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COVID-19 and What It Means for Shopping

COVID-19 is changing the way people shop. How can brands stay irresistible when the shopping journey is radically changing?

The U.S. is experiencing an unparalleled pandemic, and people are realizing that day-to-day life is going to radically change for a while. As a new American reality of working from home (often with kids underfoot), avoidance of public spaces (including shops, restaurants and bars), financial upheaval in the markets, and social distancing take effect, we’ve been thinking about the potential long-term effects on shopping and retailers—and what brands can do to remain irresistible through the pandemic, and beyond.

Nielsen has published six consumer behaviors it has observed since the COVID-19 outbreak. As word of the epidemic has spread, many consumers are skipping straight to the third stage, “Pantry Preparation,” leading to out-of-stock items and unanticipated supply chain issues at the retail level.

Nielsen Threshold

Data from Numerator also shows notable shifts in shopper spending in the U.S. over the past eight weeks—with spikes in Health channels, Gas and Convenience, Dollar and Online as “Pantry Prep” began in earnest.

Retail Index

Shoppers Shift Priorities and Definitions in a Time of Crisis
To drive conversion at shelf, brands must first identify potential shopper resistance and create methods to overcome it. But what does it mean when shopper resistance suddenly, and dramatically, changes?

Last month “health” for many people likely meant proactive lifestyle considerations like Organic, Natural, GMO-free. Now, the priority is far more preventative, short-term and foundational. In other words, “health” as a decision screener at this moment is more about keeping oneself and one’s family alive—indisputably germ-free and with guaranteed comfort and relief in the event of illness. For product categories and choices, the result is a return to back-to-basics, tried-and-true products. Think non-perishable canned goods, age-old cold and flu remedies and hard-core cleaners over the raw, free-range, all-natural, sustainably sourced set.

Implication: Brands need to think about how to draw on their brand purpose and redefine USPs in a way that’s relevant to people’s needs in this time of crisis. How can Dunkin’ keep America Running? How does Coca-Cola help people continue to Open Happiness when stressed?

Short-Term Shifts in Shopping Behaviors May Result in Sustained Ones
The call for "social distancing" is prompting people to intentionally limit exposure to public gathering spaces, making e-commerce business models more attractive—and necessary—options for the coming months. Already by late February, more shoppers were buying online, up 30% compared to a year ago, and there were 16% more trips online per household during that same time . As COVID-19 intensifies, so too will digital commerce.

Until now, even with the rise of technological advancements in retail in recent years, online fulfillment has still only accounted for 3% of grocery sales and 2% of grocery trips—despite growing more than 25% in 2019. But as more shoppers turn to digital fulfillment options during COVID-19, current behavior changes may impact grocery shopping actions significantly in the long term.

It’s the kind of trend we’ve seen before, when the recession in the late 2000’s brought new households into private label brands, and many stayed. It's probable that we’ll see an up-tick among OLG tiers, given high-levels of satisfaction and repeat behavior—especially considering the proliferation of digital fulfillment methods, including curbside pick-up, home delivery, in-store pick-up. Some shoppers will find new solutions that work for them, at least on occasion.

The one caveat comes in light of the current times’ heightened demand. If shoppers experience some of the perceived barriers that have limited OLG adoption to date—out of stocks, inconsistent fulfillment, concerns over fresh food quality, learning a new technology—they may readily return to pre-COVID-19 behaviors.

Implication: The magnitude of the sustained shift online will likely come down to the experience retailers deliver to new and light OLG shoppers. To that end, how can retailers and marketers help to ensure that the OLG experience is a good one for first time shoppers? Can brands help shoppers understand where their products are currently in-stock? Can retailers offer pseudo-drive-through lanes with shelf-to-trunk delivery?

Shoppers Are Searching for Relief During These Tense Times
As the U.S. seeks to slow the spread of the coronavirus, people are hunkered down in their homes indefinitely and spending 24/7 with loved ones and roomies. It’s an adjustment that will challenge people’s comfort and likely put a strain on all of us in some way. But what if the brands that live in our pantries, refrigerators and living rooms could actually provide purpose that goes beyond utilitarian benefits?

Boredom will undoubtedly become a big issue in many American households. Which means there’s an opportunity for brands to alleviate it. For kids, this may mean driving new uses and fun ways to interact with products—like MilkPEP’s ‘messing with your milk’ effort, or Dixie paper products’ line of plates that transform into art projects.

Milk-Dixie

Similarly, for shelf stable products (like macaroni and cheese, beans, canned goods), brands can help households come up with ideas for new ways to combine these food items to make different types of meals each day, or creative ways for infusing fun into meal occasions. Wacky food Wednesdays, anyone?

Implication: Creating new use cases and new content for familiar products can not only breathe new life into these brands, but can solve a relevant need for shoppers in a trying time.

Our Perspective
The old promotional playbook may not work in this evolved game. If people aren’t lingering in store aisles, it’s safe to assume the usual commerce-driving techniques—in-store demos, face-to-face sampling—may not be as effective. Same goes for promotional activity designed to drive trips or planned trade spend on things like soup and paper products when they are already flying off the shelves. So, what’s a marketer to do?

Marketing Advice

Follow the advice of chemist, Ilya Prigogine and get creative, meeting people where they are. If a brand can’t do in-store sampling and demos, how can they sample through click-and-collect, or demo through YouTube? How can promotional marketing dollars be used less to drive trips and more to solve problems for people, thus driving brand engagement? And when the pandemic is over and people have more than enough of our products lining their pantries, can brands encourage donation to stock the nation’s food pantries, thereby making this crisis have somewhat of a silver lining?

The only certainty about this time is the uncertainty that will be part of our world day-in and day-out until this pandemic has come to end. Brands are a constant in our lives and this time, more so than ever, they have the ability to insert themselves in meaningful ways that at the very least inject much needed comfort, joy and laughter into a trying time.

As a parting thought, we turn to another great man for inspiration. Leo Burnett once said that “What helps people, helps business.” We whole-heartedly agree, and are looking forward to using our creativity on behalf our clients and retail partners to keep brands irresistible while helping people through this crazy time.

March 20, 2020