There’s no denying that COVID-19 has led to a monumental economic downturn. Throughout a downturn, almost all consumers re-evaluate their consumption priorities. Research from the Board of Innovation explains how our economy is being shaped by new habits and regulations based on decreased contact and stricter travel and hygiene restrictions.
These new habits and regulations are different from previous recessions, however, with digital experiences largely replacing in-person experiences. This has led to a unique recession pattern: the need for greater digital marketing expenditure as opposed to marketing cuts.
Harvard Business Review research looks at the psychology behind changing consumer behaviour during a recession, and states that: “Companies that put customer needs under the microscope, take a scalpel rather than a cleaver to the marketing budget, and nimbly adjust strategies, tactics, and product offerings in response to shifting demand are more likely than others to flourish both during and after a recession.”
Zooming in on this, Kantar’s South African Covid-19 Barometer study found that only 2% of South African respondents felt marketing should stop. Instead, brands must be more empathetic to ensure their messaging offers comfort and security in these testing times by being more authentic, reassuring, and practical in their communications rather just pushing sales.
Furthermore, self-isolation has led to increased digital and broadcast media as well as increased presence on social networks, with a rise of 43% in Facebook use and 45% in WhatsApp use. Thus, with more South Africans scrolling, there is more room than ever before to focus on the empathy of your brand’s marketing and to target your consumer’s changing needs.
These new consumer behaviour adaptations are, among other factors, a result of damaged trust in the hygiene of people and products. Kantar’s South African Covid-19 Barometer study clearly displays this new fear-based change in consumer habits, as 73% of local consumers now prefer to shop near home, 66% prefer electronic payments over cash notes, and 63% are sticking to brands they know and love.
As a result, brands are re-designing their packaging due to the evolved preference of science-focused products over ‘natural’ products, individuals are sharing their personal health records and temperature, retail and hospitality industries are incorporating free service add-ons focused on cleanliness, and companies have incorporated new contact-free deliveries and drop-offs.
One of our Yellow Door clients, and arguably Cape Town’s most popular fish retailer and wholesaler, Cape Fish, adjusted to meet these rapidly changing needs by ramping up their already strict personal hygiene, cleaning and sanitation guidelines, sanitising their key pads after every purchase and encouraging their customers to pay via Snapscan. They also added a home delivery service to their offering to meet consumers lockdown needs, additionally teaming up with Poké Co to deliver DIY poké bowl kits to customers’ doors.
Regular retail will not vaporise in South Africa, but it will evolve, as 22% of South Africans are already shopping online more often, and 42% of under-35-year-olds are shopping less in physical outlets. So many businesses and retail distributors will need to switch to delivery and/ or remote-first options. Looking further into the future, according to Kantar’s research, we can expect more specialised delivery solutions (for example, drop off points for frozen or cooled food), and more advanced supply chain optimisations (for example, multiple shops bundling deliveries to the same household or street).
A brilliant example of a South African brand that has turned their business upside down to meet changing consumer needs is Granadilla Swim, who completely transformed their business direction when the pandemic threatened to close their business and make their staff redundant.
They pooled their assets together and to help other small businesses, adjusting their online store to deliver essentials to help customers stay home, stay healthy, and help flatten the curve. They’ve launched Granadilla Eats using the Granadilla brand and team, and have partnered with local farmers and popular small businesses, delving into the South African new online delivery service world rapidly and successfully.
Lastly, local consumers are realising that local really is lekker, with 63% of local consumers remaining loyal to the trusted brands they know and love, and consumers showing a greater degree of support for local brands. According to Kantar’s research, local tourism will flourish in the future, as traveling abroad may only be worth it for extensive holidays, taking a period of quarantine into account. The perception of local rural and remote spots, as opposed to exotic international locations, will become luxury escapes.
A great example of a local brand that has evolved to meet changing consumer behaviours at lightning speed is UCOOK. Not only have they initiated a more eco-friendly system by changing their previously printed recipes to digital paper-less recipes, but they have also sensitively focused their social media content on immune-boosting tips from their in-house nutritionist as well as including probiotics or sweets treats in delivery boxes. Finally, they have transitioned to a new socially-focused business direction by launching the UCOOK Food Fund in partnership with FoodForward SA, Ladles of Love and PEDI. Through this fund, they are hoping to raise enough money to ensure that more people don’t go hungry every week.
As humans (and marketers), many of us will be fearful of change, especially when it’s accelerated by something as alarming as a global pandemic. But we know that this virus, too, shall pass. At some point in the future, we will return to our beautiful local streets, coffee shops, and the many other activities that we have been denied during these darker days. However, we urge you to keep your brand’s light burning. This is because while lockdown will eventually come to an end, the changes in our habits are here to stay and by adjusting wisely, we can create a future that is perhaps better than our past.