In the U.S., people are becoming more anxious to see stores and businesses re-open. But when they do open, will people come? To answer this, we must view consumer readiness through the lens of COVID-19 – and against the backdrop of how this is progressing in Europe.
Learnings from Europe
As Europe is in the beginning phases of opening safely, the U.S. is watching and taking notes, as it has followed the same COVID-19 trajectory.
Using the 2008 recession to navigate through this rough terrain, Europe is predicting the largest quarterly decline in economic activity since World War II, meaning approximately an 8 to 13 percent drop in gross domestic product (GDP), even with precautionary measures in place.
And while many European companies have been creative and withstood the first economic shockwave, the longer lasting effects and loss of consumer confidence is expected to drive recessionary behavior, including:
- Increased price sensitivity
- Higher digital engagement
- More attention to wellness and hygiene
- “Nesting” at home
All of these things will necessitate redefining CPG, Restaurant and Retail brand purpose.
Preparing for Unpredictable Waters
With the list of ‘must-dos’ feeling a little murky and overwhelming, mixed feelings of hope and fear are palpable. Knowing how to proceed and advertise in uncharted waters, brands need to be prepared for the unpredictable as consumers have grown selective during this self-isolation. So, we’ll explore a few key areas to provide context that will guide brands in consumer-focused efforts in the three areas mentioned. But first, a quick overview of the landscape:
With Shanghai Disney reopening in stages, with social distancing, masks and health checks, all is well so far. We see UK cinemas setting a reopening for mid-July and Scottish Churches setting plans for resuming mass in ways that decrease risks of infection – but all of it feels really far off.
And then Greggs had decided to open its High Street Bakery this week, and pushed the date off to July 1 as well, amidst fears of being overwhelmed with patrons. Instead, it plans to test its safety protocols during this time and make sure everything is in place for a safe reopening.
People “miss” it after all, but are is the store ready?
Overall, businesses seem to be afraid to reopen, as no one wants to get consumers sick and then face potentially permanent closure.
Based on the rising conversation, it’s time for brands to rethink not only protocols, but perception . . .
CPG Reimagined as “Caring Packaged Goods”
Consumer Packaged Goods (CPG) covers everything from packed frozen peas to hair dye. These items that are used up relatively quickly and re-bought are getting the “once over” from decidedly picky consumers during this mandated isolation. And brands have been forced to find creative ways to connect with consumers and re-win that previously earned, and now tenuous, loyalty. Advertising carefully and tastefully has been a balancing act – and its one that Estee Lauder manages well.
From the AIDS epidemic, to breast cancer awareness, to championing global efforts towards a better environment, this beauty engineer is tackling COVID-19. Donating two million towards relief efforts and taking pay cuts including 50% salary reductions for Executive Chairman, William Lauder and President & CEO Fabrizio Freda, Estee Lauder is continuing to prove they are a caring part of the human experience by continuing to offer pay and benefits to its field employees.
And although traditional stores stay closed, Estee Lauder’s online stores are booming with sales as consumers seek out comfort in the shade of corvette red for their lips. An icon of caring, EL promotes giving, not just for themselves, but encourages others too, which is going a long way to connect with their consumers in a time of want.
Acknowledging the battle and choosing to promote safety measures and caring, is a winning strategy with consumers. With social engagement up and Instagram alone seeing a 70% increase in March, digital savvy CPG brands are using social media to promote ‘giving back,’ keeping themselves in consumers minds. Now as we re-open, consumers will be paying even closer attention to who continues to give.
New Twist on Consumer Engagement
Most consumers feel that CPG companies should continue their efforts even after the crisis has ended, “In the previous recession, more than 75 percent of consumers agreed that “corporations should operate in a way that aligns with society’s interests, even if that means sacrificing shareholder value” .
And it’s not just about giving, but consumer engagement. Weetabix, a UK family household breakfast option is showing how.
Creating a contest to keep home-bakers and chefs engaged, they challenged consumers to think outside the box, Weetabix created their ’any which way Weetabix’ recipe contest, with a $10,000 prize. Consumers went wild submitting recipes, and Weetabix used CGC (consumer generated content) to further demonstrate their listening skills.
Everything brands have done, and do now, will stick in consumer’s minds, encouraging them to action. Generous and engaging is what Weetabix will be thought of as everyone navigates from choppy into calmer waters. Estee Lauder will be a caring champion of COVID-19.
And unlike other categories, CPG is able to create largely contactless connections and continue to make sales, assuming workers can show up and folks have money to spend. So, CPG’s focus needs to stay on caring and riding the wave of consumer love for as long as it plays out. And to watch for any rogue waves – like reinfection rates – that could knock them off-balance.
Consumer confidence needs to be restored here CPG sales will follow.
Restaurants, on the other hand, must evolve differently . . .
Restaurants – A Lesson in Evolution
Many restaurants, being among the first businesses to close doors, have begun operating via delivery or pick-up, serving up a slice of normalcy as a way to stay afloat.
Now that re-opening isn’t far, we can see the conversation has grown and shifted within the past few months – away from lockdown conversation to talk about staff (teal blue).
Conversations abound about what our dining experience will look like and whether masks, gloves and sanitizer are on the menu. And equally, we see worry. Will opening too early ultimately hurt restaurants?
Restaurateur, Ryan Frasier of Mad Frans shares this concern. “Getting businesses open is the first step,” he says, “but there is a second step: keeping them open, and a third step: stopping a second spike, which would kill the industry.”
Eating out is about socializing just as much as it is about not having to cook. With our new normal still at a distance of 6 feet, it goes a long way to discourage in-person dining out, even with the government go-ahead. So, will consumers come?
Opening New Lines of Business
In Italy, Franco, owner of Il Bello Cafe bar in Rome confirmed these concerns, “I just reopened today, but it’s not even worth it. There is so little work for us, few people are coming in, but also the bar isn’t about just buying a coffee, or cappuccino, it’s about a conversation. It’s social. The government does what they have to do for the pandemic, but the bar and our work is something else — it doesn’t go with these measures.”
And that can sound discouraging, but there is hope. “Necessity is the mother of invention.” And although serving patrons outside has been suggested, and sounds amazing, it’s just not a viable option for many locations. Restaurants and eateries have to innovate.
Recognizing the need for necessities that has suddenly become scarce, many bars and restaurants not only began to cater to take-out when forced to close, they became hubs for other needed items like toilet paper or flour. Restaurants everywhere had to adapt to survive during the pandemic, and those who couldn’t had to close their doors. And these adaptations may become new lines of business for many.
Glou + Glick, a Brooklyn based winery began selling odd items like salt, canned soups and pancake mix. Noticing that customers needed more than wine and didn’t want to go to a grocery store that was sure to be more populated, this wine bar served their community. And they aren’t the only ones taking cues from the needs of their customers.
Natalie Hernandez owner of Boca Santa restaurant in New York decided to take advantage of the fact that she had access to fresh organic produce and provide veggie boxes for delivery or pick up.
With the world re-opening in phases, and not being able to guarantee what that could like, it clearly pays to be able to evolve, even if it’s outside of what you normally offer. The key is listening closely to what consumers need – and pivoting to provide it. Online offers this insight in a huge way. It always has, of course, but now it does more than ever.
Retail faces similar struggles as both restaurants and CPG brands. And, unlike food, they feel less essential. This may make it the hardest area hit.
Retail It from The Heart
Each state has its own set of operating instructions, leaving retailers with multiple locations in a pickle. Phasing into re-opening, California is allowing curbside pick-up of bookstores, music stores, toy stores, florists, sporting goods retailers, clothing stores and a few others by May 8. In contrast, Iowa has already opened up retail business for browsing in 77 counties, and restaurants were allowed open at 50% capacity.
Retailers are the guinea pigs in the first phase of re-opening. And there’s lots of discussion around it:
In the UK, the British Retail Consortium (BRC) has provided guidelines for store re-openings that include, hand sanitizer stations, masks, distancing measures, limited customer seating and no access to changing rooms. And consumers are responding with an equally all over the map reaction:
Like retailers, consumers are weighing the benefit and costs of socializing right away once stores re-open.
Research by PYMNTS shows that out of 12,000 consumers surveyed, just 28% report being extremely interested in going out, with 51% being slightly or not at all interested. People are being cautious, becoming almost too comfortable at home. This has produced funny memes that expose the way consumers were/are feeling and fearing.
But fear of the unknown is probably the only universal truth right now, as the sentiment on whether to open – and how – is hard to pin down, as social media continues to show.
Retailers best friend might be Instagram or Facebook right now, as it is a direct connection to consumers, the force that could make or break stores, as in-person will remain a crap shoot right now. And though they are divided on re-opening at this point, consumers are united on safety measures. The more PPE, the merrier.
Consumer Understanding Is No Longer Optional
In the end though, it may be online sales that holds retailers together. eCommerce was already on an upswing before COVID-19, and it has only continued to grow as everyone sheltered in place.
Further, brands and businesses with influencers sharing their products from home are experiencing exceptional engagement. It offers a level of relatability that consumers appreciate and need right now. And is one that retailers need to really take advantage of by connecting with the right brand influencers.
Being viewed as caring is better in the long run than being viewed as ‘open.’ And with the prediction that consumer habits will persist, companies are preparing to continue handling growing online orders. They key here will be relating in ways that ensure that growth! Careful social monitoring will be crucial here, of course!
Priorities have changed, and if consumers can get it online, they may opt for that to reduce social contact. And they’ll keep outings reserved for necessities, like the doctor or barber. This should encourage retailers who are offline, to get on. Now.
There doesn’t seem to be a clear answer on the perfect approach to re-opening, beyond pairing it with an extremely solid online presence, and – in the case of food, developing more contact minimizing options.
Brands and businesses must employ every online tool to understand this evolving market. Consumer and market intelligence is the most important intel you have right now, so make sure it’s accurate and up to the job! Reach out for a demo, and we’ll show you have to be confident in the decisions your company makes in the wake of COVID-19.