COVID-19  •  Sectors & markets

Consumer behaviour in a COVID-19 world

The good news is that consumer spending is strong, but trends that began before the outbreak of coronavirus have gained momentum, creating unpredictable challenges for consumer-facing businesses

There is a marked acceleration in the need for companies to re-envision their communication and engagement strategies, says Simon Cole, a Business Development Director EMEA at the global branding company SGK, as consumers move to new patterns of consumption.

Growing trends in online shopping has now developed into a necessity for many consumers who are avoiding physical interactions at all costs, by choice or by mandate. A Coresight Research study in February already showed that if the outbreak continued more than 50 percent of Americans planned to avoid shops in general, and more than 70 percent said they would no longer visit malls or shopping centres.

A short-term surge in sales of consumer packaged goods (CPG) saw consumers stocking up on a range of staples. Sales in oat milk were up more than 300 percent in late February, while water sales were up just 5.1 percent over the same period. Other popular items included dried beans, energy drinks, pretzels – and of course toilet paper.

For Cole, the behaviour highlights an important facet of the current context – its unpredictability – and he advises companies to step back and focus on a few key data points to drive their engagement strategy. ‘Being ultra-targeted can miss the mark,’ he says. ‘the challenge is to design your strategies for the unpredictable.’

Contactless or frictionless experiences

Striving to minimise human-to-human contact, consumers are creating an increased demand for contactless payment, with Chinese retailers such as JD.com and Meituan experimenting with end-to-end contactless solutions using unmanned vehicles and drones.

This means creating experiences which make consumers feel safe, and which they can get accustomed to, says Cole. Disruptors in the banking sector, such as Monzo Bank, are offering contactless onboarding for new services where customers can update personal information and documents from their phones. Traditional giants like Mastercard are experimenting with conversational AI technology for their chatbots, which allows for a transition away from call centres.

Community, community, community

At the same time that customers are seeking streamlined services, they also show increased interest in community and shared experiences. Cole cites a Forrester study which found that consumers want brands that look out for the interests of their customers, that build strong relationships, and that create extraordinary value for their customers and themselves.

‘It showed that 52 percent of US online adults prefer to buy from companies that show how they are protecting customers against the threat of COVID-19,’ says Cole. He cites examples of companies going the extra mile, such as Pret and McDonalds offering NHS workers free coffee and meals, and Zara making scrubs for nurses in Spain.

Yet there is still a healthy amount of scepticism. The same study showed that only 24 percent trust that companies are currently putting their health and well-being first when making business decisions.

Spending and consumption

Many will be happy to hear that spending habits do not appear to be dropping, but crucially they are moving channels. ‘The question for many companies now is can their products or service be procured though these new channels,’ says Cole. ‘And, is your company communicating this?’

Consumers are also making purchasing decisions based on safety, availability and timeliness before cost – though cost is of course still a factor.

What this shows for Cole, is that there is room for innovation. ‘Grocery sales rose by more than twenty percent in the UK in the last four weeks.’ This has multiplied the opportunities for consumer touchpoints and the creation of new purchasing and delivery services. content.

It also opens the door for content as, unsurprisingly since the global lock down, consumers are filling their time with increased content consumption. In Italy, live-streaming viewership (in terms of minutes watched) rose sixty-six percent since quarantine there began, following the increased popularity of TikTok and Twitch video services on a global scale. There has also been a large increase in the download of gaming apps and video.

Cole advises companies to build their communication strategy to be community focused, empathetic and delivered though consumer preferred channels. ‘It is about having empathy for your customers current situation and the larger environment we find ourselves in.’

 

Simon Cole, Business Development Director EMEA at SGK, spoke at the French Chamber’s Webinar ‘Consumer behaviour in a COVID-19 world’ on 3 April.

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