COVID-19 has significantly changed the business landscape. With budgets slashed, events cancelled, and consumer behavior shifting, businesses are having to change too. PwC’s 2020 Global Consumer Insights survey shows a shift in the consumer’s priority with 69% saying that they are caring more about their mental health and physical fitness and 63% want to eat healthier as a direct result of the COVID-19 pandemic. Filip Lozie, Partner at PwC Belgium, says: “While certain trends have been on the upswing for quite some time, our research shows that the pandemic has sharpened consumers’ desire for transparency, sustainability and convenience. Consumers now expect their health and safety to be prioritized. In our 11 years of surveying consumers around the globe, we have never documented such a clear convergence of themes around transparency, sustainability, and social consciousness. At such a pivotal moment, the need for consumer-facing companies to establish trust with potential customers could not be any clearer.”
Here are six ways the COVID-19 is changing business as we know it.
New ways of working
More than 1.54 million people are currently working from home (WFH). With 60% of the UK’s adult population WFH during the lockdown, each of these workers will save £44.78 (on average) by cutting out things like commuting and buying lunch out. Adding to this, many people are also currently working on reduced pay or furloughed. This period has given people the opportunity to reflect and access their priorities and old habits. With 92% of workers believing that they are well equipped to WFH and four in 10 London buyers already considering moving to the countryside, employees are sold on the benefits of WFH.
With two-thirds of employers reporting increased productivity for remote workers compared to in-office workers, businesses are also discovering the benefits of a remote and flexible workforce. From a recruitment perspective, when hiring and keeping top talent, be able to offer a flexible working culture will become a crucial factor, whilst from a revenue perspective, flexible working means less office space and more money saved. From a productivity perspective and with 83% of employees feeling that they do not need an office to be productive and 65% feeling more productive at home, businesses seem to be sold on WFH.
Being a digital-first brand isn’t a new concept, but with people no longer be able to pop to the shops, it’s now critically important to any business. COVID-19 has automatically put digital-first businesses ahead of the competition. Since the COVID-19 pandemic, online purchases via smartphones have increased by 45%, and sales via laptop have increased with 41% so being digital-first is key to getting people talking, reaching new audiences, and continuing to grow.
On top of their existing digital offerings, some brands are even taking a step further by creating immersive experiences, entirely online. From the National Theatre streaming live critically acclaimed performances to Joe Wicks’ PE workouts, even Carlsberg, Budweiser and Rémy Martin have partnered with e-commerce giant JD.com to provide online clubbing.
In fact, 86% of consumers say they’ve changed their behaviour as a direct result of Covid-19. Now that in-person events have been cancelled to no date for a come back; the only way businesses can survive is taking a digital-first approach.
Increased demand for direct-to-consumer brands
Over the past few years, Direct to Consumer (DTC) brands have exploded. Forbes reported in their article (2019) DTC Brands Are Getting A Lot Of Attention And Growing Fast that DTC advertising increased 50% in the past year. Cutting out the middleman empowers businesses to build stronger customer relationships by offering more competitive prices. DTC brands ability to adapt has seen DTC businesses thrive during COVID-19.
While many traditional businesses are (still) struggling to manage the complexity of international supply chains, DTC brands have modified theirs to continue running smoothly. For example, Bloom & Wild stopped relying on growers from the continent and are now outsourcing entirely from the UK.
As more consumers discover the benefits of going direct, DTC brands from beauty to biotech will continue to gain prominence post-COVID-19. With time passing and brand loyalty, sinking in demand is likely to continue post-COVID-19. Retailers with extensive supply chains need to review and refine their models in order to compete in today’s environment and tomorrow post-COVID-19.
As Cheryl Calverley, chief marketing officer of e-commerce retailer Eve Sleep, told The Drum: “The reason we sell directly to consumers online is that it is the most efficient way, and it is never to be gimmicky. Brands that don’t do it properly will get found out.”
With one third (36%) of worldwide consumers spending less because of the COVID-19 outbreak, many businesses have seen their budgets disappear, and they have had to rethink their strategies, customer acquisition and retention strategies. There’s more scrutiny than ever on ROI – for many businesses, untraceable campaigns no longer are viable options. Instead, brands are turning to less traditional channel but more measurably effective ways, such as referral programmes.
Prior to COVID-19, 44% of businesses focused primarily on new customer acquisition, despite it being five times more expensive than focusing on existing customers. The current climate is prompting more leaders to realise the untapped value of their existing customers. Businesses are focusing on brand-building and customer retention strategies that engage with happy existing customers for long-term results.
Living brand values
Brands have got away with simply saying the right things. However, COVID-19 has changed what consumers expect. Companies that helped during the COVID-19 crisis are getting far more attention in the press and on social media than any clever or expensive business strategy stunt could achieve. Equally, those falling short are being called out – i.e. Virgin Atlantic and Victoria Beckham.
The importance of brand values is reiterated by how supporting the public has been towards local businesses. COVID-19 has shifted consumers loyalties to support the small business more than ever. Small acts such as ordering food from a family-run restaurant or following a Zoom workout from a local instructor have a lasting impact, and brands should quickly understand that if they want to success post-COVID-19.
In April, the importance of brand-building in the current climate was evident with an increase of almost 40% on spending at local off-licences, greengrocers and convenience stores.
Preparing for the times ahead
It takes 21 days to form a habit, and after six months of COVID-19 lockdowns, quarantines and self-isolations, consumer buying habits are certainly different from where they were before the pandemic hit. COVID-19 has forced businesses to rethink their offerings, strategies and brand. As we emerge from this crisis, effective long-term strategies will be key to any business success in the post-COVID-19 competitive landscape. With most companies believing they could be ready to restart business as normal with just three weeks’ notice, the key to success is to reactivate their customer acquisition and retention strategies now.
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