Coronavirus has changed consumer behavior — here's what marketers need to do next

CNBC International News

14 May 202005:19

Summary

TLDRThe COVID-19 pandemic has rapidly altered consumer behavior, with anxiety spiking and shopping patterns shifting. Consumer insight firm Kantar and analytics company Bliss have observed these changes through extensive data collection. Initially, panic buying surged, particularly for essentials like toilet paper and pasta. As consumers adapt to the 'new normal,' there's a return to nostalgic purchases and comfort items. Brands are expected to pivot their offerings, like LVMH and Burberry, which have shifted from luxury goods to protective gear and sanitizers. Consumers now seek practical help and staff welfare from companies, and they value brands that contribute positively to the pandemic response. As the crisis evolves, brands must plan for recovery by aligning with their core purpose, providing utility, and rebuilding consumer confidence.

Takeaways

📈 Consumer behavior is rapidly changing due to the COVID-19 pandemic, with spikes in anxiety and concern.
📊 Sentiment monitoring by companies like Kantar shows that after initial panic, consumers begin to adjust and think about the future.
📉 Analytics company Bliss observed significant drops in store footfall, with varying degrees of impact across different countries.
🛒 Consumers exhibited survival instincts, leading to panic buying of essential items like toilet paper and long-life food.
🔄 Stage 2 of consumer behavior showed stability as consumers adapted to the 'new normal', with a return to nostalgic purchases.
🤝 There was a temporary illusion of loyalty, with fewer visits to fewer stores, challenging businesses to retain customers.
📢 Advertising is seen as acceptable by over 90% of consumers, as it provides a sense of normalcy and escape from bleak news.
🔄 Brands like LVMH, Sandro, and Burberry pivoted their offerings to more useful items such as protective clothing and hand sanitizers.
🏥 The primary demand from consumers for brands is to prioritize staff welfare and offer practical help, like mortgage holidays or insurance rebates.
🌟 Millennials, aged 25 to 34, are seeking practical help the most, as they've been impacted quickly by the pandemic's financial effects.
🔮 As we move forward, brands need to pivot again to align with their beliefs and help society rebuild confidence in various aspects of life.

Q & A

What has Cantar observed in terms of consumer sentiment during the COVID-19 pandemic?
-Cantar has noticed a spike in anxiety and concern for the general situation among consumers during the pandemic. As restrictions were imposed, there was an initial adjustment period, after which the level of concern settled back a bit, and people started thinking more about the future.
How does Bliss Analytics describe the initial consumer behavior during the pandemic?
-Bliss Analytics observed a 'panic' stage with significant drops in store footfall, especially in markets without lockdowns like Sweden, and a decrease in grocery shopping in places with eased lockdowns like parts of the US and the UK.
What consumer behavior did Bliss Analytics identify as consumers adapted to the new normal?
-After the initial panic, consumers entered a 'stability' phase where they adapted to the new normal, showing nesting behavior, returning to nostalgic purchases, and buying comfort products.
What changes in consumer behavior did the pandemic bring about in terms of brand loyalty?
-The pandemic led to an illusion of loyalty, with people making fewer visits to fewer stores, which poses a challenge for brands to retain customers as the situation transitions from a health crisis to an economic one.
How have brands like LVMH, Sandro, and Burberry responded to the pandemic?
-These fashion and luxury brands have pivoted their offerings from clothing or cosmetics to more useful items during the pandemic, such as protective clothing or hand sanitizers.
What is the primary expectation consumers have from brands during the pandemic?
-Consumers primarily expect brands to prioritize staff welfare and offer practical help, such as financial services providing mortgage holidays or rebates on insurance.
What does the script suggest about the role of advertising during the pandemic?
-The script suggests that advertising can provide a sense of normalcy and a bit of escape from the bleak news, with over 90% of consumers being okay with brands advertising during the crisis.
How are different age groups affected by the pandemic, and what are their priorities?
-Millennials, aged 25 to 34, have felt the impact on their household finances the fastest and are looking for more practical help. Different groups of consumers are demanding different things from brands.
What are the recommended actions for brands as they navigate through the pandemic and plan for recovery?
-Experts recommend that brands should continue advertising, consider media choices carefully due to changing media consumption, and start planning for recovery by focusing on simplicity, staying true to their purpose, and ensuring their actions are as useful as possible.
What is the key to rebuilding consumer confidence as economies start to reopen?
-Rebuilding confidence involves restoring trust in going out, interacting, and the economy itself, which will be a collective effort over the next few months.
Who ultimately decides the pace at which restrictions are lifted and freedom is utilized?
-While governments may relax restrictions, it is ultimately the public who decides how quickly they use their regained freedom.

Outlines

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📈 Consumer Behavior Shifts During the COVID-19 Pandemic

The script discusses how the COVID-19 pandemic has accelerated changes in consumer behavior, with anxiety and concern peaking as restrictions are imposed. Consumer insight company Cantar has been monitoring these sentiments through interviews with over 25,000 individuals every two weeks. Analytics company Bliss has also observed similar patterns, processing location data from billions of mobile devices to track consumer movements. The initial panic phase saw a significant drop in store footfall, with varying degrees of impact in different countries. As consumers adapted to the 'new normal,' there was a shift towards stability, including a return to nostalgic purchases and comfort products. The script also highlights a temporary illusion of loyalty, with consumers visiting fewer stores but making more purchases per visit. Brands are encouraged to pivot their offerings to meet current needs, such as LVMH and Burberry shifting from luxury goods to protective clothing and sanitizers. The primary expectation from consumers is for brands to prioritize staff welfare and provide practical help, such as mortgage holidays or insurance rebates. The script concludes with recommendations for brands to maintain advertising, plan for recovery, and align their actions with their core purpose to rebuild consumer confidence.

Mindmap

Keywords

💡Couvade 19 pandemic

The term 'Couvade 19 pandemic' seems to be a typographical error and likely refers to the COVID-19 pandemic. It is a global health crisis caused by the novel coronavirus SARS-CoV-2, which has significantly impacted daily life, economies, and consumer behavior. In the context of the video, the pandemic is central to understanding the shifts in consumer sentiment and behavior, as people's anxieties and concerns have spiked, leading to changes in their shopping patterns and lifestyle adjustments.

💡Consumer sentiment

Consumer sentiment refers to the overall attitude and feelings of consumers toward the economy, their financial situation, and their propensity to spend. In the video, the company Cantar monitors consumer sentiment during the pandemic, noting a spike in anxiety and concern among consumers as they adjust to imposed restrictions. This concept is crucial for understanding how businesses and brands should respond to consumer needs and expectations during times of crisis.

💡Analytics company

An analytics company is a business that specializes in the systematic analysis of data to extract useful information, draw conclusions, and support decision-making. In the script, Bliss is mentioned as an analytics company that processes vast amounts of location data to track consumer behavior during the pandemic. Their insights into consumer movements and purchasing patterns are vital for understanding the immediate and long-term effects of the pandemic on consumer habits.

💡Survival instinct

The survival instinct is a fundamental drive that compels individuals to take actions necessary for their survival, often in response to perceived threats. The video describes how, during the pandemic, consumers exhibited a survival instinct by engaging in panic buying of essential items like toilet paper and long-life food. This behavior reflects a broader pattern of consumers responding to crisis by prioritizing immediate needs and security.

💡Nostalgic purchases

Nostalgic purchases are buying decisions driven by a longing for the past or a desire to recapture positive memories. The video mentions that as consumers adapt to the 'new normal,' they may return to nostalgic purchases and comfort products. This trend suggests that during times of uncertainty, consumers may seek solace in familiar brands and products that evoke positive emotions and a sense of stability.

💡Loyalty

In the context of the video, loyalty refers to the faithfulness and allegiance of consumers to particular brands or stores. It is noted that during the pandemic, there was an 'illusion of loyalty' as consumers made fewer visits to fewer stores. This concept is important for understanding consumer behavior during crises, where changes in shopping habits may not necessarily reflect long-term brand loyalty but rather temporary adjustments to new circumstances.

💡Purpose-led advertising

Purpose-led advertising is a marketing approach where brands communicate their values, mission, and the positive impact they aim to have on society. The video suggests that before the pandemic, there was a rise in purpose-led advertising. However, during the crisis, consumers are pushing brands to demonstrate their purpose through concrete actions that align with the current situation, such as pivoting their offerings to meet immediate needs or supporting their staff and communities.

💡Pivot

To pivot in a business context means to change direction or strategy in response to changing circumstances. The video discusses how fashion and luxury brands like LVMH, Sandro, and Burberry have pivoted their offerings from traditional products to more useful items during the pandemic, such as protective clothing or hand sanitizers. This keyword illustrates the adaptability required of businesses to remain relevant and helpful during crises.

💡Staff welfare

Staff welfare refers to the well-being and support provided to employees, which includes fair treatment, a safe working environment, and opportunities for growth. The video emphasizes that consumers are looking for brands to prioritize staff welfare during the pandemic. This expectation reflects a broader societal value that companies should care for their employees, especially during challenging times.

💡Practical help

Practical help refers to tangible support or assistance that addresses immediate needs or problems. In the video, it is mentioned that consumers expect brands to offer practical help, such as financial services companies providing mortgage holidays or insurance rebates. This concept is central to the video's message that, in times of crisis, brands should focus on providing solutions that directly benefit consumers and help them navigate their daily lives.

💡Rebuild confidence

Rebuilding confidence is the process of restoring trust and assurance, particularly in the context of economic and social stability. The video suggests that as the world moves through the pandemic, a collective effort is needed to rebuild confidence in various aspects of life, such as going out, interacting with others, and participating in the economy. This keyword highlights the importance of brands and businesses in contributing to the overall recovery and resilience of society.

Highlights

Consumers are producing a lot of data, and behavior is changing rapidly due to the COVID-19 pandemic.

Cantar interviews over 25,000 people every two weeks to monitor consumer sentiment during restrictions.

There is a spike in anxiety and concern for the general situation as restrictions are imposed.

Concern settles back a little as people start thinking about the future after adjusting to restrictions.

Analytics company Bliss processes 7 terabytes of location data daily from over a quarter of a billion mobile devices worldwide.

Stage one of the pandemic saw panic with significant drops in store footfall in some markets.

In Sweden, grocery shopping is down 20 points compared to normal, while in parts of the US it's down about 50%.

In the UK, grocery footfall is down about 70% compared to February and early March.

A survival instinct led to panic buying of toilet paper and long-life food like pasta.

Stage 2 of consumer behavior saw stability as consumers adapted to the 'new normal'.

Lockdown led to quirky consumer behavior, including an illusion of loyalty with fewer visits to fewer stores.

The challenge for brands is to keep customers as the crisis shifts from health to economic.

Over 90% of consumers are okay with brands advertising during the pandemic.

Advertising can provide a little bit of escape from the bleak news during the pandemic.

Consumers are forcing brands to seek a sense of purpose in their advertising and actions.

Luxury brands like LVMH, Sandro, and Burberry pivoted to offer protective clothing and hand sanitizers.

Some brands, like those in the airline industry, are finding it difficult to find a way to be useful during the pandemic.

Consumers are looking for brands to prioritize staff welfare and offer practical help.

Different groups of consumers are demanding different things, with Millennials seeking more practical help.

Brands need to pivot to align with their beliefs and help society move through the pandemic.

The next phase for brands involves rebuilding consumer confidence in going out, interacting, and the economy.

Experts recommend that brands continue advertising, consider media choices, and plan for recovery.

The public will decide how quickly they use the freedom regained as restrictions are relaxed.