RECALIBRATING LIFE: THE POST-LOCKDOWN CONSUMER
In several countries around the world, consumers are coming out of lockdowns. However, even in these supposedly ‘back-to-normal’ markets, consumers aren’t behaving in quite the same way as before the pandemic. In certain important ways, consumer interests, shopping behaviours and preferences have altered significantly, offering savvy businesses new tracts of opportunity in 2022.
While the true impact of the pandemic will take years to determine, our analysis indicates that these discernable attitudinal and behavioural changes can be categorised into four main trends, each of which will have an impact on marketing strategies over 2022.
1. HOME TETHERED
Forced to stay in for months, consumers have grown more connected to their homes. They are moving further out of cities in some cases, investing in home improvements and making more meals at home, with Google seeing searches for ideas on home design, kitchens and bathrooms rise sharply.
The grave implications of the pandemic have reoriented consumer mindsets more towards social issues. In Brazil, social initiatives from retailer Magazine Luisa and cosmetics brand Natura & Co. resulted in immediate increases in Google searches, Instagram followers and stock prices.
3. WELLNESS PRIORITISED
A dramatically increased focus on medical issues has resulted in consumers being more oriented towards both physical health as well as mental wellness. GWI research has found that 31% of consumers are concerned about their mental health following lockdowns.
4. DIGITAL ACCELERATED
Lockdowns significantly accelerated a shift towards e-commerce, also complicating customer journeys. Mastercard estimates that e-commerce made up roughly $1 out of every $5 spent on retail in 2020, up from $1 out of every $7 in 2019; while Facebook found that four in ten consumers were buying things online that they used to in-store.
Businesses that understand the ramifications for their brands can develop effective strategies to benefit from any resulting market disruption.
BENEFITTING FROM ADAPTED BEHAVIOURS
Consumer marketing is not being reinvented. But it is being challenged by a series of significant attitudinal and behavioural shifts. Marketers need to identify how these shifts are going to affect their brands, and respond accordingly.
KEY STEPIC DRIVERS
POLICY Lockdown rules over the past 18 months are the primary driver for changes in consumer behaviour.
SOCIETY Concerns about COVID have also driven significant changes both in consumer mindsets and behaviour.
ECONOMY Fear of recession and impact on income and job security have further accelerated behavioural changes.
INDUSTRY Brands and retailers have responded to lockdowns by facilitating digital transactions and new behaviours.
All that time at home has changed consumer mindsets in a number of ways:
Paradoxically, consumers want to spend even more time at home, investing in home and kitchen improvements and cooking more. Hybrid working is also attracting interest in larger homes further outside cities. However, working from home is an option primarily for a higher income minority: ONS research found that COVID has had no impact on the commute for 50% of workers.
FALLING FREQUENCY Still, consumers are going out less. Kantar research found consumers are shopping for groceries less often, but buying more per trip. This also appears true of other activities, such as socialising and spontaneous outings. Brands should consider larger product units and packaging to cater for reduced shopping frequency.
STAYING LOCAL A third of consumers who have returned to work are spending more in their local area than they were before lockdown. Brands should explore the possibility of a better distributed presence on local high streets and suburbs, depending on their category.
Accenture research found 50% of consumers are now rethinking their personal purpose, what’s important in life, and feeling more altruistic. This will affect:
Research from GWI found that a brand’s support for people during the pandemic and eco credentials both ranked higher than product quality and affordable pricing for the first time. Supporting social causes was another important requirement.
LOCAL FOCUS With more time spent at home, regional and local issues are expected to gain more significance for consumers. This could be an important opportunity for both brands and retailers with a neighborhood presence.
VALUE DRIVEN Despite the increase in household savings, consumers are concerned about their financial future. They are increasingly basing purchase decisions on product value. Brands that can convince consumers that they are offering the most value, both financial and personal, will benefit in 2022.
Consumers worldwide were on the lookout for immunity-boosting vitamins and supplements, healthier eating options and improving general health. Wellness concerns are driving the following trends:
Stress reduction activities such as yoga, herbal remedies and meditation are gaining popularity. While not all brands can effectively target specific healthcare issues, they can empathise with this mindset, find ways to simplify a customer's life, and communicate positivity.
HYBRID HEALTHCARE The COVID-driven transition to digital has also accelerated telehealth adoption, though the future will likely be hybrid: virtual care will be used as a triage tool, and for some specialities; while others will require in-person visits. Customer journeys mapped for health and fitness related products will need to support these behaviours.
E-commerce adoption has grown exponentially in the past two years, which is already having a profound impact on marketing strategies.
Waitrose found that the percentage of its customers aged 55+ who bought groceries online, grew from 8% to 23% over one year. It’s important that brands and retailers design digital customer experiences suitable for varying consumer segments.
ONLINE PREFERRED Almost half of consumers who are shopping online for the first time because of the pandemic prefer e-commerce to brick-and-mortar stores. Brands need to pivot strategies to cater to a previously non-digital consumer base that now prefers the digital channel.
MULTICHANNEL JOURNEYS McKinsey found that 33% of Indian adults, 26% of American adults and 16% of French and Spanish adults liked buying online and picking up in store. Gen Z, in particular, like combining digital and in-store experiences.
DISCOVERY REVAMPED While consumers may perceive established brands as having safer production and distribution practices, newer brands are also finding opportunities as discovery channels are changing: 73% of growth in retail-based searches were on new or rarely searched terms and smartphone purchases grew in four out of five retail categories. Brands must ensure they are present on these adapted customer journeys.
ANY RECOVERY IS CONTINGENT ON VACCINES AND THEIR EFFECTIVENESS
Our base case scenario for this report anticipates the opening up of most economies in 2022. A critical requirement will be the rollout of vaccines and their continued effectiveness against any new variants.
Consumer spending will depend on a sense of personal, financial and social safety. GWI data shows that concerns about new variants driving further lockdowns track with vaccination rollouts. With much higher vaccination levels, Europeans are considerably more confident than Indians or Brazilians, and so more likely will go out and spend.
This also extends to sentiments around personal finances. In mid-2020, when Europe was reeling from the pandemic, optimism was considerably higher in APAC. Now, the roles are reversed due to the difference in vaccination rates.
Vaccinations underpin consumer optimism
But the speed of vaccination rollouts worldwide and their effectiveness will determine the speed and stability of the global economic recovery
Source: GWI Zeitgeist August 2021 10,903 internet users aged 16-64 in 8 markets | Mathieu, E., Ritchie, H., Ortiz-Ospina, E. et al. A global database of COVID-19 vaccinations. Nature Human Behaviour (2021)
Q: How concerned are you about the COVID-10 variants, if at all?
MARKETERS RECOGNISE THE CONSUMER IMPACT OF COVID
Seventy-three percent of brand owners in WARC's industry survey felt changes in consumer behaviours would have a significant impact on strategies for 2022. Another 24% felt these changes would have at least some impact – totalling 97% of all respondents.
Brand owners see accelerating digital transformation to reach customers across channels (69%), rethinking the channel mix for consumer communication (66%) and reviewing brand communication and positioning to address new post-COVID consumer mindsets (58%) as the top challenges following COVID.
Emphasising digital channels (61%) was the single most likely response to COVID, while improving the customer experience (54%) ranked as the most important digital transformation priority.
Q: How important are each of the following societal topics and consumer concerns to the development of your 2022 marketing strategy?
DIARI: A JOURNEY ACROSS TUNISIA
AGENCY FP7 McCann Tunisia; FP7 McCann Dubai
Couscous brand, Diari, celebrated the lifting of lockdowns with an uplifting branded-content documentary series in Tunisia.
A Journey across Tunisia showed Tunisians coming together, with rich travel content and couscous recipes utilised in video, social media and a recipe book.
Rather than focus on Diari’s 40-year history, the campaign addressed key elements of the post-lockdown consumer mindset. It offered positive images of families, focused around cooking and sharing traditional recipes in 20 key Tunisian locations. Diari also created a couscous recipe book, and chose to give the proceeds to the families who participated in the documentary.
The campaign also used digital channels effectively, launching the campaign on TV but using micro-influencers to amplify the content on social media. This proved effective in engaging the target audience of younger, progressive Tunisian mothers.
- Instagram engagement increased by 20%.
- There was a 5.86% increase in Facebook engagement which is 10x Tunisian industry average.
- Market share increased by 14%.
- Diari regained the number one position in the market following the campaign.
- While not every brand has a mental wellness story to tell, addressing consumer sensitivities and finding positive stories will likely land well in these times.
- Increased localism in general (as evidenced by interest in Tunisian locations in this case), is an important trend that marketers can cater towards.
- With consumers increasingly demanding purpose, brands that can demonstrate altruism in some form can improve marketing effectiveness.
THE CMO VIEW
"The big lesson, I think, has been around strengthening our digital presence: investing behind that to be there when people need it the most, and also using the physical presence to provide the extra depth of interaction and a level of customer experience that I think only an in-store [environment] can really offer."
PETE MARKEY CMO, Boots
"Every business out there has elaborate plans around digitalisation, digital automation, digital self service, etc. What COVID did is it accelerated a lot of those plans and ambitions that we had pencilled in."
BERNICE SAMUELS CMO, MTN Group
"The COVID crisis has dialled up the importance of marketing with compassion and empathy. While it’s essential that as marketers we sell products or experiences, we absolutely need to ensure that we are mindful of how we connect our brand with communities and how our messaging drives a greater good."
NAYSLA EDWARDS Vice President Brand, Charge Cards and Member Experience, American Express, ANZ
SHIFTS IN CONSUMER BEHAVIOUR WILL VARY IN INTENSITY ACROSS CATEGORIES AND SEGMENTS
Brands will need to accept that their customers are changing and understand how these broader trends are affecting different segments across their customer base. They need to identify where on this new spectrum they are, so they can adjust their marketing strategies correspondingly.
LOCKDOWNS HAVE DRIVEN MORE SERIOUS MINDSETS, WHICH ARE MANIFESTING IN MULTIPLE WAYS
Issues such as brand purpose and transparency around employee care and environmental practices will become more important. In particular, consumers are spending more time at home and becoming more concerned about their local environment. Personal and family health and wellness are also being prioritised. Brands that can address these new needs will benefit in 2022.
THERE IS A DRAMATIC INCREASE IN DIGITAL CHANNELS BUT ALSO SHIFTS IN THE DEMOGRAPHIC SEGMENTS THAT ARE COMING ONLINE
Plus, consumers are now switching between digital and in-store channels at all stages of the purchase process. Brands need to architect support for a variety of customer journeys across channels, creating a customer experience that offers flexible but consistent support for a wide range of digital skill sets and mindsets.