Over the last few months, consumers around the world have been forced to change their daily routine and spending habits developed over the years, or even a lifetime. From shopping frequency to favourite labels and supermarkets, Covid-19 forced consumers to re-evaluate and re-prioritize spend.
It’s not the first time in modern history when consumers are forced to tighten their belt due to an economic crisis. We all remember the 2008 recession and the astounding impact it had on the livelihoods of many. Whilst the 2020 global pandemic didn’t start as a financial crisis and its implications reach much wider, there are similarities in changes to consumer behaviour which shouldn’t be ignored. In this post, we focus on shopping and the need for brands to redefine the value of their products.
The topic is as complex as consumer behaviour itself, given that value means something different to every consumer segment. How should brands tackle this? Appearing opportunistic is easily done when navigating a crisis. How to steer away from a tone-deaf marketing and provide consumers with information and products they need?
Understand what value means for your strategic audience segments
There are assumptions a brand can safely make when it comes to the message of value. It’s a mixture of quality and affordability, a robust set of starting pricing points within each category. However, this becomes less clear when the question of value is looked at in the context of various consumer segments, markets and demographics.
Those suffering a hard financial blow might focus on private-label brands and base their choices solely on the monetary value of a product. The single fact they can afford it without breaking the bank is what drives their decision as they browse (online) supermarket shelves.
For consumers less affected by financial implications, value might mean fulfillment or even luxury. In the absence of frequent opportunities to dine out due to the safety concerns associated with visiting a restaurant, some consumers might prioritize products which, in one way or another, substitute experiences currently unavailable. Highlighting the premiumness of a product or the ready-made aspect of it are likely to resonate with this audience more. Ironically, even though premiumness comes with a higher price tag, when compared to dining out, it’s still an offer of perceived value and savings.
This forces brands to address this tension and the two, very conflicting, types of demand. Clarifying positioning and targeting based on current needs, even if they’re short to mid-term.
Coming away from purely financial motivations, value can also equal purpose. Before the Covid-19 outbreak, 65% of consumers globally were willing to pay more for sustainable products. This sentiment didn’t disappear during the pandemic. As confirmed by the sheer volume of social media conversations focusing on the topic of environmental impact, purpose-led brands continue to be in demand. From highlighting responsible sourcing and recyclable packaging to bold actions, claims and promises, brands can resonate with their consumers through the greater good messaging.
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Put local communities first
The impact of the outbreak differs from country to country, and so should the brand's messaging when it comes to highlighting value in the post-Covid reality. One of the trends championed by consumers from the very beginning of the pandemic is supporting local communities and businesses. In a similar spirit, brands should recognize the unique requirements and demands of audiences in key locations, and adjust their messaging accordingly.
Where lockdown restrictions have been eased a while ago or the economy hasn’t suffered as much, consumers might be more open to messages of exploration or new flavours. Value, for them, might mean a comeback to their shopping routine from before the lockdown. Where lockdown restrictions are still severe or the concerns for health and safety haven’t been well addressed by local governments, consumers might want to seek further alternatives to traditional ways of shopping, including online. Through exploration of the direct to consumer solutions, brands have an opportunity to offer value not just through messages but actions. Subscription boxes and services have been gaining popularity and they’re not reserved for artisan and specialty products anymore. Tailoring this with localized messages and product availability helps to differentiate and demonstrate real understanding of consumer circumstances.
Supporting local communities is another way to demonstrate value, particularly for consumers concerned about the welfare and wellbeing of their immediate surroundings. Partnerships might help brands spread the message and not lose authenticity in the process.
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Understand who your (new) competition is
The pandemic changed the way people shop and explore products available on the market. Some took the lockdown as an opportunity to try new hobbies and learn new skills. This hunger for change means consumers are also more likely to explore options available, compare benefits and, increasingly, give small and upcoming market players a chance. Every brand will attempt to seize the opportunity and demonstrate value in light of months of restrictions and rules which would have potentially completely changed consumption and spending habits.
Whilst an opportunity for the upcoming brands and smaller market players, this is also a call for the industry giants. For many, value at times of uncertainty, is reassurance and defaulting to “tried and tested” family favourites.
Regardless, understanding what competitor brands are doing and how they address specific target groups, allows for differentiation and identification of unique ways to communicate value not seen before. Taking this one step further and ensuring competitive insight is enriched by consumer voice and reactions to what’s been done by others speeds up the testing and learning process.
Communicate in accordance with needs and context
There is no way of telling whether the shifts in consumer behaviour driven by the pandemic are likely to be long term. Regardless, an agile and modern brand must be able to recognize the changes as they happen, in real-time, and adjust messaging accordingly.
For communities of parents with children at school age, value is likely to be associated with benefits applying to their children whose education has been heavily affected by Covid-19. Going beyond what parents are used to hearing - from health benefits to natural food substitutes, and addressing timely parental concerns is how some brands decided to add value.
M&Ms connected with parents and children on a very different level - education. The brand understood the needs of both children and parents affected by the lockdown and homeschooling, and started to encourage participation in their art challenges. The chocolate snacks have been used in the past to versatile the learning process but their current campaign speaks directly to the needs expressed by its target audience right now. The authenticity is boosted by the brand’s corresponding Graduation product offers.
Consumer insights at the heart of value communication strategy
Consumer data and insights which drive business decisions are what’s needed to successfully navigate the post-Covid reality, and beyond. In the wake of the crisis, many brands decided to accelerate their plans for consumer centricity, and upgrade outdated technology where old data can quickly become obsolete and irrelevant.
As people adjust, what they need is likely to change too. Some of these shifts will happen quickly, some might be an evolution rather than a drastic move - in both circumstances, brands must be able to respond. Communicating value in a way that’s unique, targeted and circumstantial improves perception significantly. Taking generic knowledge and turning it into community-oriented insights gives the edge some have lost trying to navigate the convoluted world of communications in crisis. Ironically, it’s the consistent and ongoing data that’s needed, not a one-off and ad-hoc approach.