COVID-19 has been the single biggest accelerator of change in consumer behaviour seen in decades. Daily life for many people has changed in ways that were unthinkable at the beginning of the year. New circumstances and sentiment are driving temporary and fundamental behavioural shifts at speeds faster than any of us could imagine, and new consumer segments are emerging. Consumer-facing companies urgently need to assess their audiences and capabilities to remain relevant to newly emerging consumer needs.
Some of the changes we are seeing include:
- Major shift to online purchasing to minimise contact outside of homes with some countries seeing a 200% year on year increase in order numbers.
- Homes becoming multifunctional: workspace, school, exercise location, entertainment space.
- Changes in spending: consumers spend more in some categories and less in others as they focus on hygiene and health and worry about long term financial security.
- Changes in communication: widespread use of video calling for both personal and business use.
- New in-home entertainment – increase in streaming services and group video calls.
- Appreciation of businesses seen to act responsibly towards employees and consumers, even to the creation of “blacklists” of businesses who are perceived as behaving badly.
To succeed post COVID-19 you must re-assess.
We have to thoroughly reassess our consumers and not assume that past (pre-COVID-19) behaviour is an indicator of future behaviour any longer. Since most consumer modelling relies upon this assumption, there is a potential problem.
Existing customers are still finding value, but for different products and for different reasons than in the pre-COVID-19 world. So there is clearly a need to understand how to retain, let alone grow, these customers.
- Many companies are finding a huge increase in new ecommerce consumers. These may have come as an alternative to their regular purchase routines which were disrupted by lockdown. Importantly, these consumers are likely to want different things compared to existing customers, and may well look for different product and brand values. The challenge here is to keep these new customers, and avoid them drifting back to their old routines as lockdown eases.
- And with the strong move to ecommerce, brands with more traditional channels are highly likely to have lost consumers during lockdown. How do they convince them that it’s now safe to come back? And that the value they found via ecommerce can be found in store? Is the physical act of shopping and purchasing enough?
Four key questions to answer
New data is needed now to understand the emerging post-COVID-19 world and add value to the daily lives of existing and new customers to make them long-term and profitable.
- Is my pre-pandemic data still valid? Companies may be awash with data on their existing customers but if it’s pre-lockdown data then it can’t necessarily be relied upon if your customers’ behaviour has changed.
- Do I have new customers and if so are they different to my previous customer base? If lockdown has resulted in lots of new customers, you won’t necessarily have enough data, or the right data, to fill that ‘data gap’.
- Can you bring back lost customers? If you have lost customers you need to find out where they went and why. What will it take to bring them back?
- Lastly and importantly, is change still going on? Are customer needs still evolving? In which case what opportunity do you have to shape that journey?
Time is of the essence here.
There are tactical and strategic challenges to address, and all need to be guided by market and customer data. While all the usual customer metrics are going to continue to be gathered, their relevance is uncertain.
So to help map old data to new data, and to get a correct grasp of where customers now see value, additional customer insight is required. We need to understand what has changed, and how fundamental that change really is. In a sense it is a complete updating of ‘what’, ‘where’ and ‘why’.
This is likely to require mixed mode qualitative and quantitative research (at least initially). We can identify question areas where we now need answers, focused on what consumers now do and now think. And these questions segmented by existing, new, and lost customers. Maybe even amongst potential customers as well.
Here are some suggestions that you might want to consider to develop your understanding of how values and motivations may have changed:
- There are questions around changes to product purchasing.
- What are you buying more of, and less of, since lockdown, and why?
- Have you discovered new products or brands since lockdown that you might continue to buy? How did that happen, how did you hear of them?
- What are you really looking for in new product choices? What drives consideration now, and how has that changed?
- There are questions around changes to purchase channel usage.
- How is your shopping now distributed between online ordering for delivery and instore? What has shifted?
- Has your attituded to online changed during lockdown? Are you now buying categories of goods or brands online that you were not before?
- What brands or goods might you continue to order online? And what will you switch back to instore?
- What could be done to make the online experience even better?
- How could the instore experience be changed to make you feel more comfortable returning?
- There are questions around how lifestyle and the multi-function home is driving changes to product needs and usage, as well as deeper lifestyle value questions about more fundamental and subtle shifts in attitude, aspirations and values.
- Has the whole lockdown experience changed how you look at brands or products?
- Are there now some brands or companies you value or prefer more or less than before lockdown?
- What is it that you like or dislike about these brands or companies?
- As a consumer, do you think you have changed as a result of the whole COVID-19 and lockdown experience?
- Would you personally want to go back to exactly as you were before COVID-19? Are there things in life you now value more, or value less?
- Do you see yourself doing different things, enjoying life in a different way after COVID-19.
All these question areas can be drilled down into more quantitative datasets. But for me the key issue is to understand how values and motivations have changed – the ‘why’. These will be the future drivers of consumer behaviour, so understanding the ‘new consumer normal’ is key to updating those data models – or deriving brand new ones.
So what? Why not let it all work itself out.
The post-COVID-19 world is already being reshaped by consumers and by brands. The question is: will you be a winner or a loser.
A collaborative article by Phil Todd and Ailsa McKnight