The post-pandemic mindset is colliding with a change in economic circumstances resulting in unpredictable consumer behaviours. How can marketers respond? Lisa Ronson explains.
The effects of COVID on consumer behaviour have been reported ad nauseum. From the uptick in online purchasing to the desire to shop local, marketers are now well versed in the so-called “post-Covid” behaviour of their customers.
Before we get too comfortable, increased inflation and rising interest rates have created a new challenge for consumers and marketers alike.
So what happens when COVID’s impact on consumer behaviour meets an economic downturn?
Coming out of the pandemic, we have completely different mindsets and fears about what's going to happen which makes it hard to forecast how our customers will respond.
Historically, behaviour shifts when consumers are concerned. In the past, discretionary spend was the first to go with dining out the most obvious casualty. However, because we spent much of last year in lockdown, particularly in Victoria and New South Wales, there's a different dynamic playing out. If you've been to a restaurant in Melbourne or Sydney midweek, you’ll know what I mean.
We’re not willing to forgo the luxuries we were denied for so long. So instead, consumers are trading down in other areas of their life sacrificing commodities or less exciting purchases so that they can continue to go out and socialise with friends and family. This is new behaviour for a period of economic instability.
While it’s difficult to predict consumer behaviour, here’s what we know.
Right now, there are four key things on consumers' minds: value, health, convenience, and sustainability.
Value means different things to everyone. It's not just price. Generally, it’s a case of getting value for money for the price you’re paying. There's a quality/price relationship across all markets that varies by segment and right now customers are focused on getting the best value they can.
More Australians are placing a priority on their health and COVID has changed this focus significantly. For example, we’re seeing a shift toward dietary changes to embrace veganism, flexitarianism and vegetarianism.
As our work and social lives return to their pre-COVID levels, convenience is also top of mind with an increase in convenience meals or reducing the preparation required to get food on the table.
Finally, sustainability is top of mind. Before the pandemic, only 25% of consumers would abandon a purchase because the brand or product wasn’t sustainable. Now that number is more than 50%. Customers are demanding sustainability and they're holding businesses to account for it.
At Coles, it's was one of the biggest questions we were asked by our customers. They wanted to know what was being done to reduce emissions and food waste. And now, more than ever, consumers are voting with their dollars if they don’t like the answers brands are giving them.
So what does all this change mean for your brand in the face of this ongoing uncertainty?
Of course, this will vary based on your category but consider the common denominators and opportunities.
Some of us are a big part of consumers' lives, and some of us are a small part. Regardless, it pays to consider how you can lean in to help Australians.
During COVID, consumers were highly critical of brands that tried to position themselves as helpful when they were simply selling something. Being genuinely helpful means not overstepping boundaries or jumping into spaces where consumers don't really want to see us.
The brands that have performed the best in the last couple of years are the ones that stayed in their swim lane and were helpful in that lane.
Looking ahead, consumers are looking for quality. They're looking for us to help with their lives but are more willing than ever before to switch brands. As you look to navigate this new phase, consider that people have quite an open mind, more so than what we've seen in some years.
So, while we may not be able to predict the exact response of our customers to the current economic situation, we need to be aware that getting our response wrong could cost our brands.
Just as we’re coming out of one of the most challenging periods in recent history, we’re facing a new set of circumstances to navigate. Perhaps this is ideal timing. After all, the pandemic has been a masterclass in navigating the unknown.
Lisa Ronson is the former CMO of Coles. This article is based on a presentation she delivered prior to her departure from Coles.