With COVID-19, one thing is certain: the consumer landscape has drastically changed for the immediate future and the marketplace will undoubtedly be altered post-pandemic.
Just as September 11 completely altered our sense of security and risk related to air travel, COVID-19 will also have a long-term impact on consumer behavior. Anticipating these behavioral changes and their potential impact is the job of marketing research.
As you begin to consider the future of your business, we have created six areas of research focus to help with your response to COVID-19.
“Shelter in Place” orders have resulted in consumers spending more time in their homes than they have in a decade or possibly ever. We chuckled on March 15, when a meme was sent around on Twitter: “Night 1 of no sports: My wife and I just had an hour-long conversation. She’s nice, apparently, she works in the medical field. Also, TV’s are black when they are off.” As weeks begin to stretch into months, we are running out of movies to stream.
With their worlds now confined to home, what will consumers learn about themselves, their spouses, their households, their needs for the future, or their emotional desires? Anecdotal evidence already points to an upsurge in home improvement projects. Everyone seems to be baking bread. Will this continue? Will moms become a new wave of mainstream preppers after spending weeks at home with kids? Will activity areas for school aged kids be returned to dad’s man cave? Experiencing the convenience of buying almost everything online may forever change consumer purchase behaviors. Will the need to have room for the sanitizing of packages and goods received at home have long-term behavioral implications? Will people find that exercising at home is more convenient and sanitary than going to the gym? Certainly consumers will have a new appreciation for the need to make their homes more livable.
Changing consumer behavior is always a challenge for brands, but COVID 19 is likely changing consumer behavior permanently, both for the benefit and to the detriment of many businesses. The time to plan for your response to these potential changes is right now.
After the urban flight to the suburbs slowed in the 80s, re-urbanization has been relentless across the globe, with the top dozen global cities accounting for a nearly all of the growth in wealth and innovation for decades. Now many of those global cities are the source of the worst outbreaks. This is the third novel coronavirus epidemic in less than two decades. What was once rare can now be expected to be common, and the impact on consumers relocations is yet to be determined. Will they flee the great cities? Or will social distancing become a common-sense and permanent feature of urban life? If so, industries that depend on foot traffic will need to reposition their offerings to succeed (restaurants, event spaces). Smaller regional cities may see an upsurge in growth (this trend had started before the pandemic). Shouldn’t businesses potentially impacted by demographic population shifts ask consumers what their plans are for the future?
GENERATIONAL TRAUMA … OR NOT
Just as the Great Recession shaped the consumer behavior of Millennials forever, COVID-19 will undoubtably alter all of us permanently. Every generation is suffering but the real question is how enduring the likely suffering will be.
Already scared by the Great Recession, Millennials will become even tighter with their money and commitments. Generation X will fear for their retirement security and their children’s future, as well as struggle with being separated during quarantine. Baby Boomers face more immediate retirement worries. The Silent Generation suffers disproportionally from the virus and from their more limited ability to maintain digital social connections. What was once unimaginable to you has just occurred: connections to friends and access to favorite activities have been abruptly severed, potentially for a very long time.
Gen Z is a very interesting case. They are already highly adapted to digital socializing. Gen Z is experiencing cancelled school, cancelled plays, band performances, debates, and sports of all kinds, but given the fact that they have grown up in a digital world, will they be scared from this or will they not even miss a beat?
If your business relies on any of these generational cohorts now or in the future, you should be thinking about how to reach them and help solve their challenges during this trying time and in the new normal to come.
Sports, the arts, events, and the movies have all been canceled. Will COVID-19 hobble the corporate events business that just seemed to be recovered from the Great Recession? How will other mass events react to consumer fears? These industries will need to think of new ways to bring people back after the initial risk has receded. What can a company do now? While it is well understood that it is easier to retain your current customers than to acquire new customers, how a company should maintain contact with them under these circumstances is complicated. Make sure you know how best to communicate with them.
Sports will always be important, but attendance may not be. Where and how will these events be watched in the future? Will some events become giant studio productions (with synthetic fan-tracks?), audiences limited to watching on TV’s at home or at the local Sports Bar? How will visiting Museums or seeing a Play or Musical change? If you depend on events, determining what it will take to get consumer back would be critical right now.
MICRO DIRECT TO CONSUMER
Businesses capable of rapidly adapting to curbside pickup for online orders are surviving in urban hotspots. Retailers that lacked the ability to go direct with consumers and coordinate To Go orders are closed. Many will never re-open. Some estimates are as many as 70% of the small businesses (mostly restaurants) will not survive the COVID-19 shut down. Companies that do survive will take their direct to consumer (DTC) business VERY seriously in the future. How can business’s relying on consumer populations in tight geographies be better at DTC? Micro-targeting, micro-segmentations will be crucial as business reframes for the new normal.
LOWER LEVELS OF TRUST
As we all isolate at home for the public good, personal trust is limited to those we know. Will the wariness of strangers outlive COVID-19? Will the pandemic compound the political polarization of the 2020 election cycle? Will social isolation breakdown social antipathy or engage? Will the political and regulatory leaders entrusted with public safety be forgiven for the breakdown in the supply chain for critical medicines and materials, or will the public perceive this as a grave error and hold them accountable? Is it ok to fight the pandemic by harnessing surveillance tools that were recently derided as the tools of autocrats? Businesses, especially service industries, will have to work harder than ever to engender trust among consumers. Understanding the “trust gap” will be critical to business as they determine how hard they must work. Key drivers of trust and mistrust must be measured and addressed.
IF EVER THERE WAS A NEED FOR PREDICTIVE MARKETING RESEARCH IT IS NOW
Amid the health and economic insecurity surrounding COVID-19, the consumer landscape has drastically changed for the immediate future, and the marketplace will undoubtedly be altered post-pandemic. Just as September 11 completely altered our sense of security and the way the world travels by air; COVID-19 will also have a long-term impact on the consumer.
This is new territory for the world, and against this backdrop, new business and marketing strategies and tactics must be developed to inform the way we do business or begin new businesses. This is not a time to “shoot from the hip” or make major decisions based on emotionally laden hunches. This is a time to be strategic, thoughtful, and calculating.
This article was adapted from a conversation between George Murphy and Kirsty Nunez, frequent collaborators on marketing strategy and insights projects for their clients around the globe. George leads Seattle-based marketing strategy firm Modo Group. Kirsty is the President and Chief Research Strategist at Q2 Insights, Inc., a research and innovation consulting firm with offices in San Diego. Janene Forman is a Research Analyst at Q2 Insights. If you would like to learn more, please reach out to Kirsty at (760) 230-2950 ext. 1 or firstname.lastname@example.org.
This entry was posted in Trends and tagged on April 10, 2020 by Q2 Insights