Big events change what consumers value and how they buy. The 2008 recession dramatically altered buying behaviour and the COVID-19 lockdown is shaping future buying behaviour right now. Very often major events don’t create new trends, they simply speed up or galvanise existing behavioural changes. But which changes are temporary and which are here to stay?
Emotional Logic’s COVID-19 Impact Survey is on-going and here we are sharing the first signs of changes in consumer values and actions.
What we can learn from the 2008 Recession
After the 2008 recession UK grocery shopping was never the same again. Constant price promotions and the surge of discounters (ALDI and LIDL’s share of the UK grocery market has trebled since then) show us that consumers now place a much higher emphasis on value for money. In fact a study by McKinsey & Company proves this for the US market also.
But this increased emphasis on value for money also created a second major trend – it basically wiped out the mid-market brand. While middle of the road was a safe bet for brands before 2008, now this was the danger zone. As consumers were trading down for everyday products they were then splurging out for special occasions, the weekend, or specific product categories. This trend does not only apply to packaged goods – in fact everything from clothing to cars – the best chance of success, even now over a decade later, is to be either a bargain or a premium luxury brand.
But now lets look to the future, what can the Emotional Logic’s COVID-19 Impact Survey tell us about how consumer habits are changing:
How COVID-19 will change consumer behaviour
1. Winner: Technology
Tech is in many areas of our lives already, but for a large number of people there is still a lot of mistrust and hesitation when it comes to adopting technology. In fact the Edelmann barometer shows that trust in technology is weakening in developed markets. The pandemic may change some of this.
In our COVID-19 Impact Survey 85% of UK adults agree that they are grateful to technology allowing them to keep in touch. As a wider range of audiences is getting used to video and ZOOM calls, we can expect the trust in technology to increase. Good news for tech brands. Let’s hope they use their power ethically responsible.
2. Winner: Eco-friendly brands
Climate change and plastic packaging are continuing to raise awareness of the ecological cost of consumption, but the recently discovered (potential) link between air pollution and coronavirus death rates has put this even higher up on the agenda. In our COVID-19 Impact Survey 76% of UK adults agreed that they ‘Hope the pandemic is a starting point for us to live more in harmony with the planet’. So eco-friendly brands and products should see some benefits as a result.
3. Winner: Home products and services
Spending time with family is one of the key things consumers enjoy about the lockdown (22% see it as a benefit) and missing family is one of most common complaints (28% said they did).
As consumers are become more used to and comfortable being at home many are rediscovering that staying in can be great. This will further fuel the trend of ‘cocooning’ that already started before the lockdown – more staycations, house parties and take-away meals in coming up.
4. Winner: Online Grocery Shopping
This is likely to be another winner. Before the pandemic only 8% of groceries were bought online, with supermarkets increasing capacity this may go up to 15%. As consumers have rediscovered they actually like having leisure time, spending time grocery shopping is now seen as a drag. Having to queue, clean your trolley and wear gloves when shopping will further put people off the experience. Expect more people to take up the service even after lockdown to free up leisure time for other things.
5. Winner: Healthy Living Brands
Some consumers have discovered a healthier lifestyle due to the lockdown, more exercise, home cooked meals and healthy eating. In our COVID-19 Impact Survey we asked people which of the things they have changed due to the lockdown they wish to keep up afterwards – and 1 in 3 is determined to do more exercise and live a healthier lifestyle.
The health and fitness industry has already seen big gains in recent years, the pandemic is likely to further fuel the growth of the sector, gyms, walking and cycling equipment as well as healthy food products are likely to be winners.
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Emotional Logic is a research agency specialising in behavioural insights and works with brands, charities and public sector organisations to understand motivations and shape future behaviour.