Growth in Uncertainty: What Lies Beyond
Consumer products companies want to move forward, but in many cases, their strategies, priorities and actions are being viewed through a historical lens. Even in the best of times, that approach is flawed — and now, in response to COVID-19, it’s fatally flawed.
New EY research shows the extent to which the pandemic has upended the sector. But with one framework based on three questions, you can begin shaping a strategy to turn the new normal into new possibilities for growth.
Looking beyond COVID-19
The EY Future Consumer Index forecasts significant change in consumer attitudes and behaviors, which you can delve into in greater depth here. One area sticks out as especially crucial to explore: what customers say they will do when the crisis is over. This provides the forward-looking lens through which you can set your strategies, priorities and actions for 2021, revealing to what extent the habits of the past several months become ingrained or are cast aside.
Such responses might indicate a desire to return to normal — but when will “normal” arrive? Not in one defined time span, customers tell us. Their perceptions vary significantly by type of activity, believing that it will likely take months or in some cases years for a full return.
Consumer products companies therefore need to identify, understand and develop actionable insights regarding specific changes in consumer attitudes and behaviors.
Naturally, consumers say they want to return to what they perceive as normal, but the reality of the COVID-19 crisis has made them reluctant to re-engage with their normal activities. To what extent can you close the gap between their desires and their fears, and accelerate the timeline to normalcy, while catering to behaviors that have been fundamentally changed? Perhaps you see the challenges more clearly than the opportunities in your forward-looking lens. Here’s how to develop actionable insights in a simple framework.
Three questions to ask
To be best positioned to win, consumer products companies should work with leading retailers to enable shopping experiences that are best aligned with consumer attitudes for the post-pandemic world. By thinking through these questions, you can determine what course of action to take that best suits your company and the markets you compete in:
- Today or tomorrow: Is this just a current reality due to necessity, or could this extend into the future, in total or partially?
- Control or influence: To what degree is the situation within your control, and to what degree can you influence it?
- Risk or opportunity: What is the potential risk or opportunity?
Get out a piece of paper or draw on a whiteboard, and write down rows of how consumer attitudes, habits and practices have changed. Then arrange the questions above as columns and start pondering your answers. Here is how it works:
The change: Consumers are seeking increased security, control and safety. Contactless payments have therefore become more popular, as they reduce potential transmission of the virus.
Both. While adoption might decelerate as COVID-19 fears ease, frictionless payment is likely to have staying power.
Risk. If the shopping experience isn’t fully aligned with expectations, and/or brands are not seen as embracing the shift, consumers may stay home or shop elsewhere.
The change: Shopping habits and practices are broadly different today. For instance, shoppers are buying larger pack sizes or more of the item at a time, and they’re trying new products because their coveted brands are more likely to be out of stock. They are also embracing subscription models and non-brick-and-mortar channels.
Both. Assess each change: is the shift to larger pack sizes in response to supply chain disruption, which has led to decreased on-shelf availability of other pack sizes? Or is it because they fear shortages, based on their COVID-19 experiences — in which case, the behavior could persist?
Both, depending on how each change could impact a brand, as well as a brand’s shopping experience.
The change: In-store experiences have been impacted significantly in most traditional retail formats, including one-way aisles to increase social distancing, increased use of self-checkout and plexiglass within checkout lines.
Tomorrow. While few believe such tactics employed today in response to COVID-19 are likely to remain, the in-store experience will change.
Influence. As they make decisions regarding store layouts, retailers are seeking manufacturing partners that are anticipating new regulations and have developed actionable insights regarding shopping habits and practices.
Both. If your brand is impacted by impulse sales, the risk could be significant. The opportunity is to rethink traditional tactics for impulse sales — including checkout placement, display in high-traffic areas or within specific categories, sampling, demonstrations, in-store presence such as signage — and collaborate with retailers in activating reimagined in-store experiences.
In the COVID-19 now, next and beyond, consumer products companies will operate in a reality in which “normal” is the stated desire of consumers, but what will “normal” look like for you, now that their attitudes and behaviors have in some cases been turned upside-down? Organizations will need to pivot, if not transform, to adapt beyond COVID-19.
This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Member firms of the global EY organization cannot accept responsibility for loss to any person relying on this article.