Customer behaviors are changing—so where should you place your bets?

But when it comes to customer behaviors, the changes that will stick—and those that won’t—remain a mystery. 

Why are buyers so hard to figure out right now? Three reasons include: 

1. Enabled by digital solutions, customers have cultivated new habits 

In 2020, people who had never ordered food through an app, or had groceries delivered to their door, found themselves venturing into new territory. The reasons varied: necessity, concerns about health and safety, even boredom. But many of the strategies companies adopted to accommodate a new reality—such as “buy online, pick up in store” and contactless payments—also make life more convenient for buyers. That’s turned pandemic-induced behaviors into ingrained habits for many consumers, particularly younger ones. Morning Consult research found 25% of millennials now do all or most of their grocery shopping digitally—up from 14% pre-pandemic. 

2. Brand loyalty is no longer a sure thing 

Customers are becoming more adventurous, and it's making their loyalty—and their wallet share—harder to capture. Their new willingness to experiment is, in part, a response to a constantly shifting “normal”—from where and how their kids attend school to what’s available on store shelves each week. A study from retail software company Bazaarvoice found more than half (51%) of U.S. consumers bought products from a new or unfamiliar brand last year—in some cases, because ongoing product and raw material shortages or supply chain disruptions forced them to. About 45% of American shoppers say they’ve altered their brand preferences in the past year. Organizations can no longer assume longtime customers will stay with them—their lives are changing, too. 

3. Historical data is no match for the speed of change 

Organizations that use trend-based modeling based on historical data have struggled to forecast demand since the beginning of the pandemic. The problem? Models that look to the past can’t inform the future—or even the present—during times of disruption. In West Monroe’s Q3 2021 executive poll, 84% of executives said they struggled to gain insights from data that would help them understand new consumer preferences. And 79% cited the pace of change/volatility as their biggest barrier. Buyer behaviors are simply changing too fast to keep up.  

So when uncertainty becomes the status quo, where should an organization place its bets? Our take: Transforming your operating model from traditional to digital will help you meet your customers’ needs—even as they change.

How? By using data to stay one step ahead, adding value through digital capabilities, and designing an integrated customer experience. Here’s what we mean.

Use data to sense and respond

Customer data is only as good as an organization’s ability to react to it. And segmenting customers based on demographics alone, or assuming every customer’s journey is the same, no longer cuts it.  

To gain actionable insights, you need real-time data on their individual behaviors—making their every purchase, preference, and interaction part of a continuously updated single source of truth. This allows an organization to algorithmically offer targeted recommendations and interact with buyers in the ways they prefer.  

Yet only looking inward—at your own data—doesn’t paint the complete picture.  

The pandemic forced companies to see the importance of external data for predicting customer behavior, and experts from the MIT Sloan School of Management say this should be a lasting change. External data on competitors, markets, and buyers who aren’t your customers can reveal an opportunity to launch new products or services, or uncover an untapped customer base. And external forces—extreme weather events, supply chain breakdowns—affect supply and demand.  

But how do you marry internal and external data—and then use both to stay ahead of what your customers want and need? That’s where advanced machine learning models and predictive data analytics tools come in. They can provide recommendations on what product, marketing, and sales strategies to focus on—and constantly adjust their predictions and calculations in real time. 

As an example, let’s consider an equipment parts supplier whose key customers are cities and municipalities. Municipal fleets in any region with snowy winters include snowplows and ice control trucks—which have to be ready to hit the streets as soon as snow flies, to keep roads clean and constituents happy. That means fleet managers need to get replacement parts—fast—if a vehicle breaks down.  

Ahead of the winter season, static data can hint at how to stock the right products in the right warehouses: external sources (meteorologists’ predictions for the winter ahead; average amount of snowfall in key geographies) and internal data (where customers are in relation to warehouses; the parts they’ve ordered in the past; their fleet vehicles’ specifications).  

But the weather is tough to predict more than a few days out. A sudden warm front can create blizzard conditions in a region that usually doesn’t get much snow. As circumstances change, analytics and machine learning platforms add this new data to models, delivering updated insights in real time. The result? Before the storm hits, a supplier can shift focus, proactively stocking warehouses in that region with the parts those customers might need. 

That’s just one example of how predictive data analytics and advanced machine learning can help answer the tough questions about supply and demand. These tools can deliver the insights that organizations need to be agile, refining strategies and making quicker, more informed decisions—even as conditions and customers change. Bonus: Using data to anticipate customers’ needs keeps them coming back—turning casual buyers into brand loyalists. 

Channel digital capabilities to add value to your offerings 

It wasn’t so long ago that digital was treated like a second-class citizen. Telehealth visits, virtual team meetings, video interviews with a job candidate—they were all seen as less productive, personal, or authentic than in-person interactions. 

No more. Digital has become more than just a contender. Thanks to the rate of digital adoption among consumers, it’s now an expectation—for every organization. 

The takeaway? You aren’t competing only with your industry peers anymore. Now, you’re being measured against every other company that has adapted to new digital models. 

It takes new capabilities, technologies, skills, and operating processes to be a digital business, sure. In fact, it requires a whole mindset shift. But one thing you never want to lose sight of? The customer and their needs. That means you should be leveraging your digital chops to deliver more value to what you’re offering your customers.  

What might that look like? If you’re in the logistics business, you know your customers’ businesses revolve around their shipments. You’re already helping them ship and receive their products and materials. To add value, you could implement a customer-facing dashboard that pulls data from your own shipping and distribution management systems—helping them manage and track their own orders in real time for extra peace of mind.  

Or, if you’re a manufacturer of construction equipment, you know time is of the essence on any jobsite. You could build a digital platform linked to sensors and computers in your wheel loaders or excavators. Customers get alerts when a machine is due for maintenance—so they can take care of it proactively, before breakdowns impact project schedules and cost them big.  

Bottom line? Start with the customer first, and work backward to the tech, to use your digital capabilities to add real value for your customers.  

Make the customer experience seamlessly integrated—no matter the channel 

Just because customers like digital experiences doesn’t mean they want to give up physical ones. In fact, it could be argued the pandemic made people value the option of in-person experiences more—with “option” being the operative word. That is, customers now desire a buying experience that allows them to choose their own adventure—so organizations need an ecosystem that connects digital and physical channels and worlds fluidly and seamlessly.  

Think of all the different ways a patient can interact with a healthcare provider. They might fill out some digital forms ahead of an in-person doctor’s visit to minimize time on site. They might sometimes call an office or a healthcare system to schedule appointments with the human on the other end of the line. Other times, they book online or via an app. 

With no single point of entry or engagement, it becomes all too easy for this patient’s experience to become jarring, frustrating, and unproductive. No one wants to repeat, retype, or rewrite the same information over and over, or—worse—worry their personal data is getting lost as they move between physical and digital channels.  

So how do you build an integrated experience? First, don’t think of “online” and “offline” as distinct experiences. Each can—and should—deliver equal value to the customer. That means combining the “hallmarks of the physical experience—discovery, inspiration, and service—with the ease, convenience, and personalization made possible through digital,” according to Target CEO Brian Cornell. 

Target began creating its omnichannel experience in 2013, starting with the custom build of a single enterprise-grade software platform that supported all of its commerce channels. Over the years, the store has continued refining its omnichannel experience to stay current—and we’re not just talking about curbside pickup.  

Now, a busy parent who needs a birthday party gift in a pinch can see what’s in stock at nearby Target stores. They can go to the right location first, versus running from one location to another to find it. And there’s no guessing what shelf it’s on—when they arrive at the store, the app leads the customer to the right aisle, saving them time. Conversely, if Target doesn’t have your size in those new shoes, you can scan the barcode in person, order them in a few thumb-taps through the app, and have them delivered to your doorstep days later. 

The end result? Customers get a high-quality brand experience—whether they use digital tools to buy in person, or shop in person to later buy digitally. The bet you need to make? Integrating your channels into one fluid experience for the customer—and giving them options—will ensure you satisfy their needs as they change.  

Digital is the way you differentiate 

Forrester’s U.S. 2021 Customer Experience Index found 21% of brands saw a significant score increase since 2020. What made the difference? The ones that rose above the rest were those that quickly responded to their customers’ evolving needs during the pandemic—with new digital strategies, new shopping options, and new ways of interaction.  

Bottom line? When uncertainty becomes the norm and change is the only constant, each day presents a new challenge. But the future will always be fungible. What’s key is being able to quickly react and act. Digital organizations leverage data-driven insights, use digital solutions to add value, and remain customer-focused in everything they do—allowing them to adapt to changing circumstances with agility.