It has been over 6 months since Covid-19 was first reported in Europe and with certainty on a viable vaccine, I feel we must learn to live with the virus. We have already seen the impact on businesses with customers adapting to new norms. History suggests that businesses that invest in innovation during economic downturns typically outperform peers during recovery. With technology capabilities increasing year on year, the cost to innovate has significantly dropped.
During lockdown, consumer behaviour significantly changed during a short time period, with trends that typically take a few years to develop, unfolding immediately. Business that have accommodated these changes are the most likely to thrive post pandemic. Customer behaviour is critical to the innovation agenda and the Mckinsey report outlines three that are key to consumer goods businesses:
1. Trying new products – social media has been central to businesses, providing significant global reach to end users. Consumers are attracted to new brands which offer something different typically at a lower price or better environmental and social impacts (for example, ethically sourced or organic products)
2. The resurgence of large brands – globally, consumers are opting for brands they can trust. According to Mckinsey, this is as large as 52% of total consumers in the UK. In some categories customer loyalty is extremely high, especially when it concerns high valued goods (e.g. televisions, mobile phones, laptops. etc) – I imagine most of us have participated in the Samsung vs Apple argument.
3. Nesting at home – physical distancing has encouraged a mobile-first/online mindset which is no doubt going to continue in the foreseeable future. As a result, Digital engagement has continued to remain high: 80 percent of consumers report safe, easy, and convenient experiences in direct to consumer channels. With that being the case, communicating with customers have become far more sophisticated with consumers more willing to the communicate across multiple channels including voice, chat-box or email.
The Mckinsey article provides four useful insights how consumer good businesses can innovate during this period:
At polestar, are working with businesses across multiple sectors that have adapted well to the pandemic and embraced innovation to better serve existing and potential customers. Some examples include: further investment into technology infrastructure to boost e-commerce traffic, trialling new products in response to the pandemic and re-evaluating direct to consumer approaches through digital marketing. We are always interested to learn how businesses have responded to pandemic and willing to share our own experiences. Please do get in touch.
As the COVID-19 pandemic continues and new consumer behaviours play out, it’s time for manufacturers to reimagine their innovation portfolios to lead in the next normal