such as pricing, product features or customer service. They can also identify areas where they have an advantage and leverage it to gain market share.
Market research technology can help you delve deeper into understanding, for instance, why you might be losing customers to competitors. Even if you've lost the deal, following up with open-ended questions like what services attracted the customer to the competitor, did they have any issues with the pricing and such will help you find out why they made the switch.
Advanced research technologies help you quantify the emotions hidden in voice tonalities and facial expressions, enabling you to capture more profound insights. They can also help you accurately test the UX of your application and the competitors' with features like eye tracking.
You can also test your media (adverts) against the competitors; robust market research tech stacks can generate heatmaps and benchmarking scores, so you know how your marketing strategies fare against the industry standard.
Related: 4 Key Questions to Ask When Analyzing Competition
Test new products and services
While businesses need to be more cautious with their investments during an economic downturn, keeping branding, products and services relevant to the current dynamics can be worthwhile.
For instance, Procter & Gamble utilized market research to successfully introduce the Swiffer WetJet in 2001 [during the recession], creating a new product that made it easier to mop floors, weaning customers away from less expensive alternatives.
This is where the right market research technology can enable you to flawlessly conduct innovation testing, product concept testing and more before investing in a product or service development and launch. Businesses can avoid costly mistakes and make informed choices by gathering feedback from prospective customers ahead of time to evaluate the viability of their new offering.
Currently, Coca-Cola is riding the sustainability trend and is testing paper bottles for all its products. An important aspect of this testing is how it will impact customer experience. The company is focusing on consumer research to understand how customers will react to the paper bottle and to find sustainable packaging solutions that people can enjoy.
Such intensive research activities become easy to conduct with the help of market research platforms where surveys and focus group discussions can be conducted entirely online. Moreover, research tools also come equipped with massive online panels, enabling you to practically reach any corner of the world for your research activities.
Related: How Businesses Can Utilize Market Research to Create Reactive, Recession-proof Strategies for Survival
Optimize marketing spend
Market research technology can help businesses optimize their marketing efforts by identifying the most effective channels and messages. By analyzing customer data, businesses can determine which marketing campaigns deliver the best return on investment (ROI) and adjust their strategies accordingly.
Fortunately, there are several tech-driven market research tools available in the market today. An integrated research platform allows you to gather both quantitative and qualitative data in one platform, giving you a single view of all data. Since data visualization is easy, these tools enable quick decision-making as well.
Today, companies can move forward during a recession rather than being bogged down; implementing the right market research platform can be a game-changer in helping companies innovate and thrive even during uncertain times.
According to HBR, only 9% of companies flourished during the Great Recession. This small group of companies was research-oriented and had concerted plans for handling a recession and where they would invest. The result? They outperformed competitors by more than 10% in sales growth.
These companies understood the consumer sentiment that people didn't necessarily stop spending but were willing to spend elsewhere. However, it's impossible to come to this understanding without investing in research.
Without effective market research, you can only speculate about what your consumers want and, as a result, what might benefit your company in difficult times.