Not Enough Microchips or Ketchup, Now That’s a Problem

How human behavior shifts everything in markets.

When the pandemic came, how people lived, what they did and how life occurred for millions of people changed overnight. Restaurants were shuttered, toilet paper and cleaning supplies disappeared off the shelves and people stopped driving and worked from home, hunkered down with their laptops.

Human behavior is a funny thing, driven by changes in our physical environment and our perceptions of the world. As lifestyles at an individual level changed, with up to 60% of Americans working from home, what people actually needed in their daily lives also changed. Car sales dropped, ketchup consumption skyrocketed and everyone was buying a new laptop or iPad.

The ketchup conundrum, what to make for whom?

“The pandemic turned many sit-down restaurants into takeout specialists, making individual ketchup packets the primary condiment currency for both national chains and mom-and-pop restaurants. Packet prices are up 13% since January 2020, and their market share has exploded at the expense of tabletop bottles, according to restaurant-business platform Plate IQ.”

The Wall Street Journal

Ordering more food to go, home delivery became the focus of many if not all restaurants. The result: demand for the little packets of ketchup skyrocketed way beyond what makers like Heinz could quickly adjust for. So, suddenly there was a ketchup shortage.

More microchips for new cars, sorry, not possible right now.

As millions of Americans stayed at home, that drove a surge in consumer electronics sales across the country. Laptops to iPads, every possible digital device was being purchased on Amazon for home delivery. The auto industry slump in early 2020 recently saw the beginning of a recovery in demand for new cars in late 2020. However, microchips just weren’t there to build the cars. This shortage squeezed auto parts suppliers who use chips for auto systems that control gas pedals, transmissions and touch screens. 

Chipmakers compounded the pressure by rejiggering factory lines to better serve the consumer electronics market, which generates far more revenue for them than autos. As a result car makers just can’t make enough cars right now, which is affecting everything from new car purchases, rental car fleets (they sold off half their cars during the pandemic), and Uber and Lyft drivers.

Understanding behavior and what motivates people is the key to marketing insights.

The similarities of these supply problems are all about human behavior — what people do and how they decide what is important to them when they perceive big changes. How they act really affects the whole world around us (remember toilet paper shortages?). Staying ahead of this behavior and discovering real motivations is really the key to meeting the needs in the market, whether it’s ketchup, cleaning supplies or microchips. 

This is why tracking the “why” that motivates human choices isn’t always rational and yet it gives you keen insights into what people are really up to and how to stay in touch, reach them and stay ahead of them.