Summary
We are experiencing unprecedented disruptions. The global workforce has shifted to working from home, financial markets are in turmoil, furloughs are escalating, and uncertainty is a daily theme. Consumer buying patterns have transformed almost overnight. The travel industry has largely shut down and restaurants have shifted to take-away only, as consumers shift their focus to immediate needs with a local focus. With major events cancelled, billions of viewers of all ages are now captive to a screen, gaming and consuming content for over 12 hours each day. As consumers and businesses alike shift behaviors and operations to a digital-only paradigm, some telling trends are rapidly emerging and leaving your business in one of the three categories:
- Super Surge: Essential products struggle to keep up with demand, leading to extreme pressures on the supply chain. For instance, online grocery in America has grown 2x, and 1.3x in the UK during the recent months according to Adobe Digital Index
- Rapid Rewire: Previous ecommerce laggards like grocery have been thrust into the mainstream; fast and dependable local delivery is commonplace – from the local deli to new entrants like Costco and Publix, who have made the transition to home delivery at scale in a matter of days. Media companies have dropped paywalls, throttled content quality, and are using the enormous digital trail to train their personalization, provenance and advertising algorithms.
- Suspended State: The travel industry has experienced a steep drop in demand. IATA estimates that revenues may drop by 20% or more. Sellers in the so-called non-essential categories space are rethinking how to maintain relevance and introduce new selling and service models to a consumer with new priorities.
Along the way, brands are scrambling to understand the disrupted consumer, and align messaging, service, and support activities to build confidence, ensure continuity and protect revenue and jobs. According to psychologists, during a crisis, the human brain is wired to:
- Hold on to long-held practices: Tried and tested wins over experimentation right now (you would also see this on supermarket shelves).
- We look for additional information, and opinions and authoritative people, trusted institutions, and companies (internet usage is up 50%)
- We believe the first message. We simplify messages and re-purpose new information to confirm to existing beliefs (e.g. using ‘cancellable’ in ad copy is performing well).
Well-known brands and brand extensions might do better than challenger brands right now – every consumer’s mind space is dominated by more critical and stressful questions, so the cognitive load associated with trying new things will be a burden for most consumers. However, execution also becomes paramount – all of us are seeing empty supermarket shelves, random price gouging by marketplace sellers on Amazon, unpredictable delivery dates etc. A known brand that can give me what I need, at a price point that is fair, and get it on a date that I can rely on – this is what most consumers want right now. A combination of changing-behaviour, pressure of distribution channels, and upcoming cost-pressures warrant a recalibration of the Customer Experience Strategy across engagement journeys. In our analysis, three themes emerge:
- Rethinking Brand Awareness & Promotion: With events cancelled, and people spending more time indoors, the usual out of home top-of-the-funnel tactics require a rethink. Prior to this crisis, many businesses were spending 50%+ of their ad-spend on Digital. Now is the time to better understand and accelerate the use of paid and earned digital media. Bringing more insights at speed to optimize display, content marketing and paid search ROI, focused attention across earned channels like SEO. As an example, in February, L’Oréal in China moved their entire ad spend online, and experienced an uplift in sales.
- Re-evaluating the digital-first customer journey: Clearly the migration to digital channels has been well underway for some time. Data-driven marketers have been exploiting deeper insights to deliver complex journeys across multiple channels, realizing better results through higher precision in segmentation & audience targeting, personalization, and real-time optimizations. However, the current disruptions, are accelerating this need as engagement-paradigms, buying-patterns, and consumer-expectations have made a dramatic shift. We are already seeing dramatic shifts. For example, in China, during the outbreak, Nike’s engagement on digital channels was up 80%, and online-sales were up 30%. With stores darkened and shoppers largely confined to their homes, digital channels are the key to defending and even growing the business. In order to do this, it’s vital to understand the moving customer-journeys, adapt & enhance the content strategy, re-evaluate mobile capabilities, optimize campaign decisions & delivery, engagement using emerging channels (e.g. messaging, voice, and AR/VR) – along with a non-linear delivery plan.
- Digital Commerce/ Service: As digital channels become the dominant norm, digital commerce and service capability maturation is key to realizing revenue, retaining customers and ensuring business continuity. Already we have seen a 50%+ increase in ecommerce revenues from the same period last year and nearly 9% increase in first-time online shoppers. Consumers across sectors are being directed to and turning to online shopping and service channels like never before. Even in sectors with lesser ecommerce adoption like grocery, fashion and high-value goods, digital commerce is driving revenue at previously unforeseen rates. Similarly, service channels are under pressure to better respond to customer needs through digital channels both to meet the increased demand as offline channels darken, but also leveraging newer digital tools like messaging-based channels and online self-service tools to mitigate staffing challenges.
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