As the COVID-19 pandemic continues, behavioral trends continue a metamorphosis we know little about. Mckinsey surveyed 42 countries around the world, finding that “Consumers continue to spend significant time on home-based activities. To work around restrictions, consumers have adopted digital and low-touch solutions like videoconferencing, curbside pickup for groceries, and telemedicine. Looking ahead to the next “normal,” around 40 to 60 percent of surveyed consumers who adopted these new products and services intend to continue.”
Like any race for the fittest, companies that have an organized data ecosystem in place, that truly collect, analyze and act on it, are the ones that will take the win. It is important to look at what is happening to key industries. For example, outside of the food-related industries, consumers now want less density. At work, that will mean fewer open work environments, crowded elevators, skyscrapers, or crowded commutes. It may lead to a dramatic rethinking of living in big cities. Softbank took a $6.6 billion write-down on WeWork but stands to lose even more as the fundamental value proposition of WeWork — working side by side next to strangers — has become wholly undesirable overnight.
The birth of a new customer
The pandemic is most likely posed to create two types of consumer personas. Those who adopted a new lifestyle or self-care regime and social awareness, and those who kept their usual way of life. The at-home workout company Mirror.com reported “Sales have more than doubled since the advent of Covid-19”. While Peloton.com sales jumped nearly 66% since the pandemic. So this tells us that even though adaptability will vary from person to person, these two distinct archetypes will have a tremendous impact on brands. There will be the customer-aware brand who will seize the opportunity and steal market share by appealing to this new birth of a customer, and on the other hand, those who will refuse to change and lose loyal consumers. The first step in caring is to reach out—not in marketing or overt attempts to gain a competitive edge, but to offer genuine support.
Say bye to B2C and hi to D2C
As we all know, for years retail sales has been on a steady decline. Just this year at least 3,600 retailers like Victoria's Secret, Tuesday Morning, Bath & Body Works, Nordstrom, Sears, Forever 21, and Walgreens confirmed they will be closing stores. Due to this retail apocalypse, brands are pivoting to a direct-to-consumer business model selling in a more simplified fashion across digital channels. This not only means brands will need to invest in digital infrastructure, but they will also need to get to know their customers behaviors by stepping up data listening tools that can provide insider knowledge and keep an upper hand.
In many ways, society had already reached peak consumption. The pandemic could enable a new generation of enlightened consumers who will spend their money on products and services that provide a return on investment (ROI) (Forbes.com). The expected return on investment could be financial, social or in sentimental value. This leaves behind thoughtless spending, meaning industries that focus their offering on mundane, value-lacking products may be in for a surprise. While purposeful, socially conscious brands will come up on top. This is already happening in essential categories, as private-label sales at grocers and pharmacies are increasing, and pricing and promotion strategies are emphasizing value. (McKinsey)
Traditional customer insights techniques, such as surveys, often have an 18- to 24-day lag between launch and results readout. At a time when conditions can change from hour to hour, that can be far too long to deliver useful perspective. Companies should look to quick and novel ways to keep a pulse on consumer sentiment. A real-time tracking system must be put in place which not only provides capabilities to collect data, but to track it in real time in order to have the power to act fast.
What does that tell you about your old strategy? Now more than ever, companies must put the cards (or data) on the table and truly listen to their customers' behavioral trends shifting and adapt accordingly, to be able to drive profit and growth.