Widespread global geopolitical events and health crises have strained the global supply chain almost to a breaking point. The ongoing war in Ukraine and the COVID-19 pandemic have had a ripple effect around the world.
In addition to the tragic loss of life, these crises have caused factory shutdowns, material shortages, and border restrictions— and these concerns have only been exacerbated by ongoing transportation constraints. And signs point to these challenges persisting through the year, and likely into 2023 — disruptions may be the “new normal” for a while.
With all of this has come a clear reduction of inventory, and supply has struggled to keep up with demand across Canada, leaving brands scrambling to find ways to meet consumer expectations and address changing consumer behaviours.
But new insights on how Canadians are reacting to these ongoing disruptions can help marketers navigate these waters, engage consumers with digital tools, and maintain their loyalty.
The crisis today, and ongoing impact on consumers
The first half of 2022 has been difficult for brands and consumers alike, with continued lockdowns and global geopolitical crises. In Canada, border blockades and protests further disrupted and weakened an already fragile supply network.
None of this has slowed down the demand for certain products, and consumer demand is expected to grow with the population: Canada is aiming to welcome another 1.3 million immigrants in the next three years.1
Canada’s population may be growing fast, but according to Canadian Manufacturers & Exporters, 90% of our manufacturing firms are experiencing supply chain problems. As a result, 80% of firms say they’ve resorted to price hikes for consumers or they’ve been forced to delay orders. Half of surveyed firms don’t expect these problems to be resolved until 2023. This has led to $10.5 billion in lost sales, and $1 billion in additional costs for Canadian manufacturers since the pandemic began.2
The impact of the supply chain crisis has directly affected shoppers. According to a Brownwich+Smith survey, 48% of Canadians say they are more stressed than they were during the first lockdown because of the Omicron variant and inflation3 — the latter has reached a 31-year high.
The effect on Canadian consumers is two-fold: Not only are they more stressed, but they’re noticing the pinch on store shelves and increasingly making more budget-conscious purchase decisions. New research by Savanta commissioned by Google shows that 57% of Canadians are noticing higher prices as they shop, and 34% are aware of low stock levels.4
Marketers need to keep these reservations in mind to inform a new strategy and prepare a response to the concerns of budget-conscious Canadians.
Changing behaviour: 3 emerging customer personas and how to reach them
Brands have a unique opportunity to show up for their customers and help them navigate these times of uncertainty.
To help brands manage this shift in how people shop, new insights reveal three key emerging buying behaviours among Canadians today:
- The Loyalists: Consumers who say they are willing to wait until their preferred product is back in stock;
- The Familiarity Seekers: Consumers who say they want to stick with their preferred brand and will explore available options from that brand; and
- The Switchers: Consumers who say they’re willing to switch brands and buy what’s in stock.
Let’s dive into the data and insights discovered about each cohort and what marketers can do to connect with them.
Seventy-one percent of these consumers say they’re willing to wait more than two months for a product to come back into stock rather than switch to another brand.5 In order to entice the other 29% to stay, there are a few tactics that have encouraged Loyalists to wait for their preferred brand or product:
- a bundled offering when stock is replenished (43% agree)
- loyalty products (31% agree)
- communications on availability or status of a brand’s stock (29% agree)6
Communication is a huge motivator for Loyalists. They prefer to be engaged frequently and transparently on expected wait times and availability of the product(s) they want.
Marketers hoping to reach Loyalists should focus their customer communications on the quality of their products, strong reviews, warranties, deals, promotions, and rewards programs. Loyalists will respond well to Customer Match, which helps brands build deeper relationships with existing customers and reach them with tailored messages and special offers, and reactivate less-engaged customers.
The Familiarity Seekers:
These consumers are willing to explore other options within an existing brand that they prefer. Thirty-six per cent of Familiarity Seekers say that information on the status of a brand’s stock would help them navigate their existing options.7
Familiarity Seekers want their options presented to them clearly and easily. Brands with larger portfolios should showcase their available options to Familiarity Seekers, and focus on selling what they have. Use the full power of your Merchant Center feed to keep these shoppers around, and to help facilitate the process of finding your other available product options for them.
For other industries like automotive, which has been hit particularly hard by supply chain shortages, try using the inventory feed in Google Ads to direct customers to what you currently have available. This solution will direct interested buyers to specific regions and your available models, effectively opening up your existing inventory to the digital consumer.
Marketers know that it can be much more costly to acquire new customers than to retain existing ones. So it’s crucial for brands as they navigate supply chain disruptions to focus on the Switchers, those customers who are less patient and readily willing to shop somewhere else.
In fact, about half of Switchers say they’ll choose a brand that offers greater value if they purchase their product.8 Reaching and retaining these consumers may come down to incentives. Forty-one per cent of Switchers say that bundled offerings, when a product comes back in stock, would encourage them to stay with a brand. And 34% say loyalty points would help too.
Reinforcing your brand, especially its quality and overall customer satisfaction results, can further encourage these Switchers to stay with you during supply disruption.
What about customers who don’t easily fit these three personas? You can still capture these shoppers by using search automation tools such as broad match to match keywords and phrases in a highly customizable way, and Smart Bidding to help you adjust to changing search behaviours.
Branding in times of uncertainty
Continuing to build your brand throughout the crisis is important to retain interest and avoid customer churn, and it’s key for every persona. In fact, brand advertising is arguably even more important during a crisis.
According to research by Millward Brown (now Kantar) during the 2008 recession, 60% of U.S. brands that went dark during the recession declined on at least one key brand metric, and customer relationships suffered as a result.9
So what does this mean for brands dealing with the supply disruption now? Pivot to building direct connections with your customers and providing helpful communications that keep them informed. Focus your messaging on what you do have, and be transparent on what you do not.
By understanding the emerging behaviours of Canadian consumers in the wake of the global supply chain crisis, brands can turn a seriously challenging time into a win. When brands can adapt to meet their customers’ needs by optimizing inventory, communicating clearly, and providing layered options for them, it not only fosters loyalty but also signals that they are more prepared for the future.