CATEGORY / Strategy

How the Coronavirus is Impacting Consumer Purchasing Decisions and Creating a Massive Opportunity for Brands

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only. – Dickens, A Tale of Two Cities

One of the greatest sentences in history. True of the past, and also how the present COVID-19 pandemic is affecting people, communities, nations and the global economy.

It’s also true of the dilemma facing marketers and businesses at this very moment.

Many of us are feeling the negative effects of this pandemic. Sales are down. Budgets are slashed. Forecasts are grim. Supply chains are threatened.

Conversely, others are benefitting. Sales are up. Budgets are steady, if not increasing. Projections are optimistic. Supply chains are working hard to keep up.

There has been smart discussion about maintaining or increasing marketing budgets, much of which is backed by solid evidence and research. Zozimus would like to add to this discussion by exploring how different types of brands should respond based on how people are reacting.

We know businesses and industries have been impacted. But what about consumers? Zozimus commissioned a survey conducted online by The Harris Poll among 1055 adults across the United States to understand how the uncertainty surrounding the COVID-19 pandemic is impacting people’s purchase behavior.

Things are different. For now.
The majority of Americans are prioritizing needs over wants. This is not surprising as many people’s incomes are being decreased or eliminated, and as people retrench to survive the length of the downturn (and likely recession).

 

57% of consumers are prioritizing needs over wants

 

We’re open to new brands because we have to be. Especially “forced” buyers.
As we prioritize needs over wants, we become increasingly aware of products and brands we normally do not think about. Panic purchasing of toilet paper is something many people can relate to at the moment.

 

Only 33% of consumers are purchasing brands they trust

 

It was initially surprising that many people are not choosing brands they trust during a crisis, but this makes sense when the current context is accounted for. Panic shopping, continuous coverage and competing truths, societal restriction and an overwhelmed delivery system are forcing consumers to scramble to purchase any brand, even if it’s not their preferred one. This creates an interesting set of consumers who are “forced” buyers, rather than traditional light buyers who decide to purchase your brand and product(s).

Not only are people incorporating new brands into their lives, they are also becoming open to forming new perceptions of brands.

 

20% of consumers report being open to forming new perceptions of brands

 

While this is still a small subset of all consumers, it is important that marketers remember the influence that brand communications can have on those who are consciously, and unconsciously, reevaluating their options.

Consumers are still watching, even if they’re not buying.
One of the most critical learnings to emerge from this survey is focused on what people could be doing even if they are not buying. People may be watching your brand, even if it feels like they aren’t.

  • 24% of consumers say they will reward brands that help in this time of uncertainty
  • 15% of consumers are focused on what a brand does
  • 14% of consumers are focused on what a brand says

 

It is noticeable that many consumers report a willingness to reward brands that help, and that brand actions appear to be equally important as brand messages at this point in the pandemic. People are looking for help and they are keeping tabs on what you’re doing. Many brands were quick to send communications at the onset of the crisis to “let you know we’re here,” but brands must now deliver real value or risk appearing opportunistic or out of touch.

People have always been more concerned with their own lives than they are with brands. But this pandemic has forced many of us to realize how intertwined all aspects of our lives really are. While most brands may still orbit in the periphery, there is an opportunity to alter your brand’s trajectory.

Don’t overestimate The Great Pause
It’s easy to extrapolate fundamental shifts in buyer behavior from this data, but we believe most people will revert to their historical purchase behaviors and attitudes toward brands if left to their own devices. This means there will be a critical period where light and “forced” buyers reassess their purchase behaviors and attitudes toward brands that were influenced by the pandemic. This future moment presents an incredible opportunity for smart brands and marketers to win the share and sales battle now.

Value brands and brands of value can be more
Whether you’re currently succeeding because you’re a low-priced option, or because you provide a “need” product, it is critical that you do not become complacent. This is the time to re-examine your brand and cement yourself as more than “a good deal” so that you are perceived to be more than just low price and be purchased for reasons on top of it. Examine your history, your product strengths and your emotional benefits to uncover your “Price+” brand. Leverage your unique opportunity of increased sales to develop and market an enhanced brand during the pandemic (and likely recession) to retain share once the new-normal arrives. Fight probable future sales attrition by creating separate light and “forced” buyer strategies. The right brand and tactics may also create an opportunity to decrease consumers’ price sensitivity down the line.

Premium and luxury brands shouldn’t give up
This is a stressful moment in history for many companies. Many people cannot, or are not, buying higher priced or “want” products and brands. This is the time to shift your marketing to more branding efforts (since fewer people cannot buy it makes sense to decrease or pause sales efforts) and expand your application of branding. Communications can be updated with more relevant messages and products. Pricing strategies can be explored to help consumers afford your products in time of financial strain. Distribution can be expanded or narrowed to help consumers purchase your brand easily and safely. And new products can be created – either in your category or in ones that cannot meet demand without help.

The brands and companies that thrive in the new-normal will be the ones that work to keep it the best of times, or those that make it so.

Survey Method:
This survey was conducted online within the United States by The Harris Poll from March 30-31, 2020 among 1,055 U.S. adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact Jake Garber, SVP, Director of Strategy & Planning, at jgarber@zozimus.com.

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