COVID-19 has impacted almost all aspects of our lives – from the way we live, work, shop, manage our finances, to even how we connect with our colleagues, neighbors, family and friends.
We are in July, and we do not have medicine, yet. The only fruitful way of dealing with this pandemic so far has been social distancing. Governments across the world, have introduced different levels of restrictions by declaring lockdowns, to ensure social distancing can be practiced. Societies who are doing it right, are already winning the fight – they have managed to plateau the growth, and some have even managed to destroy it.
When it comes to brands, they are fighting with COVID-19 related challenges as well as social distancing induced behavioral changes. While the pandemic is a temporary one, it will possibly leave a long-lasting effect on the way we live. In some of the areas, the change could be permanent.
Let’s look at some of the trends, where we are already witnessing a big shift:
I. Surge in Online Shopping
Online channels have never been so important. To practice the stay-at-home mandate, for a lot of consumers, online portals have become the primary shopping channel. The convenience of online shopping has enabled consumers to consider online buying in much broader categories – a lot of first-time buyers who only bought essentials online earlier, are now buying other categories. In a first, consumers are looking beyond the price tags and steep discounts while buying online, as availability, safety and convenience have become the driving force. While stores continue to remain shut – either due to lockdown restrictions or for financial liquidity issues, consumers have been buying online and their appetite has been on the rise. For the top consumer brands in India, the share of online sales has doubled during this phase.
As per the recently published report by Capgemini Research Institute, 59% of consumers worldwide said they had high levels of interaction with physical stores before COVID-19, but today their share has dropped to 24%. On the other hand, 30% of consumers say that they had high levels of interaction with online channels before the crisis, but 37% would characterize themselves in that light today. In the coming months, this number is only expected to increase further.
II. Rapid Adoption of Remote Working
As the government imposed lockdowns, and people started practicing stay-at-home, a lot of businesses embraced the work from home culture. For many mid-tier and risk-prone industries, this was a first, but most of them had to make the move as an immediate crisis response. Even as the restrictions are being eased, companies across the globe are coming up with policy decisions which will outlast the pandemic.
Globally, companies such as Google, Microsoft, Morgan Stanley, JPMorgan, Capital One, Zillow, Slack, Amazon, PayPal and Salesforce have extended their work-from-home options. Twitter, Facebook, Square, Shopify, Coinbase, Upwork, Lambda Schools and other digital-first companies are encouraging employees to consider working from home permanently.
In India, as per a research by Knight Frank, more than 70% of companies are likely to continue the work-from-home policy for a percentage of their total staff for the next six months to maintain social distancing and for business continuity. In a first, one of the leading FMCG brands in the country, CavinKare has put its office space on rent and has asked its employees to work from home permanently. Similarly, companies like Zomato and IndusInd Bank have also decided to make remote work a permanent feature to ease up on the real estate costs. A lot of companies are expected to follow this route to make up for the loss of business during this pandemic.
When it comes to the Indian IT industry, one of the largest employment contributor; about 90% of employees worked from home with 65% of them from homes in metros and rest 35% from homes in small towns during the lockdown. It is the success achieved during this lockdown; that leading companies in the sector have announced plans to make work from home a permanent way of working for majority of employees in the coming years.
III. Digitalization of Traditional Education
While virtual courses and MOOCs have been around for years, it took a pandemic for leading educational institutes to take their classes online. Schools have been shut for more than 5 months now, but education has continued through various digital platforms. Zoom, Microsoft Teams, Google Hangout, Google Classroom and such others have witnessed a huge uptake in the last few months. In India, this has increased the sales of laptops, desktops and mobile phones as educational institutes will remain shut for a few more months. Globally, Harvard and other elite schools such as Princeton University, Rutgers University and Yale University have announced that all their course for this fall will be offered online. Even large organizations have moved all the Learning & Development initiatives online, and have started using state-of-the-art tools for promoting collaborative learning. Leading EdTech startups have used the pandemic to experiment with their business model to attract more students. The fact that, other than healthcare, education has been the only other sector to attract massive investments even during the pandemic, shows that many investors believe in the future of online education.
IV. Increase in Internet Consumption
As consumers are working from home, doing their shopping online and even the kids are learning online, the overall digital footprint is on the rise. Other than that, consumers are also spending more time on social media. As per Kantar’s recently concluded research which studied 25,000 consumers across 30 markets showed social media engagement has increased by 61% over normal usage rates, while web browsing increased by 70%. Messaging across Facebook, Instagram and WhatsApp have increased by 50% in countries hardest hit by the virus. Twitter is seeing 23% more daily users than a year ago.
Closer home in India, as per another report, about 11% of basic data users upgraded their existing data packs; while almost 33% of respondents upgraded broadband plans for higher data packages. A whopping 90% of the respondents said they were spending more time on content streaming, e-learning, infotainment and social media.
What does this mean for BRANDS?
To begin with, brands should first and foremost accept that they don’t know their consumers anymore. What we are witnessing today is nothing gradual, but a seismic shift. Some behaviors would be changed permanently, and hence would have long-lasting effects on consumer traits. The traditional methods of market research of in-person and focus group interviews have become a challenge in the COVID-19 impacted world where social distancing is the norm. This has already lead to market research projects getting on hold or stopped. Hence it is important to consider shifting some of these efforts towards making sense of the increasing flow of data from the exhaustive digital footprint.
With this context, here’s how brands should consider prioritizing their strategy:
- Improve Customer Experience
Already battling the pandemic, broken customer experience is the last thing a brand would like to be associated with. Since time or pricing being the secondary constraints, customers are looking for frictionless experience which is convenient and just works. Assessing their digital maturity to deliver this experience can be a good starting point for many brands.
- Leverage Customer Insights
From word-of-mouth to curiosity and questions, everything has moved online. Making sense of social media chatter, search trends, online reviews, conversations on blogs and forums, can help brands understand customer expectations. Most importantly, it can help brands understand how customer behaviors and preferences have changed owing to COVID-19.
- Be Purpose Driven
Purpose is an organization’s “raison d’etre,” or its reason for existence that goes beyond profit. A recently concluded survey by Capgemini Research Institute reveals that more than half of the consumers expect organizations to showcase their sense of purpose and give back to society – both during the crisis and beyond.
- Embrace Omnichannel
Customers expect convenience, delivery reassurance and flexibility. We have witnessed a lot of brands launch their own ecommerce portals as a quick reaction to deal with the lockdown for reaching out to customers directly. It will be important for brands to align online services with their traditional business model to provide fluid experience to the customers as well as ensure resilient supply chain.
- Invest in Data-Driven Marketing
Instead of knee-jerk reaction of slashing the marketing spends, brands need to make data-based decisions by re-assessing their business goals. Focus on increasing the marketing ROI by leveraging customer insights and their evolved digital footprints.
- Engage Your Customers
They are online, have access and are eager to spend time with the brands who can have honest conversations and win hearts and minds. By leveraging their existing social media network, mobile apps and augmenting it with AR/VR, brands can up the game to provide innovative and personalized customer engagement.
For brands taking the very first step for rebooting their strategy, my earlier blog, can be a good starting point. If this post interests you or if you would like to know more about our services in relation to the above post, please feel free to get in touch.