A Recession Changes Habits

A recession is not the typical time to be thinking about business growth opportunities, but with an open mind, you might just find that there are some. Consumers are creatures of habit, buying in the same patterns and from the same vendors often for years at a time. A recession shakes up these spending habits. Consumers will break from routine to try new products and services, not just those with a lower price point, but those that offer best value for money.

In mass quantifies, this is a market shift or switch, and while it’s true that a tough economic period is characterized by lower overall spending, this period can often present an opportunity for smart businesses to grab some market share, or even introduce new lines. A market switch creates demand for new products and services. Perhaps your company can be the one to make them available.

Start by analyzing changes in your own spending habits, both as a business owner and individual. In particular, take notice of new suppliers/stores that you’re considering, and replacement items for those you are no longer satisfied with. Observe new products that are growing in popularity and determine if they are fads, or the beginning of a longer-term trend. Make time to read your trade journals, association reports, and the lifestyle section of the paper for social changes that will have economic influences.

Can you discover a gap in the marketplace? Is there something in demand that is not readily available that you could provide? What related products and services are associated with this growing demand? Of course, it goes almost without saying that you’ll need to do a full feasibility study before jumping into a new business line, particularly if it does not target the same base of clients you currently have. Be sure to listen to customers – have they asked for the products/services you have in mind?

It’s also important to think of the market switch concept from a defensive position. Canadian consumers will spend more time researching prior to making a purchase (than ever before). Are you providing the information, assortment, delivery time, or customer service they need to stick with you? Your competitors will be only too happy to serve any of your habitual customers, should they stray. Because a recession is a time of market switches, your business should be actively ensuring your loyal customers have a reason to stay loyal.