John Rindone, VP - Client Relationships
CHANGES IN CONSUMER INTERACTION WITH BRANDS AS A RESULT OF COVID-19
Social disruption is ingrained in the human condition. Throughout history, society adapts and evolves due to pressure from external forces. The automobile, world war, the internet, 9/11, the housing bubble, all forced people to rethink how they interact with each other, the government, and businesses. 2020 and the COVID-19 pandemic was a social disruption unlike any other. Shifting preferences, digital adoption, and economic turmoil fundamentally changed the way consumers interact with brands.
After the September 11 attacks messaging and product offerings shifted to focus on simplification and staying at home. Much like today, society focused on safety and reconnecting with families and friends. Unlike today, kids stayed in school, teens went to the mall, college students were on campus, and blockbuster movies were released in theaters.
The pandemic disrupted travel, education, shopping, work, home-life, entertainment, and healthcare. Consumers experienced changes across every facet of their lives. With vaccine distribution rolling out and a return to some semblance of normalcy, what changes can we expect to stay around permanently and which will disappear with the virus?
Shifts In Consumer Behavior
While the economy absorbed the hit of high unemployment and an unknown future, we didn’t see a reduction in overall consumption as much as we saw a shift in what we were consuming. Toilet paper aside, consumers looked to new, COVID resistant hobbies to distract themselves and keep their children busy. Sugar and baking supplies flew off the shelves, hiking and outdoor gear sold out overnight, and DIY suppliers experienced overwhelming demand.
This shift isn’t exclusive to retail and consumer packaged goods (CPG). Travelers who were mandated to stay away from the ailing travel and tourism industries looked to RVs and campsites to get out of the home. Movies skipped the theater and went straight to streaming, where viewers could enjoy as a group with Hulu watch parties.
Never before has nearly every industry had to adjust to such a drastic shift in consumer behavior.
As vaccinations are distributed across the country, there is plenty of pent-up demand for products and services that have been particularly hard-hit by the pandemic; think travel and dining. We expect a shift back to pre-COVID consumer behavior as people return to restaurants and opt for convenience over DIY. However, many of these new preferences are likely to stick, especially those related to community, hygiene, and mindfulness. Brands that build trust during these tumultuous times will stand out as consumers adopt a new way of life that blends preferences from pre- and post-pandemic times.
In a matter of weeks, companies, schools, even churches adopted video conferencing platforms like Zoom. eCommerce saw a boon in traffic and sales. At-home alternatives like Peloton became the norm. Consumers were forced to adopt digital behaviors seemingly overnight, including many who were slow or unwilling to adopt the behavior in the first place.
Conveniences like buy online - pick up in-store (BOPIS), curbside pickup and contactless payment quickly became standard in the retail world. Companies that excel in our post-pandemic world are the ones who create a seamless, memorable omnichannel experience for the end-user. Those that optimize their customer journey now will reap the benefits down the road.
Rapid digital adoption extends to industries like healthcare and financial services. Companies in these industries quickly developed online product offerings to aid consumers in a socially distant world. Telehealth grew by leaps and bounds as patients became comfortable with the safety and convenience of sending photos and requests to doctors before a video-conference powered consult.
Similarly, the financial sector has seen advancements in digital, cloud-based services to better serve and engage with their customer base. While face-to-face meetings with doctors and trips to the grocery store are already returning, the convenience of these digital tools is certainly here to stay. Just like retail, the companies that leverage these tools into an omnichannel offering will thrive in the new normal.
COVID-19 disrupted everything for B2B and B2C companies. Channels shifted, marketing adjusted messaging, operations rebuilt supply chains, and companies reimagined the office space as we know it. According to a McKinsey survey published in October 2020, “companies are three times likelier than they were before the crisis to conduct at least 80% of their customer interactions digitally."
So what changes can we expect to stick for businesses in 2021 and beyond?
Inventory management will be huge.
The conveniences of BOPIS and curbside pickup aren’t going anywhere. Managing and exceeding customer expectations with accurate inventory and smooth supply chains will separate the winners from the losers.
Consumers are online and not coming back.
eCommerce made huge gains in 2020. The breadth of products and services available to consumers is now a 24/7 affair. Companies need to understand how to reach and engage with their audience online.
Face-to-Face Should Complement Digital Tools
COVID restrictions are lifting and consumers are seeking social interaction once again. Sitting down with their banker, getting DIY advice from their local Home Depot, and traveling to far-off destinations will come back - but they will be different. In the case of the banker, paperwork should be managed in the cloud; the hardware store, order ahead and pick up without waiting in line; the airline, track, manage, and adjust their plans seamlessly from the gate to the phone.
Policies and Procedures Should Make Sense to Consumers
In radically changing times, your policies and procedures should be pragmatic and understanding of the situation. 2020 was a major socio-economic disruption, and consumers are looking for brands that understand their struggle. Return policies, safety procedures, and overall experiences should accommodate the impact COVID-19 had on every facet of our lives.
Continued Focus on Health and Safety in Public Spaces and Retail Settings
Americans and the world at large have a new appreciation for health and sanitation. While mask mandates are dropping across the country, we are likely to see better management of shared spaces to reduce the spread of disease.
Consumers will likely resonate with brands that keep this focus as the lessons learned from 2020 will linger for some time.
Increased Importance of Home
Between hybrid workforces and increased appreciation of the work/life balance, companies will need to respect consumer and employee desires to accomplish more at home. Retailers and service providers that accommodate this new lifestyle will see benefits across channels.
Post-COVID's Impact on the Customer Experience
The return to ‘normal’ is shaking customer experiences. As we head into summer, businesses across the country struggle to fill job vacancies that were a result of the pandemic. Employment issues in the retail and service industries stem from generous unemployment benefits that incentivize people to take the summer off and a mad rush to return to pre-COVID staffing levels in order to service pent-up consumer demand.
Further, product availability is sparse. Supply chains are recalibrating to the changes in consumer demand, but disruptions are still evident around the globe. These shortages, coupled with broad staffing issues, lead to inefficiencies in stocking and inventory.
For employees that remain on payroll, there is a trickle-down effect that manifests in associate-to-customer interactions. With the end of the pandemic on the horizon, some team members are less stressed and are feeling more positive and energized. Grateful that they are protected, employees are more likely to have positive connections with in-store customers.
Employees who are feeling squeezed and stressed by shortages and a lack of employer support could have the opposite effect, creating friction with customers, just when people need to reconnect.
What should companies be doing to tighten the bond with their customers given the unique emotional needs during these times? Are you trying to connect on a more personal level?
MMR can help understand what customer frustrations may exist, and how customers feel given the different dynamics of the pandemic. We measure the health of your brand’s interaction with customers to understand the actions taken by customers to get around any obstacles, and what expectations customers have for manufacturers and retailers in these troubled times.
How should companies adjust to deal with forced shortages in customer service?
How severe is the supply chain problem, and are competitors addressing it more effectively?
Are product & service experiences with your brand suffering?