CPG & Retail: How COVID-19 has accelerated the shift to emotional loyalty

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While it may seem counterintuitive, the shift to digital during COVID-19 has actually raised consumer expectations in terms of personalization.

For the past several years, brand loyalty within the consumer products and retail industries has evolved—from standard, transactional programs to emotional campaigns organized around concepts like health, safety and shared values. In many ways, COVID-19 has accelerated these trends by placing new emphasis on consumer engagement, solving societal problems and finding purpose

Here we take a look at three ways COVID-19 has stimulated loyalty trends—and what brands can do to create deeper, more emotional connections with the people that they serve.

Trend 1: The importance of innovative engagement.

While it may seem counterintuitive, the shift to digital during COVID-19 has actually raised consumer expectations in terms of personalization. People have little patience for brands that don’t know who they are, what they need and how they prefer to be served. In this landscape, consumers are gravitating towards companies that demonstrate how well they understand the consumer as an individual and create innovative ways of engaging them.

For example, Nike is engaging its consumers through its premium fitness app, Nike Training Club, which streams training programs and offers professional tips from instructors. The brand reports that during the first week of U.S. store closures, nearly 170,000 guests joined live classes—a point that translated into value for the brand. Nike’s quarterly earnings indicate that a spike in app engagement contributed to higher online sales.

Trend 2: Solving problems vs. selling products.

The pandemic has disrupted everyday life for billions of people around the world. In this landscape, people aren’t just shopping for products—they are looking for solutions. Brands that serve a purpose are the ones that will stand out and ultimately win the consumer.

A special edition of the Edelman Trust Barometer, a global survey of 12,000 consumers, reinforces this point with nearly two-thirds reporting that brands should play a “critical role” in helping their country through this crisis. We’ve seen this concept play out in recent months with brands like Rag & Bone selling face masks, which were in short supply in cities around the U.S. The brand donated $5 from every sale, raising more than $350,000 to date, which was donated to organizations like Campaign Zero and City Harvest.

Trend 3: Brands must display their social values.

In light of COVID-19, people are hyper-focused on creating a more productive, fair and just world. Recent research released by Capgemini reveals that more than half of the consumers expect organizations to showcase their sense of purpose both during the crisis and beyond. Perhaps more importantly, analysis shows that brands that demonstrate purpose grow at twice the rate of others. The Edelman Trust Barometer confirms this point with one in three respondents said they had already stopped using a brand that was not acting appropriately in response to COVID. Brands need to connect with consumer motivations and beliefs at a human level-by addressing them as citizens first before they address them as consumers.

Commitment to social values can take many forms: supporting employees facing financial hardship, serving at-risk portions of the population, creating assistance programs for suppliers or through community donations. For example, Unilever pledged €500M in cashflow relief to support small- and medium-sized suppliers. BrewDog, a multinational brewery and pub chain, used vans normally dedicated for product delivery to instead deliver hand sanitizer and meals to rural areas.

Brands operating in this landscape must remember that every consumer interaction elicits an emotion. And in times of stress, feelings and reactions can be amplified—which is why it’s so important for brands to consider not just how to meet the consumer’s rational needs but reach them on an emotional level. In our next post, we’ll explore how brands can drive this emotional connection through personalization, relevance and authenticity.

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