“There are decades when nothing happens, and there are weeks when decades happen.”
(I’ve been waiting months to use this quote. It’s too bad it took a pandemic to afford me the opportunity.)
Lenin’s quote certainly captures the experience of the last eight weeks. So, Covid-19 happened and much has changed across our social, economic and cultural lives. Those of us who work in the CPG brand design space have seen a dramatic shift in what consumers value and how they shop during this pandemic. The outcome of every professional conversation related to how brands should respond consistently collides with the following questions:
There’s a generally accepted equation used by people who study such things, which states:
Yes, it makes sense, but these variables are so completely unknowable at the moment. We’re vulnerable to the whipsaw of wildly varied predictions from experts of all stripes. It’s exhausting! Eight weeks in, it might be a good time to call a speculative time-out, take stock of what we know, and consider what sensible actions we can take to ensure brands are doing the right things to weather the plague. Let’s start with what we know.
The world of CPG had already seen its fair share of change, thank you. Digital channels, consumer ratings and access to global supply chains meant that the barrier to entry for smaller, niche brands fell away. Categories got noisier and more interesting, blossoming new competitors daily. Established brands—unable to swat away the hail of digitally native entrants—saw their share of categories dissolve away. Over time, consumer giants snatched up many of the more interesting (or dangerous) brands of this new wave, all the while trying their hands at incubating homegrown ideas that experimented with various niches and business models. Most companies weathered the storm, and a “new normal” enveloped a sector that now sees more brands, less loyalty and shoppers with newfound willingness to buy everyday consumer goods online.
All the Kumbaya of a Zoom call tends to evaporate with a trip to the grocery store.
A common response to this pandemic is the search for historical analogs that might make sense of our present moment. One observation is that a crisis tends to weaken the status quo, clearing out cultural deadwood. I define “culture” simply as people and their evolving ways of living. When it comes to shopping for essentials, this crisis is accelerating behavioral shifts that were already in motion.
Counter to the “we’re all in this together” blather clogging our feeds, pandemics present a unique kind of threat. While an alien invasion may cause human solidarity and cohesion, disease is an instinctively repulsive phenomenon. We are the threat. All the Kumbaya of a Zoom call tends to evaporate with a trip to the grocery store. Maslow’s Hierarchy feels like a rickety ladder. Forget self-actualization, how about some safety? It’s no surprise then that people who previously never considered home delivery or click-and-collect are adopting new shopping behaviors to avoid the surreal dystopia of their local supermarket.
Ecomm penetration in grocery has quadrupled.
The change in behavior has been dramatic. Ecomm penetration in grocery has quadrupled, with order volume up 45+% in the last 30 days. Early April saw Walmart’s app knock off Amazon for the top spot in Apple’s App Store, introducing new digital consumers to a very different shopping environment. For starters, the channel switch has disrupted their grab-and-go shopping routines. The lack of “first choice availability” continues to be a barrier for many national brands, invariably resulting in store-brand replacement options up and down tiers.
This combination of unavailability and emerging price sensitivity has created a phenomenon retailers call forced trial. The result: over the last month, a whopping 25% of store-brand purchases were from first-time buyers. To quote one retailer: “Loyalty is out the window.” Kroger CEO Rodney McMullen recently predicted that its near-term trial of Kroger’s digital platform and the brands it promotes will settle into long-term behavior for many consumers. This could stick.
• The pandemic has minted a new cohort of digital consumers.
• In grocery, ecommerce is changing consumer behavior.
• Store brands enjoy the advantage.
Starting with the obvious, be in stock. Across categories, retailers are seeing availability as the biggest decision-driver, outranking both brand and price. Making radical changes to supply chains may not be in the cards for most CPGs, but reducing their breadth of offer should be on the table. Now is not the time to support a chipotle ranch dressing with a hint of lime. Ranch will do. Consumers are retrenching to the tried and true. Simplicity is good.
Be essential. This oft-used word of the pandemic encompasses much more than toilet paper and pasta. In a world where consumers are seeing a renewed value in expertise, this is the time for brands to remind people of the core attributes that made them “essential” to their lives. Being essential also means providing stability and comfort. Offering a respite from the anxiety of pandemic uncertainty, long-forgotten standbys are seeing a resurgence. (Congratulations, Little Debbie!)
We’re seeing availability as the biggest decision-driver, outranking both brand & price.
Be distinct. The intensified desire for expertise, stability and comfort are signals that even in a crisis, it’s not too late for brand-building. Now is the time for brands to dust off and double-down on their essence. What’s your gift to the world? Connection? Prestige? Mastery? Awe and wonder? These hardwired human desires are the core engines of preference in normal times and one of the few tools in your kit to create the mental availability needed to hack through the thicket of store brands awaiting new digital consumers. As a reminder, the strongest brands rebounded from the 2008 recession nine times faster than their competitors.
Multi-channel reach. Eying the trend toward digital commerce, analog brands have been experimenting around the edges with DTC and multi-channel strategies for years. As the trend hits the gas in the pandemic, so should their efforts to become more digital in their approach to running their business. Establishing DTC relationships allows brands to find brand loyalists, collect first-party data and use it for engagement, ad targeting and look-alike modeling. Showing up across channels requires a reassessment and crystallization of a brand’s expressive assets. Core assets like logo, color and tone of voice (yes, tone of voice) should be identified, intensified and used with discipline and consistency. Package design will need to be simplified to compete in mobile environments. Designers will need to become less precious with count sizes and key product information.
Social resonance. Finally, analog brands will have to get their social house in order. Digitally native brands have mastered this channel out of necessity, using it to gain consumer insights and provide real connection and value to their followers. Unfortunately, the Instagram feed of most analog brands has more in common with the coupon section of your mother’s newspaper than a state-of-the-art social media effort. Stop mailing it in.
Who knows? We know consumer behavior is changing, but the uncertainty regarding the permanence of the change is making us all a little neurotic. One thing we can count on is a more digital future, even for analog brands. The decisions they make during this pandemic will likely have a profound impact on their trajectories when the next version of “normal” emerges. Here’s to making good ones, because decades could happen in the next few weeks.