I have interviewed over 100 marketing and consumer & shopper insight leaders (herein insight leaders) from a variety of categories in the fast-moving consumer goods (FMCG) industry since the crisis started.
The goal of this article is to share the insights that are most relevant to marketing and insight leaders as we head into the post-pandemic recessionary world.
One thing stood out more than anything else. The current economic impact of the crisis is a tsunami about to crash our shore in ways we have never seen before.
This situation is much different from what we experienced in 2001 and 2008 and it requires marketers to ask a whole new set of questions, which I’ll share below.
If you would like the full report that has many more insights and ideas from the 100 marketing and consumer/shopper insight leaders interviewed, please send me a note.
The Crisis Will Likely Have 3 Distinct Phases
A common theme across organizations is that senior management has been asking questions more frequently since the crisis started.
1. How long will the pandemic last and how can we help our consumers through it?
2. How will the economic effects impact our category and how can we better communicate value?
3. Which behaviors will revert back to the way they were prior to the crisis and which will endure beyond the crisis and what does this mean for our brand?
These questions indicate that there will be 3 distinct phases to the crisis.
The Pandemic: This first phase came as an intense shock and now that we have adjusted to it for the most part, and society is cautiously opening up, we are moving into the next phase.
The Great Repression: The era we are entering will be a combination of a harsh recession and repression due to a continued restricted reality. It could be further complicated if there are additional infection waves.
A Brave New World: Human beings are resilient and we will find a way through this. Life will not go back to the way it was, but there will be tremendous new advances and opportunities that will unfold just as there were after 2001 and 2008.
Marketers, what do you need to do to ensure that your brands to get their fair share of voice, volume, and market share as we enter Phase 2 – The Great Repression?
A return to the basics and survival over sustainability, in the short-term.
Life was turned upside down over night and immediately human beings found themselves trying to balance a whole new myriad of personal and professional duties.
One leader described it perfectly by saying, “I am trying to work through unprecedented business challenges, while also being a teacher, entertainer, and tech support for Google Classroom.”
In the first few weeks of the crisis, consumers focused on satisfying the lower rungs of Maslow’s hierarchy of needs, prioritizing “safety over sustainability”.
As such they gravitated to brands that elicited emotions of “safety, familiarity, and trustworthiness”.
Brands that were shelf stable, center of the store, primarily positioned to meet at home occasions, and perhaps had advanced e-commerce or delivery services set up prior to the crisis performed extremely well, as shipment and consumption data sky rocketed.
Brands that came into the crisis with strong visual cues and memory structures grew their share as shoppers were limited to quick decisions in a distressed shopping environment.
An example of this was the nostalgic surge in “family classic” brands which opened up trial to new users, specifically younger cohorts.
As one leader stated, “At least for the short-term, there has been a focus on survival over sustainability, and a return to the basics, as consumers are focused on the things that truly matter.”
No matter how good things are for you now, they’re going to get tough, quick.
As we move into Phase 2, and the recessionary period lurks from the shadows, all brands are going to face new pressures.
Overnight, many consumer usage occasions vanished and the majority of brands found themselves in a fierce fight for the few at-home occasions remaining in their category.
As we shift from the pandemic into a recession, several leaders mentioned the work they are doing to assess the headwinds and tailwinds that their categories will face.
Whether or not your brand grew during the pandemic, in Phase 2, no brand will be safe with fewer disposable dollars available and unemployment at historic levels.
As one leader said, “Even brands that find themselves on-trend related to hygiene, sanitation, health, or indoor/backyard entertainment will soon have to deal with many new entrants attracted to their profitable categories, while nimble direct to consumer brands will also be a threat as they are able to capitalize faster on quickly changing consumer needs.”
Now is the time to invest in Shopper Based Design to grow share in retail.
For fast moving consumer goods (FMCG) brands, the first few months saw consumers gravitate to the center of the store, while ignoring end-aisle displays and impulse products at check-out.
In the short-term, this likely won’t change as consumers are herded through one-way aisles and are shopping in a distressed and fearful state.
They will continue to pick brands that reduce the friction, that they implicitly trust, and that make their choice easy. Reinforced distinctive cues and memory structures will rule the day.
What scares leaders most is that many of the shopper based design cues they relied on are gone for now, and maybe forever.
One leader said, “The days of consumers picking up a package, reading claims, or engaging senses other than sight to determine which product to pick in a category are likely gone, at least for the foreseeable future.”
Now more than ever, visual identity and cues will be critical to winning your fair share of attention in these forced autopilot scenarios, so is this the time to do an audit of your shelf to see how well you are positioned in your category?
Here were the other questions marketers were asking about winning at the first moment of truth in-store:
1. How can I help my retailers grow our category while also growing our share when consumers are rushing through one-way aisles in state of distress and angst?
2. How can my visual ID, including distinctive assets, influence shopper perceptions and behavior at shelf, now that consumers won’t be picking up products and evaluating them the way they used to?
3. What is the right design architecture for my portfolio of SKUs to help consumers make quick and informative decisions about our category?
4. How can my brand make up for lost sampling programs, sensory experiences, ineffective aisles, and fewer impulse moments?
5. How can I better communicate value for financially fragile consumers across different shopping contexts (e.g in-store vs. ecomm), retailers (e.g. mass, discount, convenience & gas), and shopper touch points (e.g. portfolio architecture assortment and placement, pack size and format, pricing and POS)?
Online shopping and ecommerce adoption has accelerated by five years.
Obviously brick and mortar shopping is at risk in the years to come which will favor brands that are “effectively and efficiently” marketed online.
One leader referenced a study that suggested that the crisis accelerated ecommerce adoption by five years.
As new behaviors become engrained, marketers cannot afford to be slow to develop their understanding of how consumers behave online.
Unlike our friends in the UK, where over 10% of sales come through ecommerce, many marketers in North America are feeling exposed as ecommerce had only driven 1-2% of total sales leading into the crisis, which means it hasn’t received a lot of attention.
What is really interesting about the crisis is that it has forced consumers that would have never tried ecommerce to do so, especially consumers that were most at risk by leaving their homes.
The question is that experience converted them over the long-term and what can your brand do to position itself to win its fair share if so?
Here were the other questions marketers were asking about winning at the first moment of truth in ecommerce:
1. Has the initial experience on ecommerce for brand new users been smooth enough for them to continuing to do so as we relax restrictions or will they go back to the old way of doing things?
2. How can we better understand consumer behaviors online and in ecommerce to ensure that my packaging imagery and copy are distinctive?
3. How should we be thinking about our current brand portfolio and architecture, as well as size and formats as consumers might be looking for more affordable purchases?
4. How should we be thinking about our innovation pipeline if more and more purchases are happening online and my product might not be seen as easily as it would be in-store?
5. How can I disrupt shopper behavior if I am not already in their auto refill basket during those first few ecommerce shopping trips?
It’s time to experiment with innovative virtually-enabled consumer research.
While most companies that temporarily paused their research have turned the engine back on, we have lost the ability to conduct face-to-face research with our consumers for the foreseeable future.
As one insights leader interviewee said, “We can not afford to stop advancing our understanding of the consumer.”
As a result, insight leaders have experimented with new methodologies like virtual behavioral observation to avoid falling behind with category dynamics quickly shifting.
Successful pilots seemed to combine virtual environment experiments with conscious belief and non-conscious association measurement to observe “what” consumers did, followed by digging deeper to understand “why” they did it.
How might you experiment with innovative new research approaches like virtual behavioral observation to advance your brand and demonstrate innovation to your stakeholders?
Here were a few things to consider about virtual behavioral observation methodologies:
1. When building a virtual behavioral environment like a shelf or a store, it is important to find a partner that can create “realism” so that you are observing behaviors that most represent reality.
2. It is important to remember that no store looks exactly like a planogram with perfectly stocked items that are all front facing and arranged as planned, so instead, work with a partner that can help you create more of a “realogram”.
3. Your environment should account for different variations of light depending on where the products are and adjust for the average height of the consumer depending the global markets you are exploring.
4. Always try to mix in conscious and non-conscious measurement with you behavioral observation to get at both “what” consumers are doing and the “why” they are doing it, so that you understand the underlying motivations of their behavior.
Leaders expressed excitement about the following benefits they experienced from experimenting with virtual behavioral observation as a result of the crisis:
1. A long-term safe and cost effective way of conducting agile research;
2. Deeper cuts of data, including the ability to cut by light buyers, ethnic minorities, or financially fragile consumers; and
3. More agility for iterative testing and scenario planning during the uncertain times ahead.
Seismic, unpredictable shifts have impacted society and as a result have impacted shoppers and consumers dramatically. It feels like the world continues to change daily.
Unfortunately, most marketers have been locked into supply chain meetings, to avoid shorting customers and putting their brands at risk by forcing trial of competitive brands.
As a result, they have not been able to think beyond the next few weeks, but organizations are hungry for proactive and innovative longer-term planning.
If there has ever been a time for the insights function to rise the occasion and have a seat at the table, it is now.
We are fortunate to have access to bright behavioral scientists and a variety of virtual tools that allow us to observe human behavior safely, while also uncovering both explicit beliefs and non-conscious associations.
It is going to continue to be an intense time for all of us both personally and professionally.
But may you find some hope and happiness knowing that…
We are the pilots of the future economy.