The world seems to have suddenly discovered risk. It is natural in times of upheaval for people to question the continuity and predictability of the current state. During times of war or natural calamities, people come face-to-face with the fragility of their life assumptions. The fact that the current upheaval is the economic storm ripping through people’s lives across the world today makes it a disruption of unusual dimensions with uncertain effects.
An early reaction to the current crisis is the heightened sensitivity to risk for both consumers and businesses. Consumers not only seem to be dealing with the risk to their financial security but also seem to be generally more risk-conscious. This reflects in consumer’s attention on family security and the concern for a tight circle of loved ones. Risk to health, well-being and long-term sustainability of the environment are all receiving plenty of attention from consumers. Most importantly perhaps is the question mark raised in consumer’s mind about the risk to their dreams and aspirations. No longer is the road to happiness well-marked and clear. Consumers are therefore reflecting on their lifestyle choices and seeking simple, real and authentic over the elaborate and flashy.
With business buyers, the sensitivity to risk is not just for the business entity but also for the individual and his/her career. Along with the sudden awakening to capital risk and the risk of falling demand, business-persons are also questioning the sustainability of their strategies and the wisdom of explosive scale and growth. Many industries are far more aware today of the regulatory risks to their business operations as well as the sustainability of their business in the eyes of society. Business-persons are seeking “safe” choices – not just for their business but also for themselves personally and for their career. While this may be the time to take the initiative and be bold and decisive, many business-persons seem to be more focused on hunkering down.
Only time will tell how permanent this shift towards “safe choices” will be, but for now it is influencing most purchase decisions and choices. I therefore believe that this risk-consciousness has significant implications for marketers. While it represents a threat to many businesses from down-trading consumers or reticent business-buyers, it also represents an opportunity to emphasize the “safety” in your value proposition and grab market share from vulnerable competitors. Understanding the hierarchy of risk specific to your industry or category and how it is impacting your consumers, channel partners and competitors is an important imperative. Marketers that do this will do better than just “ride out the storm”.