The ongoing COVID-19 pandemic has forced many of us to alter our purchase patterns. All of a sudden, consumers do not make purchase decisions the same ways they used to. According to McKinsey’s report, Global surveys of consumer sentiment during the coronavirus crisis, the epidemic has shifted consuming habits, changed consumption patterns, and transformed spending priorities. More people are stretching dollars. The way consumers view brands is very different from the way they did in 2019. The world-wide lockdown has dramatically impacted the demand and distribution of products and services. Although economies are beginning to reopen, consumers are still feeling the impact of the pandemic due to the reduction in income that accompanied the crisis.
Research from countries the pandemic affected earliest, such as China and Korea, found that consumers are less likely to interact with non-essential products. One of the most affected categories is fashion and apparel. Brands like J.Crew, Neiman Marcus, John Varvatos, True Religion, J.C. Penny, and more either closed or went bankrupt during the lockdown. The reasons are complicated, not only involving pre-existing financial conditions but also decreasing brand value and loss of client connections. Businesses are shifting gears to focus on online retail and curbside pickup, but the question remains: what can brands do to hasten the return to business as usual?
1 - Ready for an inside out change: digital transformation
When one evaluates the current consumer trends, it becomes clear that staple products and home-bound entertainment have jumped to the forefront of consumer spending. With people staying indoors and many businesses supporting the work-from-home initiative, the majority of retail transactions are being facilitated online. As noted in Bynder’s State of Branding Report, these statistics suggest that most teams have transitioned to remote work more smoothly than many would assume. This indicates a shift from the office teamwork model to a remote teamwork model.
The major profiteers during the present health crisis are e-commerce websites, healthcare products, and service providers, and supply chain delivery businesses. On the other hand, the primary losers are the luxury goods businesses and the tourism industry. For instance, restaurants
are getting more innovative in value creation by ensuring that customers have more access during this period. By improving on their supply chain services, they have shifted the focus to pickups and delivery as opposed to the traditional eat-in services that they are known for.
2 - Caring friendship over purchasing loyalty
It remains unknown if consumers are still going to keep playing the brand loyalty game. Human beings are cognitive misers by nature, and they will surely rationalize their purchasing decisions. Brands may soon realize that what they erroneously termed as customer loyalty is nothing more than habitual purchasing. True loyalty is absent in the face of the economic crank. For this reason, it becomes necessary for brands to engage in alternate business strategies that will allow them to keep their customer base. This can be achieved by offering equivalent value at lower prices. Organizations need to understand that the present situation does not support profitability; instead, the business objective now should tend towards long term survival.
3 - Shifting to content creation + educational business models
Going forward, marketing strategies should focus more on digital media, as outdoor advertising increasingly becomes a fund-wasting endeavor. Effective brand strategies should be driven towards delivering quality to customers if businesses want to experience repeat purchases. Marketing teams need to go back to the drawing board to identify the additional benefits
that they may offer across the traditional P’s of marketing to achieve better results. Rather than embarking on promotions, brands are changing the communication scope to education, sharing up-to-date information with customers on the reason they should purchase particular products or services.
What matters for now for any brand is survival and adaptation.
Thus, to stay connected to customers during this health crisis period, businesses need to adopt measures that will position their brands strongly in the minds of consumers. They need to respond to the needs of consumers by reshaping their market plans to accommodate the emerging changes in demand. It is essential to reset your business model by redefining relationships with customers while also rethinking your various portfolios. Lastly, you should start thinking of which strategies will ensure that your business survives this pandemic rather than looking for super-normal profits in the short term.