This should be expected: what could be of concern to brands is how much this behavior changes in the long term. An EY study from early July found that 40% of consumers wanted to get back to normal, but half of those surveyed still expected their lives to change significantly in the long-term.
Arguably one of the most significant changes was in the way most people worked. “We’re being forced into the world’s largest work-from-home experiment and, so far, it hasn’t been easy for a lot of organizations to implement,” says Saikat Chatterjee, Senior Director, Advisory at Gartner. According to a Gartner study, 88% of organizations globally encouraged or required employees to work from home, rising to 91% in Asia Pacific.
The big question now, as lockdowns ease and restrictions lift, is whether employees will return to the office. The prevailing wisdom appears to be that they will not; Twitter, Facebook, BP, Schroders, and PWC are just some of the businesses that have announced a shift, in one form or another, to permanent or long-term remote working. This is backed up by a report from Mercer, which said that nearly three-quarters of employers expected a quarter or more of their workforce to continue working remotely post-pandemic.
Staying in is the new going out
The lack of office worker-trade concerns those industries that rely on footfall. Another challenge is the long-term change to broader consumer habits. The Kantar COVID-19 Barometer has been tracking consumer sentiment globally since March – in its latest findings, 32% of respondents had increased their online shopping, rising to 45% in households with children. For many, this has meant trying new retailers and sticking with them; 38% will continue to buy from certain online stores they started to visit during the crisis.
Of course, this extends beyond shopping – media consumption has changed dramatically, too, with anything physical (magazines, newspapers and cinemas) seeing a significant drop, while anything digital is increasing in usage. This shift away from physical products is in line with increased health concerns, as well as issues around access – a Deloitte article in June pointed out that consumer concern for physical health remains high compared to their concerns for financial health.
The rise of value-based decision making
It is not just how consumers are engaging with brands that is changing, but also why. McKinsey, Kantar and EY all highlighted a move to more value-driven decision making. The latter said that 53% of consumers feel the pandemic experience has led to a re-evaluation of their values and how they look at life. McKinsey noted that “consumers have a heightened awareness of how businesses interact with stakeholders, local communities and society more broadly. The actions that businesses take during this pandemic are likely to be remembered long after COVID-19 has been conquered.”
Kantar found that “all over the world, consumers have become much more in favor of products that have been produced locally,” and that there is a greater expectation that brands show leadership. Over a quarter of its respondents want brands to attack the crisis and demonstrate that it can be fought, while in China 43% expect companies to show strength.
What brands need to do
Where does this leave businesses already reeling from the pandemic and needing a return to normality to replenish their revenues? Needing to make their own changes, according to Kristina Rogers, EY Global Consumer Leader. “Organizations will need to work out how to serve a more value-conscious, health-conscious consumer, but also a consumer who demands purposeful brands that reflect their environmental and social values.”
That means building offerings “so that they are relevant to the future consumer, providing digital customer journeys that reflect the way consumers will behave and creating the transparency needed to secure consumer trust.”
What does this look like? While there will be variation from sector to sector, several common themes are running across all consumer-facing industries.
Of paramount importance is the need for accurate, trusted and up-to-date data on how people feel and how they intend to engage with brands. As the reports previously mentioned have shown, consumer sentiment is evolving – as consumers feel safer, they are prepared to go back to activities previously abandoned. Therefore, any brand – whether in retail, financial services, fast-moving consumer goods, travel or hospitality – needs to capture data across all touch-points – online, in-store, customer services – and identify what consumers will respond to.
This all needs to be fed into the level of service people receive to deliver a relevant, positive experience. It is also critical in informing brand innovation, whether that is how a physical location is laid out, how customers engage across on- and offline channels or in the products being pushed out to consumers.
Finally, as previously mentioned, brands need to be aligned with customer values, articulate them appropriately and truly live them. That could mean being able to prove how they operate more ethically, demonstrating a continued commitment to greater sustainability or being conscious to current sensitivities. Again, the ability to capture relevant data and derive actionable insights from that information is critical to informing brand activities in this area.
Battling against complacency
Many brands will feel that they already do that, and certainly none of these points are particularly new. However, COIVD-19 has significantly accelerated their growth and, therefore, their importance. Brands mustn’t become complacent, as Andrew Cosgrove, EY Global Consumer Knowledge Leader, highlighted when discussing the company’s latest Future Consumer Index. He said: “Many businesses believe they already have the right portfolio, marketing and supply chains. However, few are resilient enough to deliver against these heightened consumer expectations. Efficiency is important but must be balanced against the need to keep developing the capabilities that will deliver growth. Businesses now have the opportunity to not just protect what worked in the past, but to actively shape a successful future.”
The pandemic has impacted the relationship between retailers and customers. Discover more about the new consumer purchasing behaviors, and how to blend digital and physical in this webinar, Next Normal: Commerce.