Consumer behaviour doesn't change easily, but the mass disruption in people's lives caused by the COVID-19 crisis is shaking many expected patterns. Despite all the uncertainty, those forces will push people out of their habits and nudge them to try brands they have never bought before.
''Nothing will ever be the same after this crisis" is how literally every single interview, podcast, article and even advertising is starting with these days.
I tend to be a bit more sceptical. It's well know how hard it is to create sustainable behavioural change, even when it feels that the world is turning upside down. If we take emotions out of the game and carefully look at our past, we will notice that many events that felt overwhelming at one point quickly disappear in thin air after a couple months.
An example from the consumer world is when Volkswagen went through the scandal know as '"dieselgate" during the last quarter of 2015. The massive negative media had its impact in the short term: 2016 sales grew only 1.9% versus 5.4% in 2015. However, it seems that in 2017 people already had bigger concernes to deal with: sales grew 5.7%, more aligned with the company's historical average.
That was perhaps a big disappointment for all the prophets promising that the consumer world would finally wake up and dramatically change behaviour to buy in a more environmental-conscious way.
That said, things do move in face of major life events such as the COVID-19 crisis. Consumer behaviour changed and will continue to change in the short term (easier to predict) and perhaps a little bit of this change will remain in the long term (really hard to predict).
I believe there are four major forces driving behaviour during this crisis. All of them have one thing in common: they are nudging people to buy and use brands they have never bought or used before.
Check it out:
1 PEOPLE ARE BUYING/USING NEW THINGS TO ADAPT
A new work desk and chair. Zoom or Teams. Gym kits. Kitchen appliance for the newly born chefs. Deliveroo, UBER EATS and JUST EAT for the lazy chefs. More toys to entertain the children. More toys to entertain yourself. More alcohol! People are moving out of their ordinary consumer habits simply to adapt to a new reality, buying out of pure functional needs. Brands that can fulfil those needs have an opportunity to act now (this force won't last for much long).
2 PEOPLE ARE BUYING BRANDS THAT ARE AVAILABLE
Two very abrupt effects of this crisis are supply chain disruptions (i.e. factories closing) and panic buying. Those effects are whipping out the most popular brands from shelves, leaving least popular or niche brands as the ones available. It's an opportunity for those niche brands and new entrants to find a bigger space in the market.
3 PEOPLE ARE BUYING CHEAPER BRANDS
People are loosing their jobs, getting contracts re-negotiated or simply cutting spend to deal with the unprecedented market uncertainty. For the essential categories (i.e. groceries), people will sacrifice their favourite brands to save some money with cheaper ones and those in promotion.
4 PEOPLE WILL TRY NEW BRANDS BECAUSE IT "FEELS LIKE A GOOD TIME FOR IT"
This is the most interesting force and perhaps the least obvious one. Research on habits shows that, in face of a major life event (e.g. a wedding, graduation, moving to a new house, or, I don't know, a PANDEMIC), we are more open to try new things. The great behaviour scientist Richard Shotton conducted a research with 2,370 nationally representative participants asking them two questions. First, which life events they had undergone in the last 12 months. They were prompted with a list of nine life events, such as starting a new job or university, getting married or divorced or retiring. Second, they were asked to state, for a variety of categories, whether they had tried any new brands in the last year. His findings were staggering. On average, people were about x2.5 (!!) more likely to have tried a new brand in each of the categories if they had undergone a life event. Among those who hadn’t had a life change, 8% had switched brands. Among those whose lives had recently changed, 21% had switched brands. This offers an opportunity to sustain advertising spend to gain market share from competitors (e.g. wine brands, craft beer) or to recruit customers that are entering your category for the first time (e.g. meditation apps).
Finally, here is a fifth bonus force. This one is more based on my own experience than anything else, but I think it has legs: people will buy more new brands online out of irresistible impulse. I have noticed that my online consumption has dramatically increased during isolation days. That would't be a surprise if the items were just replacing things I would buy during normal times (e.g. delivery instead of restaurant food), but there are quite a few random things. Books on unexpected themes, paintings, clothes, gifts, furniture. My hypothesis is that e-commerce channels are just really good in capturing impulse shopping (Amazon, please stop taking all my money...). It's a bombastic cocktail of one-click easy buy with people spending more time online, a bit of boredom and a final pinch of anxiety to get some external world excitement.
Some may argue that during uncertain times we tend to be more careful and stick to what we know. However, in my view, the forces discussed will overshadow any urges we may have for the safety of sticking only to the brands we know.
Ok, behaviour is changing. What do we do about it?
If you own a business or manage a brands's marketing team, consider how those forces may shape your demand.
The first thing to do is to evaluate which of them are impacting your category, and to what degree. Second is to understand if your business specifically is being shaped by those forces more or less than your competitors. Finally, build an emergency plan to act on those forces now (during isolation), in the medium term (during opening) and in the long term (residual behaviour change).
The important thing to notice is that the long term impact (if any) is really hard to predict, so the opportunity really is to be fast and adjust in the next few months.
No need to say that this is just a consumer behaviour analysis during an incredibly difficult time. I hope everyone is safe and doing the right thing, if at all possible. In a time when things tend to me more memorable, perhaps those actions are the ones that will really stick with people for years to come.
Cover photo by Matt Hardy, from Unsplash
Comments