Whitespace Forecasting During Volatile Times

Is it possible to forecast consumer behavior during volatile economic times?

Reading through recent earnings reports that are trickling in, a common theme emerges: companies weren’t prepared for the sudden shift in consumer behavior that happened over the summer.

What they really mean is that they thought (hoped) that the halcyon spending of 2021 would continue even though the writing was on the wall that it would not.

Which is a shame, really.

The clues about this behavioral shift have been around since last year and while forecasting future behaviors during times of uncertainty may imply the use of a crystal ball, there are actually lots of ways that this can be achieved.

Some of the early clues & tactics that uncovered this behavioral shift are:

1️⃣ Past Precedent: While it’s hard to make apples-to-apples comparisons to 2008, there is a distinct pattern of market polarization that happens when consumers face economic downturn. Polarization started to emerge in the form of higher top line performance in luxury and a slow down of mid-market (especially DTC) brands over the past 9+ months.

⚡️Bottom line: When times get tough, consumers run from the middle towards either luxury or value.

2️⃣ Talk to your customer: Anyone listening in on a well-run focus group or customer interview this year would have heard lots of clues about behavioral & lifestyle shifts that created a ripple effect in spending patterns.

⚡️Bottom line: Don’t make assumptions about your customer. Talk to them.

3️⃣ Intentions/Actions Gap: As a caveat to the above, it’s important to remember that there is often a gap between what consumers say they’ll do and what they’ll actually do . (Example: customers overwhelmingly say they support sustainability but shopping behaviors show a different story.) An experienced forecaster can analyze consumer feedback within the context of this gap and account for it.

⚡️Bottom line: Investing in a consumer deep-dive can uncover these behavior gaps and help brands prepare for them.

When consumer insights are delivered thoroughly and often, there should be little to no surprises for brands.

Consumer insights are an antidote to risk and are the most important tool for brands to leverage during times of economic uncertainty.

What would it look like for your brand to stay proactive in times of uncertainty? What could you gain if you could avoid panic and course correction 💸💸 and focus your team's energy on executing a solid strategy?

As a reminder, MOONSHOT delivers unparalleled consumer and product forecasts that anticipate crucial consumer behavior shifts. Reach out to schedule a call and discuss the future of your brand.