Covid-19 and the Changing Market
“All times are unprecedented,” is one of the many Facebook responses to the great news story of 2020: the Covid-19 pandemic. That particular response is right, in a way. It’s impossible to measure shittiness against a control. What you can measure, however, is the pandemic’s impact on our world.
For those of us in the advertising and marketing industry, the scramble is to adapt to the pandemic’s effect on economics. You’re probably already aware of the number of people who have lost their jobs in the last 3 months, as well as the enormous increase of people applying for unemployment and government aid programs.
These numbers are scary. If people are concerned about their income, how does a company continue their sales strategy? How do you advertise to people who are scared and sad? Conversely, what about the people lucky enough to not really be affected right now? How will businesses adapt to a smaller market and fewer customers?
These are all questions we’ll attempt to answer. So, grab your notebook and get your learning on.
Billionaires Love Quarantine
Months of quarantine, with many in total isolation, no doubt has impacted our mental health. Those of us with school-aged kids are figuring out how to work, parent, and teach in the same space. Those of us in a committed partnership are learning what it means to live without “alone time.” All of us are figuring out how to handle days upon days of having nowhere to go, and sometimes, nothing to do.
The emotional (and sometimes physical—quarantine 15, anyone?) changes we’ve all been experiencing have had an enormous impact on the way we consume products and information. Weeks and months in quarantine have not only slowed the economy as a whole, but have altered the way we shop.
Although some countries and states have completely reopened, not everyone has kept their job. As incomes continue to fall or disappear entirely, consumers have switched to purchasing only things deemed “essential,” such as groceries or personal hygiene products. All over the world, people are more mindful about what they purchase and why as the economic impact of the virus is still uncertain.
Although much of the news was bad, there are people who have been relatively unaffected by the pandemic—financially, at least. Take billionaires for instance. An April Forbes article reported that since March, their “total wealth has increased by $308 billion.”
Another segment of the population that’s been able to maintain financial stability are those in sectors that easily transferred to the telecommute model. These are the people who still have the ability to splurge on “big ticket items,” like cars, homes, or trips (mainly within the US, of course). A Resonate study found that “2.1 million people said their likelihood of making a major purchase has increased since COVID-19 began.”
The same study found that these people are mostly married men ages 35-44 with no kids, 18% more likely than the average U.S. consumer to have an annual household income of $100-150K, and they’re more likely to buy houses, jewelry, or make upgrades to their current homes.
According to an Accenture Pulse Survey, whether or not people have the money to spend, digital commerce is on the rise. (DUH). Because many had no other choice, consumers began embracing technology in a big way. Across the board, businesses have seen at least a 10% increase in their online customer base. The research suggested that, for some of these consumers, the switch to ecommerce will remain post-Covid. For example, those who have taken advantage of online grocery ordering, or curb-side restaurant pick-up, will likely continue long-term.
Shelter-in-place mandates and concern about the virus has kept some people mostly in their homes, which means some of the money usually spent eating out, going to movies, or traveling, has been funneled to online shopping.
(However, Americans who still want to vacation this summer are taking strides to do so safely. As a July Business Insider article suggests, this includes “regional road trips over far-flung flights, lodging that prioritizes hotels with stringent COVID policies, and private home rentals instead of crowded resorts.”)
The growth in ecommerce has been, of course, dominated by Amazon, which grew 30% this year. Wayfair shares have doubled. Etsy’s marketplace grew by 100% in April, much of the drive being fabric face masks. For online markets at least, business is booming.
Health is Wealth
The Accenture survey also found that those who worried most about their personal health during the pandemic increased their purchases of personal hygiene products by 50%. Within that scope, consumers are now tending to buy health-related products. The health and wellness industry, including supplements, immunity products, and online fitness tools are faring well. In accordance with spending money on their health, consumers are also looking toward businesses that offer sustainable products or follow sustainable practices. In today’s world, self-care is a big deal.
This same survey found that people are concerned about the economic impact of the Covid-19 pandemic. In general, that means people are willing to spend money, especially to support small and local businesses being hit hardest by the pandemic. Shoppers, particularly those who frequently shop online, are more likely to go out of their way to spend their money locally. As the Accenture survey points out, “CPG companies will need to explore ways to connect locally—be it through highlighting local provenance, customizing for local needs or engaging in locally relevant ways.”
Adapt or Die
What do businesses do with all this change? They do what they have to do: pivot.
Bars and restaurants, some of which are still currently closed, had to figure out how to serve their communities online. Restaurants that offered predominately dine-in experiences had to shift to take-out. For many, this meant updating their websites with technology that allowed for online ordering, and re-establishing how to function without tables and customers.
If anything, Covid taught the restaurant biz how essential a functioning website is to their business, especially one that people can easily navigate and use to place orders. The same thing is apparent for traditional retail businesses. If you can’t rely on people being physically in your store, then you sure as hell need to move it to a digital space.
Having a responsive website, and one that can scale to mobile, is more important than ever.
Bars began offering to-go cocktails, a move that was not only innovative, but freaking smart. According to Newsweek, alcohol sales rose 55% in late March compared to the same period in 2019. Instead of going out to get a drink, Americans have spent more time making cocktails at home. Trends such as virtual parties and happy hours have only added to the need to purchase alcohol for the home.
Grocery stores and other retailers have set-up social distancing measures in order to keep their customers safe. Many stores have stickers and taped lines to delineate 6 feet, and most stores in bigger cities require masks. Grocery stores have also added special hours for older and at-risk shoppers.
Gyms, yoga studios, and other in-person classes quickly switched to providing online courses. Some of these businesses have begun offering their classes for free to those who have lost their jobs and can’t afford to keep coming.
If businesses have remained open during quarantine, they’ve limited hours to ensure thorough cleaning and disinfecting before and after customers are in the store.
Old Is New Again
Some businesses are starting to revert to technology that previously seemed obsolete.
Burger King ran a television spot that featured a QR code. If you use your smartphone to scan the code, you are directed to a webpage that features coupons for free Whoppers to be used with the restaurant’s app. (This campaign is over, though. Sorry to all the Whopper-heads out there.)
Hulu is employing a similar tactic. If you pause a movie while streaming, a QR code pops up and asks if you’d like to order a beer. If you would, in fact, like to order a beer and use your phone to scan the QR code, it will pull up several options from which you can order delivery.
Tone It Up
Another major shift we’ve seen, definitely dictated by consumer actions, is in how brands have shifted their tone. It’s well known that consumers are more likely to make purchases from companies whose values align with their own. The current pandemic has only highlighted that fact.
At the beginning of our “new normal,” brands essentially ran over each other to share their version of the In-These-Uncertain-And-Trying-Times™ spots. These ads defined business’s precautionary measures, and tested their creative teams’ ability to speak to tough times in original ways.
And though some brands may come across as insincere or pandering, it’s still probably the “right” move. As CEO and founder of ONA Creative Sanja Komljenovic explains, “Now, more than ever, consumers want to know their money is going toward companies that are doing the right thing.”
Charmin assured us that they were “working around the clock” to ensure we all had access to toilet paper. Cottonelle shared a similar message: they’re working hard to make sure the shelves get restocked. Both toilet paper producers also chose to include messaging surrounding their philanthropy, with Charmin donating $2M to Direct Relief and Cottonelle partnering with United Way.
What Are You Saying?
If you’re a business owner and want to message your clients and customers, you need to ask yourself some questions: Are you taking the necessary steps to ensure the safety of your workers? Are you supporting your community? (During the Pandemic, 80% of consumers have felt more connected to their community.) Are you making donations? If so, let people know. Even if you don’t have a large advertising budget, social media platforms are free. Use them.
Consumers want to reward that kind of behavior. A 2018 survey revealed that “73 percent of consumers are swayed by companies’ charitable giving when determining where to make purchases,” and that’s likely to have increased.
So, what about brands that are saying the right thing? What are they talking about and how are they expressing their thoughts?
Jason Heller, president of AI (artificial intelligence) company Persado, has been paying a lot more attention to the language his company uses since the beginning of the pandemic. “We’ve been focusing on sophisticating our language algorithms with what we call ‘mindful narratives,’ the language of optimism; the idea of home as a safe haven, a sanctuary,” says Heller. Times are tough for many Americans right now, and they want to be given hope.
Heller then goes into a list of words and phrases to avoid, including “unprecedented,” “we’re here for you,” and “we’re in this together” as all of the “go-to’s lost their impact in a matter of days.” As advertisers, we’re kind of in a tricky spot as it pertains to language. We must strive to be hopeful, but not cliché. We must reassure consumers without pandering to them.
Brands that already had an established voice and connection with their audience definitely have a leg up. If that isn’t you or your brand, we have a couple pieces of advice (Pssst, right here might be a good start). Heller also stated that consumers want to be reminded that “things will go back to normal, so marketers should consider language that offers comfort and even permission to step away and decompress.” But perhaps a more effective route is to engage with consumers through original content.
A Forbes article from May explains through “humanizing your brand and speaking to consumers’ concerns—not your company’s—you can nurture an ongoing conversation” with your audience. At the end of the day, this is what brands should want: a connection with their customers.
The content you make will vary on your brand, but current best practices would suggest centering it on a product or service that will have a positive effect. If you’re a gym, that could mean creating content surrounding your new streaming classes. If your business model doesn’t offer products or services that provide hope to your customers, center your content around what you’re doing for your community.
One brand that’s done an exemplary branding job during the pandemic is Country Time Lemonade. With their “Littlest Bailout Ever,” they are offering $100 bailout checks to young entrepreneurs to “help preserve the values of lemonade stands.” The lemonade brand is taking quite the stance. One of their Instagram captions reads “Big restaurant chains and pro sports teams taking small business loans? That isn’t right. Introducing #CountryTimeBailout, relief checks for lemonade stands. Apply for a relief check today.”
Not only is this completely adorable, it’s incredibly smart. It’s a campaign that’s going to connect with consumers and though nothing has hit their socials quite yet, it will likely result in a lot of quality earned media. In other words, Country Time is taking positive action that will likely garner great press and stronger brand affiliation amongst consumers.
Where Do We Go From Here?
Times are, and to avoid one of the “no-no” words, changing. The marketplace is changing. Consumers are changing. As advertisers, we must change as well.
When consulting with our clients, we need to figure out if any of their products or services are beneficial in our current, Covid time. If not, we must help them determine the best way to support their communities, and then determine the best way to discuss their philanthropy without sounding self serving.
Luckily, it feels like the majority of people are giving each other the benefit of the doubt. We’re learning together. We know that our hearts are in the right place at 116 & West, and we feel pretty confident that’s the case for the rest of the advertising world. We’re lucky in that, yes, we are advertisers, but we are also consumers at the same time. We get to see both sides of the coin.
If you’re a brand and are struggling to speak to your audience, we’re here for you. If you’re an advertiser struggling with how to best advise your clients, we’re really here for you. Reach out to whatsup@116andwest and we can chat.