Investigating the consumer impact of COVID

It’s no secret that COVID has changed the complexity of life, and along with it, consumer behavior. The unpredictable nature of the illness as well as the ever-changing restrictions that are implemented to address it are continually shifting attitudes and activities and forcing brands to evolve engagements and experiences. This evolution process requires insight and foresight into these consumer shifts and customer changes so brands can keep pace.

McKinsey & Company has been tracking a multitude of consumer behavior dimensions to illustrate these changes and the critical need to measure and understand the market shifts that are specifically impacting individual businesses. McKinsey released a report called The great consumer shift, which reviews a series of consumer elements that are changing amid today’s complex markets. Many of these evolution points have been on track prior to the outbreak of COVID, however the pandemic has served as a catalyst to accelerate their emergence and adoption.

McKinsey has found several major changes from their surveys including a massive migration to online purchasing, a shock to customer loyalty and need for hygiene transparency to name a few. Brands have to address these emerging issues in real-time in order to align their engagements to effectively motivate consumer behaviors and capture customer loyalty.

Driving Digital

The need for social distancing along with isolation orders have forced most consumers to modify their shopping behaviors to adhere accordingly. While online purchasing has been steadily increasing on a consistent basis, COVIS has rounded out this process in many markets. McKinsey reports that fundamental items including groceries, over-the-counter medications, household supplies and personal care items are seeing a 35+ percent increase in online purchases.

However, understanding the move to digital is only half the battle, since businesses must understand how their customers and prospects are engaging online in terms of channel, frequency, volume and the role shipping plays in their behavior. There is also a need to understand the demographics tied to this migration along with their sentiments in this movement in order to understand their issues, concerns and needs so the brand can effectively address them.

Lacking Loyalty

While customer loyalty was widely seeing steady increases for many businesses prior to COVID, this has largely changed. An incredible 75 percent of US consumers are trying new shopping behaviors in response to COVID ramifications, including shifting priorities, store closings and economic pressures. In many cases this has shocked brand loyalty with McKinsey reporting 36 percent of consumers trying new brands and 73 percent intending to continue to incorporate new brands into their shopping routines. 

There has also been an increasing shift to established, trusted brands. These are seeing upwards of 50 percent growth during the pandemic. Private labels are also outpacing the retail market. It’s also reported that upwards of 80 percent of customers indicate they will continue to use private label products once COVID subsides.

While these are overarching findings, an increasing number of businesses are turning to data-driven research and insights to understand the ensuing degree and impact these types of migrations are having on their specific products and brands.

Predictable Performance

While it is critical for each individual brand to have an ongoing view into their customer base and the shifting attitudes, behaviors and preferences, shoppers indicate that brand switching is largely related to product availability, experience convenience and overall value. This is why understanding consumer changes in real time is so critical.

As McKinsey states, “For Marketers, this highlights the need to quickly become aware of when shoppers are migrating brands or retailers and then to manage the logistics to ensure product and service availability.” The need goes well beyond simple product availability though, and requires a similar approach in channel experience, ease of purchase and customer support, among other dimensions. All of which are components to the larger value perception of the brand. Delivering on this consistently is a major aspect in fueling the customer loyalty engine.

Valuing Value

Given the state of today, consumers are largely focused on value, particularly for those essential product categories, but along discretionary lines. To deliver on this while building loyalty, brands have to understand the shifting needs of their customers in order to align the value they deliver with efficacy. Americans are largely spending time at home, so knowling how they engage and consume in this environment, particularly related to your specific offerings, is critical. 

This is why leveraging existing digital data streams across the organization’s technology stack has never been more important. However it’s also critical to invest in outside market research perspectives to have a clear view of markets, industries and competitors. While this is seemingly complex and daunting the good news is that the insight largely already exists and simply needs to be identified and leveraged.

John Sevec serves as Senior Vice President of Client Services for mTab and advises an array of premier global brands on their market research initiatives and insight strategies. Learn more here.