How to sell during crises: customer behaviour

How to sell your products during economic crises? How can artisans and SMEs compete with low cost manufacturers? How do we find the right clients for your products?

These are the questions that each small company and artisan is asking of himself at this time. Finding the correct answers to these questions leads to the capability to be successful in business.

First we should have no doubt about the quality of our products – that is a prerequisite for all but ‘junk’ marketplaces. With that assured we can concentrate on how markets and market places have changed, how these aspects have changed the habits of consumers and clients and what is the next market scenario where we can compete and be successful.

The evolution of commerce

The cycle of commerce has seen rapid changes in the past 50 years just as the urban life in our city centers has developed.

Firstly, small family run shops have virtually disappeared as a viable business model in favour of malls. Subsequently, we have seen the decline of malls in favour of electronic commerce. Yet electronic commerce, just as a mall but to a lesser extent, fails for the sale of specialist products and items of individual luxury without ‘world‘ brand-names. Here, we need to differentiate between the large name brands such as Hermes, and the small and medium artisanal producer who is depending on attracting customers to galleries and shop corners.

Let us review the history of commerce with an objective to understand our own and other people’s behaviour so that we will be on the right track to find the solution.

For centuries city life was in the center of the towns. In every village and town, the town square and its small radiating streets were the center of all a commerce with a range of specialist suppliers to service every need of that community. The big towns were little different. In Ancient Rome, near Foro there was Mercati Traianei, a partially covered place with hundreds of shops that we can consider as the first mall. Life was in the Forum and buying was next to it. The two places were physically connected.

Nothing has changed till the arrival of cars (ability to move) and then the two places could be physically disconnected and malls started to have their own life. This has changed very deeply the lifestyle of many towns. The function of small shops had also been to control the territory, to light the streets and to keep connection between people alive. Especially in the warm regions, community life was and is mainly on the streets and squares. We can affirm that small shops are a sort of “common goods” of a town-human relationship.

Malls are totally disconnected from city or village life, they are based on numbers and not on human values. Goods have to be cheap while there are high costs of shop maintenance. Generally high volume goods come from low labour cost countries and there is little effort or interest by the shop to select products from hundreds of small artisans and SMEs – even in cooperatives. Shop owners normally are not in the shops, and often not in the same country.

But we have to take into account that “buying” is always an experience, in malls the emotion from small shops of selecting goods while talking with shop owners and learning about the stories of producers have been replaced with the emotion of big brands and the ability of advertising experts to ‘confuse’ the customers, such as with the entertainment organized by the mall managers and PR.

In this situation, many small shops in malls have become just subsidiaries of big brands and expert sellers have been replaced by good looking young people who have been trained maybe just for a week.

City centers have been deprived of community life and have changed in two directions: a ‘center of bars and pubs’ for locals or ‘shops for tourists’ in tourist towns.

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Electronic commerce

Competition on price has been easily shifted onto the web. Two advantages of the web are the much wider variety of products can be presented and the presence of blogs and third persons who can advise. As the young un-trained sellers in the mall shops cannot give much information, the web is ‘heaven’ for people who want to know more about products.

Electronic products, cheap goods and services are mainly bought on internet. Platforms and Apps such as Edreams.com, Booking.com, Amazon.com have now become part of everyday life. Many travel agencies have shut down but it is interesting to understand that others have opened. New forms of personalized travel: adventure trip organizers, personal travel assistants, every niche idea is available to satisfy the thousands of ‘unusual’ travellers.

Each of the well-known platforms are normally spending a lot of money in advertising to be the first in every search by each human being on the internet (actually 3 billion people are connected to the web) as well as managing perfectly their SEO – Search Engine Optimization – the way people find you and your products on the web. SEO is today what a sales agent was in the past.

Mall vs Electronic commerce

The decline of mall is a fact. It became defined in USA with the first financial crisis in 2006 for several different reasons – all with a common aspect: little money for spending. Normally malls are outside cities, in suburbs or countryside. When the cost of fuel ran up, workers chose to avoid paying for their trip and consumers started to find goods on the web with home delivery. Many malls soon became ghost cities and Youtube shows many of these abandoned ghost malls. There are already movies and documentaries on this subject. This is now happening as well in many parts of Europe.

Greed and laziness have been the real causes of this situation. Greed for easy money with cheap labour, greed for immediate earnings by building enormous malls created with bank debt with worldwide name brand supermarkets to service the bank loans, greed of mall managers to overcharge on rentals, greed of young managers without expertise in marketing or selling. Sellers became lazy: no longer studying and understanding the story and quality of products, without real emotions – advertising solely by big brands – no creation of other personal services to support the products.

Once I was surprise by the answer of a young employee in a specialised sport mall. I was asking about a jumper and she answered that she was not expert of that row of goods but only of the other. Wow! In a small shop an answer like this would kill the business. As a customer I will buy in that mall only by price and not by quality.

Greed is unsustainable for a community. Environmental, economic and social sustainability are the only success keys to adapt, survive and grow during changing times. Here, we are not referring to de-growth theory, but more to changing habits and lifestyle towards sustainability, modified lifestyles that involve creation of happiness.

The forecast is that many other malls will decline, become uneconomical to maintain the overheads and consequently close their business. And the decline will be rapid. If a shop closes in a city center, the “feeling of life” in the city can be replaced by the lights of streets and people strolling on sidewalks, but when a shop closes in a mall and the lights are switched off, then desolation will arrive very soon.

It is like the story of the broken window in a house, a post that sometimes reappears on Facebook. A magnificent palace, even when closed, can still be perceived as alive. But once one window is broken, then it appears immediately as declining. The difference is only in the little money needed to repair the window, but the emotional effect is totally opposite.

So what can we learn for web marketing from the analogy of the mall? It is the same for the web. If your website is not sparkling and continuously updated, it is better to switch it off and move to a city center, a place with other people that is focused on emotions and in creating good relationship with customers. You have a small budget, so how can you get the ‘biggest bang for your buck’ – with a great web profile or in a shop corner?

What about selling fine handcrafted products?

There is a probability that if you are creating fine handcrafted products you are not a big brand yet and you need to understand where to direct your selling effort. You know that the products are excellent and buyers are moved by emotions, but where are the right buyers for your products?

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