How Consumer Insourcing is Impacting You and Your Business (and 3 Steps to Deal with It)
“Home sweet home” has never had the same meaning as it does today. After 15 months of life altered by pandemic, Americans entered the summer of 2021 with dreams of a return to normalcy. But a funny thing happened as life opened up. Some people found that being out of the house and ‘normal’ wasn’t all that it was cracked up to be. That ‘insourcing’ and doing things yourself or at home, were as rewarding if not more so than spending money on “outsourced” items and services.
While typically used in reference to corporate operations and whether the work is done in house or by an outside third party, insourcing and outsourcing exist in consumers’ lives as well, especially when you consider the decision to outsource yard or home maintenance, cleaning services, and most commonly, meals.
Navigating to a New Normal participant Kelvin, 56, from the Boston area, described the difference between his outsourced and insourced lifestyle. “I used to live what I call the outsource life. I was working really hard. I’m outsourcing everything when I’m at work. I would order takeout all the time. I had someone doing my laundry. When you think about it, that, in and of itself is a supply chain. So doing stuff like cooking on your own Is really insourcing stuff. We started growing our own food to some degree. Being able to cook what you want allows you to address cravings a lot more quickly than [waiting] to go out to eat.”
Less pragmatic but no less valid was Brad’s experience in New York City. “We just have not gone back to restaurants like we did before. We had a bad experience with one restaurant where they jacked up the prices and you had a time limit. I think because of the past year, year and a half, it just broke that habit. It’s just, I’d rather eat here at home. I think we just got into a rhythm and [are] having fun with eating at home. On the flip side, the reward from eating out, it’s just not there.”
This is insourcing. When you don’t see the value in the time or experience in an outsourced solution, you do it yourself. Gail, 63 who’s now living in rural North Carolina, decided to build a dining table herself. “I wanted to get a table and I said ‘Well, instead of me going out to spend three hundred dollars or whatever, I’ll make my own table.’” Having never made a table before, she ran into some challenges but has figured out the workarounds and is pleased with the results. “That’s my creativity for the month. So, I’m happy about that,” she proclaimed.
A New Value Equation
For Navigating to a New Normal respondents who were insourcing, the themes that emerged were about the diminished quality of the outsourced experience — being rushed at a restaurant instead of being allowed to linger and catch up with friends you hadn’t seen in months, or the value of an object bought at a store that could be done by your own hand. The value of time has changed. American society is not racing to get things done anymore. We’re in a “stop and savor the moment” phase.
Jennifer, 41, a New York City event planner, has found some of her clients are switching up how they have her set up their gatherings. “From my group of people, they’re just not doing bigger … if people are doing barbecues, they do it themselves, something more casual where it’s like, ‘Oh my husband will grill some stuff’ instead of having it catered and more official.”
There was also an undercurrent of safety in everyone’s comments about insourcing at home. “I’ve not been a big going-out-person, but I took it for granted. Now, I recognize that this has been a haven,” said Barb, a retiree splitting her time in San Antonio and on the road with her husband in an RV.
“I would much rather stay at the house,” Kelsey in Salt Lake City told us. “We have a really cool hangout area now. And so partly I think it’s that we took the time to make things nice at home. But I also think I want to be there a lot more than I ever would’ve if the pandemic hadn’t happened.”
3 Ways to Deal with It
Insourcing doesn’t seem to be going away any time soon. Here are 3 implications and recommendations for your business to be your consumer’s outsourced solution:
1. Enable Quality Connections — The big insight coming out of the past 18 months is that most people are seeking quality connections with a close circle of friends and family over an extended network of acquaintances. This means lingering over drinks or a meal to have a deeper conversation than was typical pre-pandemic. This is a shift in the value of time. If you are in the restaurant business, urge your staff to resist the impulse to turn the tables over quickly. Let ’em linger to build loyalty. If you are in the grocery or at-home food business, the opportunity exists to help people entertain smaller groups with quality food and beverages. Perhaps some cocktail and apps suggestions on display in the store? If you are in the tech or content business, how could you help enable those connections?
2. Time Well Spent — As Larry, 68 in San Francisco told us, “I don’t feel like I’m missing out on anything. There’s nothing urgent that would make me get out of the house.” While time is valued by moments to linger, here, you also want to make it worth their while to get out of the house. This is a high bar to clear if you want to regain consumers’ on-premise business. Now is the opportunity to show your value with experiences they can’t recreate at home. Give them a reason to go out and spend their money.
3. Transparency is Authentic — Staffing shortages are creating havoc in many businesses, and some are raising prices due to supply chain issues as well as increased payroll costs. A fatal mistake is leaving your customers in the dark about what’s going on. “At least make your customers aware that you are charging them extra,” Dajon, 24, Phoenix shared with us. “A lot of companies are starting to charge for simple condiments like ranch.” Consumers weren’t born yesterday, give them a chance to have empathy with you by sharing what’s happening and causing your prices to increase or why your service isn’t up to usual standards.
Another factor that is dampening people’s desire to do more outsourcing is the diminishing power of FOMO, which we will be exploring in upcoming conversations with N2NN participants. And there is still the general feeling of anxiety, which this piece in the Washington Post does a great job explaining.
Where are you on this journey? Insourcing more, outsourcing less? What are your customers and consumers valuing most in their experience with you? It may be time to dust off those old value equations and give it some consideration.
This post first appeared on Ignite 360’s Sparks blog post, August 2021