Beer kegs collect dust, abandoned and untapped. Elliptical exercises stay silent without their usual sweat. Pots and pans hang on hooks in dark restaurants. The past year has seen businesses in many industries shut down, open with restrictions, and then shut down again for good as countries navigate the global health crisis.
A central question on the minds of marketers throughout all of this is: How many changes in consumer behavior will become a habit, and how many will disappear as soon as Covid-19 does? Knowing what will last helps determine where to allocate advertising funds.
While the answer, like any prediction, can be elusive, a good place to start is housekeeping. Since the virus outbreak, governments have shut down everything from offices to schools to restaurants, forcing people to restructure their lives at home. The result has changed not only what buyers buy, but also when, where, how and why they buy it.
The grocery store goes online
A new drive to buy basic consumer goods through digital channels has accelerated change for retailers and manufacturers. In April, American adults spent 235% more on online groceries compared to the same period in 2019, according to data analysis firm Earnest Research. Purchasing activity has remained high since.
“We can expect online grocery shopping to continue at rates above pre-pandemic levels, with many pandemic followers now relishing its convenience, even in a post-vaccine world,” said Corey Chafin, director of consumer industries and retail at the consulting firm Kearney.
CPG giant General Mills saw its e-commerce business drop from 5% of total sales 18 months ago to 10% last quarter. In response, the Minnesota-based company’s marketing spend follows online shoppers.
“Our actions will rely heavily on how consumer needs are changing and the transforming role food plays around those needs,” said Jeanine Bassett, vice president of consumer and market intelligence at General Mills.
The rise of home cooking, for example, has presented CPG companies with a void to fill. General Mills has been busy posting recipes for home bakers – who are home with their ovens all the time now – on websites for brands like Pillsbury and Betty Crocker. Together, the two sites receive 7 million unique visitors per month and have seen a 91% increase among 18-24 year olds since the start of the pandemic.
“No matter where you are on the spectrum, someone needs help with something,” Bassett said.
Everything at home
The pandemic has disrupted more than just the food industry. With limited activities outside the home, athletics is now always in season. In its latest quarterly earnings release, Lululemon said year-over-year revenue rose 22% to $ 1.1 billion. Its Direct-to-Consumer (DTC) unit also jumped 94% compared to the same period in 2019.
Nikki Neuburger, brand director at Lululemon, said she expects the shift to exercise at home, with a deeper focus on physical, mental and social well-being, will place the mark of sportswear in a better position for the future. It is also building its capacity, following the acquisition of home fitness start-up Mirror for $ 500 million.
“We’re confident in the expanded portfolio of experiences we now offer, from our digital educator service and Instagram Live meditations to Mirror home workouts,” said Neuburger.
The lack of live concerts and movie theaters during the lockdown amplified the opportunity for brands to act more like publishers than pushers of a particular product, according to Richard Oppy, vice president of global brands at Anheuser-Busch InBev. Oppy said that brands “need more to entertain than to interrupt.”