2. BEYONDTHECRISIS?
—Consumer habits are changing agressively under the panedmic. Companies
and leaders need to reset for growth beyond the coronavirus crisis.
3. —The recent coronavirus (COVID-19) has forced immediate, far-reaching lifestyle shifts for consumers around the
world, and these changes are likely to stay beyond the period of pandemic itself. With social distancing keeping many
people at home, we’re seeing major shifts in behavioural trends.
—As people move beyond the current mode of survival, the momentum behind digital-experience adoption is unlikely
to reverse as people are forced by circumstances to try new things.
INTRODUCTION
Consumers have returned
to broadcast and cable television
and other premium media sources
for credible information.
Consumers are seeking more in the
way of escapism and entertainment —
downloading gaming apps, spending
even more time on social media, and
streaming more movies and scripted
programming.
Between remote working
arrangements and live-streamed
workout classes, college lectures, and
social engagements, we are testing
the bandwidth of our homes in a
largely pre-5G world.
4. INTRODUCTION
We’ll be talking about some steps that companies
can take to serve and grow their customer base,
based on past research that has evaluated the
impact of Economic Recessions on consumer
behaviours and firms’ responses to them.
Drawing on the existing empirical knowledge, our
review intends to offer a guide to marketing
managers on how to respond to the predicted ER in
the post-COVID-19 period.
5. -We see five major human implications to expect from
people’s behaviours now, and next.
ANTICIPATEDSHIFTS
7. The erosion of confidence will make trust
way more important than ever before. This
will necessitate a “trust multiplier”—action
that, to be effective, rebuilds trust quickly
and credibly. Focus will be on confidence-
building through every channel. Justifiable
optimism will sell well. All of this may
change the nature of what we regard as
premium products and services.
THECOSTOFCONFIDENCE
8. The enforced shift during the worst of the
pandemic to virtual working, consuming and
socialising will fuel a massive and further
shift to virtual activity for anything. Anything
that can be done virtually will be. Winners
will be those who test and explore all of the
associated creative possibilities.
THEVIRTUALCENTURY
9. The concerns about health amplified during
the crisis will not ebb after it is over. Rather,
health will dominate. A health economy will
emerge with opportunities for all to plug
into. Every business will need to understand
how it can be part of a new health
ecosystem that will dominate citizen
thinking.
EVERYBUSINESSISAHEALTHBUSINESS
10. Desire for cocooning, along with
opportunities for those with creative
strategies to enable it, will move centre
stage for the same reason. Winners will be
those who zero their sights on the home. At
the height of the crisis, many—workers,
especially— are spending more time at
home. After, this pattern will endure with
meaningfulness and comfort carrying a price
premium.
COCOONING
11. A reinvention of authority is likely after the
effect of travel limitations, self-isolation and
lockdown officially mandated by many
governments. This is likely to be the trickiest
of the five human implications as its impact
could go one of two ways. If governments
get their handling of the crisis broadly right,
expect top-down control to be back in
fashion; if not, the reverse. This is likely to
vary by geography. What role will companies
play?
THEREINVENTIONOFAUTHORITY
12. -We see five major human implications to expect from
people’s behaviours now, and next.
BACKDROPTOOUR
13. As governments gradually remove pandemic-induced restrictions and businesses begin
to reopen, there’s a sense that we might be on the verge of returning to “normal.” That
is unlikely. During the months of lockdown and self-isolation, we have been, in fact,
writing a new future. This has important implications for marketers trying to build
lasting relationships with customers. Granular monitoring of data and trends in
consumer behaviours has always been important to planning. Given the unprecedented
nature of the pandemic and the profound changes it is causing, we believe that
harnessing imagination may be just as critical. Marketers will need to think hard—and
differently—about what the consumer in the next normal will think, feel, say, and do.
A global crisis can either paralyze a marketing team or galvanize it to thrive. In the wake
of the COVID-19 pandemic, that’s exactly what we’re seeing: some companies are
cutting back on marketing (in some instances, laying off the entire marketing team),
while others are being more agile and coming up with interesting ways of engaging
their audience. Being conservative feels like the safe choice when there’s uncertainly
about how long the crisis will last but long-term studies show that the right approach
during economic uncertainty is to increase — not decrease — the marketing spend. A
recent study from the American Association of Advertising Agencies found that 43% of
consumers find it reassuring to hear from brands. In addition, 56% said they like learning
how brands are helping their communities during the pandemic. Only 15% said they’d
rather not hear from companies. That said, marketing during these times requires
sensitivity to what’s going on in people’s lives and the flexibility to keep up with swift
and swooping changes.
BACKDROPTOOUR
RECOMMENDATIONS
14. OURRECOMMENDATIONS
—We have developed six potentially important recommendations. Some of them
are meaningful accelerations of existing trends, some are likely to emerge now.
15. COVID-19’s impact on consumer behaviours and attitudes cannot be
understated. An ongoing study recently found that 76% people have
recently picked up new habits, behaviours and routines in the wake of
COVID-19. Of those people, 89% said they plan on keeping some of
their new habits. Consumers are also trying new products, with 36%
planning to continue using new brands they’ve tried after COVID-19.
Now is not the time to rely on assumptions. Any data from 6 weeks
ago—let alone 6 months ago—is already out of date. As the consulting
firm Gartner recently advised, CMOs must be proactive in monitoring
changes to customer behaviours and purchasing needs while the
crisis is unfolding. Businesses must move forward but do so with
genuine empathy. Marketers can help C-suite executives take the right
action by acting as a lighthouse for consumer understanding. Many
companies already have existing Voice of Customer and research
programs—these can be leveraged at this time to uncover the
emotions underlying people’s shifting attitudes and behaviours.
Doubling down on customer engagement and listening programs can
help provide insights on how to best move forward.
STARTWITHCUSTOMEREMPATHY
Impressively, some brands have already produced compelling campaigns
that speak to the realities of the pandemic. Feel-good content that
alleviates anxiety and promotes positive messaging will go a long way to
enhancing the brand. Dove, for example, created a spot shining a light on
the courage of health care workers. Some brands, like Budweiser and
Burger King, are focusing on social distancing and encouraging people to
do their part by staying home. It’s great to see creativity in storytelling at
this time, but marketers must push their companies to do even more. This
is the time to pay it forward and provide as much value as possible to
customers and communities. Every organization and person have the
capacity to contribute in their own way. The most important question
companies should ask themselves is this: “what can I do to help?” Giving
back can take several forms. In tech, companies like Apple quickly
mobilized their resources to produce much-needed PPEs. Following the
lead of many software companies, Nike has temporarily eliminated
its subscription fees for its app to help people stay fit while quarantining.
Many banks have moved to waive overdraft fees, recognizing the hardship
on their customers. SAP has made its Qualtrics Remote Work Pulse
platform free to companies who might be rapidly transitioning to new ways
of working.
TELLRELEVANT,AUTHENTICSTORIES
16. Some entrepreneurs and marketers are holding off action, thinking
that things will be back to “normal” in a few weeks or months. For one,
some scientists are predicting that some form of social distancing may
need to happen until 2022. That’s a long time to put any type of
marketing on hold. A more important consideration is the fact that the
pandemic will have a long-term effect on the psyche and outlook of
consumers. Regardless of how long the crisis actually lasts, COVID-19
will forever change the consumer landscape. After this comes to pass,
companies can’t go back to their old playbooks. Personas, messaging
and even product strategies may need to significantly evolve for the
realities of the post-COVID-19 world. The bottom line is that fresh
data and accurate insights have never been more important. In these
uncharted territories, relying on instincts alone is dangerous.
Marketers will need to think through how to manage today’s new wave
of data and how to use it to better personalize offers and messages to
ever-narrower customer segments. Analytics will need to play a core
role not only in tracking consumer preferences and behaviours at
increasingly granular levels, but also in enabling rapid response to
opportunities or threats. Existing analytics models may not be as
accurate when predicting behaviours in the next normal, and they will
need to be rapidly “trained” on how to best use new behavioural data.
This baseline of data can help brands expand the borders of digital
into the physical world to create more convenient and useful shopping
experiences wherever the consumer might be.
BEAGILEFORTHENEWNORMAL
Not surprisingly, consumer-sentiment research shows that personal
health and economic wellbeing are top-of-mind concerns for people
across many countries. And we believe the shared trauma of the
pandemic will likely have a lasting impact—especially as new
infection hotspots continue to emerge. Foot traffic in stores—as well
as travel and events—will only return when people trust that spaces
are safe and virus free. Increased cleaning and disinfecting as well
as a mandate that all customers and employees wear masks are the
top reasons consumers give for deciding whether or not to go to a
store. Marketers will therefore need to think through a much
broader range of shopping experiences, which will require greater
coordination with sales and operations teams across the business.
The preference for self-checkout or scan-and-go behaviours may
also change traditional store boundaries and layouts. Consumers
may be more willing to shop display walls, for example, where items
are shown and can be scanned for delivery.
CREATEASPACEFORHEALTHAND
AFFORDABILITY
17. The near-total shutdown of travel and other current lockdown
constraints have made local neighbourhoods much more important.
Many community social-media pages and forums have been created
to connect people with local volunteers and mutual-aid groups.
Businesses seeking to expand their connections with consumers,
therefore, can reap benefits by localizing their marketing. This could
include messages tailored to different neighbourhoods and delivered
through the newly established community networks; or using their
existing retail footprint to support local businesses, sponsor
community centres, and host community events.
Managing this hyperlocal activity and engagement will require
marketers to rewire their operating model to provide a more granular
presence at scale. This approach will need to build on many of the
capabilities developed around personalization and require renewed
thinking about how to scale content supply chains and manage
performance.
LOCALIZINGTHEEXPERIENCES
The crisis has made the home a multifunctional hub, a place where people
live, work, learn, shop, and play. This will be especially true as a growing
number of global organizations and employees attempt to sustain some of
the advantages of working remotely that they have now experienced. Net
consumer intent to spend on at-home entertainment has remained resilient
in many countries, even when consumers cut back on other expenditures.
For marketers, whether the at-home activity they cater to is digital or
physical (for example, cooking at home has picked up as a family activity),
they will need to engage with smart
devices and interfaces across the home. They should figure out how to
seamlessly deliver a message to a customer’s phone, tablet, and TV screens
when they are using those devices simultaneously. How they can market on
Alexa or Google Home. How they start two-way discussions (versus one-way
marketing) with people in their homes, without coming across as intrusive.
In addition, marketers will need to rethink their media mix across a larger
set of channels, such as videoconferencing platforms, virtual reality, and—for
the right segment—video games. The key issue for marketers in navigating
this “homebody economy” is in integrating it into the proliferating service
and products anchored in the home.
FINDINGASPOTINTHENEW‘COMMAND
CENTRAL’FORALLACTIVITIES
18. CONCLUSION
Years of (empirical) research in marketing have shown that recessionary periods provide an opportunity for marketers to grow
their brand’s market share, especially if they are prepared to think long term. Relying on the marketing literature, here, we
summarize several actionable insights for marketing managers to effectively re-organize their marketing activities during an ER
19. General marketing spending:
A proactive marketing approach is a powerful strategy to mitigate
the negative effect of an ER on the position of brands in the market
and in particular, to prevent consumers from (permanently)
switching to cheaper options available in the market (such as
private labels).
RECOMMENDATIONS
—Here's how we're taking it to the new normal
Advertising:
There is an opportunity in maintaining advertising spending during
an ER in order to keep or increase the brand’s share of voice. It is
even cheaper to access higher quality marketing communication
during an ER.
20. RECOMMENDATIONS
—Here's how we're taking it to the new normal
New Product Launch:
Firms should continue with their new product launch projects
during an ER, in particular in the window immediately after the
recession, when advantages of the launch can be more significant.
Price:
Temporary price reductions (TPR) are a very effective tool to retain
market share during the ER, especially if there is strong
competition in a specific category/brand with many private labels.