COVID-19: Lessons learned from 2020 and their impact for marketers in 2021.
By C-K’s Brand Planning and PR/Social teams
While 2020 was described by many as the year from hell, it was also a surprisingly landmark year for brands as they were forced to reconsider consumer interactions.
As we embark on 2021 with a new U.S. president and a new administration, COVID-19 still looms large. And that’s not all. The recent deadly attack on the U.S. Capitol didn’t just leave Congress divided; the American public remains deeply fractured as well. Some brands are taking action. In the wake of the attack, Hallmark, not known for their political activism, has demanded accountability by pausing political contributions and asking for return of funds. As brands continue to walk a tightrope between corporate and consumer interests, brand loyalty is at stake. According to a recent study by McKinsey, 75% of consumers claimed to have changed brands at least once during the pandemic.
To help navigate the road ahead, we’ve distilled our 2020 learnings into tips for 2021. Below, you’ll find ideas on how brands can engage in political and cultural conversations as well as ideas on how to enhance and strengthen brand loyalty in this competitive marketplace.
1. Engaging in Cultural and Political Conversations
2020 was polarizing and emotionally charged, and brands have found it harder to stay out of cultural and political conversations. At C-K, we’ve always said brands are friends, and consumers have begun to judge brands more like people than corporations and are holding them accountable the same way they would a friend. A 2018 study found that consumers expect the same things from brands as they do of their friends: “reliability, authenticity, and the feeling like brands ‘get’ them and what’s important to them at this point in their lives.” As brands work to be part of the cultural conversation and build a personality, consumers in return will expect brands to have a point of view on the things that matter to them. This has only been heightened by the pandemic, Black Lives Matter protests, the 2020 election and more. While not every brand may need to weigh in on charged situations, they should expect consumers to continue to closely evaluate their brand relationships through a cultural (and sometimes political) lens.
What it means for brands/marketers:
Walk your talk
This is a time to look inward: at your brand purpose, employees, policies, internal initiatives and the beliefs that drive your company. Assess your ability to make a statement and make sure you have the legs to stand on before chiming in on a particular issue.
- During the peak of the Black Lives Matter protests during the summer of 2020, most brands felt compelled to make statements in support of the movement. However, many of those statements rang hollow for consumers. In particular, fast food brands received backlash for solidarity statements that consumers felt were in contrast with employment policies, such as those around wages and sick days, that disproportionately and negatively impact Black people and those of color.
Gauge your comfort for disruption
Speaking up on issues can be a high-stakes endeavor that may reward you with more loyal followers, but it can also lead to the loss of others as consumers are increasingly seeking value matches in the brands they support.
- Brands like Ben & Jerry’s have established clear values and beliefs and consistently take a stand on those issues. They rely on their fans to support them and, as such, they prioritize these fans over those who may push back against their brand beliefs. They are also willing to take some heat because they contend that their beliefs are key in driving brand loyalty.
- After riots at the Capitol, brands that typically steer clear of consumer-facing political statements began to pull donations from politicians who had voted to overturn the results of the election.
What it means for your audience:
Be continually curious about your consumers
As the world continues to change rapidly, so will consumer mindsets. It’s essential to remain a student of consumers’ beliefs, attitudes and pain points to evaluate how well your brand reflects your consumers. Look for opportunities to build deeper friendships by supporting and representing your consumers and their beliefs in the choices you make.
- While choosing to be involved in the political or cultural zeitgeist is a brand decision, you may face pressure from your consumers to partake. Over the summer, consumers, celebrities and nonprofits pushed brands to boycott Facebook to pressure the social media brand to stop hate from spreading across its platforms.
Don’t forget your growth targets
We’ve seen that younger consumers are more likely to seek out brands that reflect their values and may build or break their loyalty based on that. Additionally, consumers are increasingly becoming more diverse with every generation. Brands must begin to reflect that diversity. While you consider the attitudes and beliefs of your current core audience, be sure to not lose sight of those with growing purchase power that may continue to build your brand in the future.
- Gen Zers are more cause-driven consumers, and they expect brands to take stands on the issues that are important to them, with 66% saying that a tie to a social cause impacts the way they view a brand. Brands that establish clear stakes in the ground on values of diversity and equity and act on those values are the ones that will win with this generation.
- Haircare brand amika has shifted its marketing focus from individuality to inclusivity, spending their marketing budget to reflect how their products work across diverse hair types and textures. Their priority reflects the growing diversity of their consumer base and welcomes new users to the brand.
- When choosing whether your brand should weigh in on socially or politically charged issues, consider these questions:
- Does your internal culture reflect the views your brand is putting forth?
- Are your employees as diverse as the audience you want to attract?
- If you’re just getting started, is it because you’re looking to jump on the bandwagon of a cultural moment, or are you committed to consistently speaking up and sharing views?
- If you do want to be more involved in these types of conversations, don’t wait until the last minute to begin. Laying the groundwork before controversy arises rather than jumping on the bandwagon will build more authenticity and trust with your consumers.
- You don’t *have* to be a part of the cultural and political zeitgeist if that’s not what makes sense for your brand and target audience, but sometimes lines are crossed that make it harder to ignore. Have a plan in place when it makes sense to participate in cultural and political conversations.
2. Get Comfortable Being Uncomfortable/Flexibility
Just like people, brands are creatures of habit. Brands invest time and resources into developing a planning process to ensure their fiscal year is set up for success and learning which channels deliver ROI. However, 2020 forced brands to start getting comfortable with being uncomfortable. Instead of a clear planning process, brands and their agency partners were in constant planning mode, with rapidly changing marketplace conditions and evolving consumer insights. Shifting budgets and cost-cutting measures made it more difficult to continue with previously planned media mixes. Consumer media consumption habits and shopping behaviors changed, which forced brands to consider not only alternative paths to purchase, but new sales channels as well. While this brought challenges to brands, 53% of marketers believe 2020 created a willingness to try something new that will outlast the pandemic.
What it means for brands/marketers:
Flexibility is key
This could be applied to your internal processes as well as your product development and media choices. Creating an internal way of working that enables quick decision-making and speed to market can provide revenue-building opportunities and a competitive edge.
- Make sure you are working with partners who can adapt to change and are flexible in their buying approach, as 43% of marketers are considering more flexible media-buying approaches.
Don’t overlook traditional channels
Even while considering traditional channels, make sure you have a sound digital strategy. The marketplace has become more competitive, with a 65% increase in video ad spending and a 54% increase in social media spending.
Find ways to create greater convenience for your customers
Consider introducing or expanding your online presence to create convenience for your customer (this is not just limited to B2C). Seek out self-service platforms wherever possible for greater efficiencies. E-commerce trends won’t be going away and will expand to create online marketplaces across segments and products. The quicker you can get ahead of this surge, the bigger competitive advantage you’ll have.
What it means for your audience:
Your audience is becoming more digitally savvy
While this change in consumer behavior can be a benefit for brands as consumers are spending more time online with them, it also challenges brands to up their digital game.
Consumers are losing patience with subpar digital experiences and irrelevant advertising
Having quick webpage download times and a seamless mobile ad experience are now table stakes. Consumers are also becoming more critical of the ads they are served and are expecting a higher level of relevancy: 72% of consumers only engage with personalized messaging.
Consumers are curating their own media experiences as they determine the right mix between traditional channels and streaming and digital services
The expectation is the decisions they are making today will require traditional outlets to shift their strategy as consumers are creating the new normal, not media companies.
While overall social media consumption is up, the platform mix is shifting, and consumer usage trends are changing
Consumers aren’t just on social media; they’re engaging more on social media platforms. Consumers on social media are posting 43% more and 33% are paying more attention to how their posts are received. They’re also being more discerning with their social media platforms. Some platforms like TikTok, YouTube and Instagram are turning into entertainment escapes, while Facebook and Twitter are more likely to be avoided.
• Have a media reserve budget that allows you to pivot, change and experiment depending on how things shift. You need to be adaptable. Having a budget reserve ensures you can be flexible and try new things when your strategy needs to change.
• Build an internal structure and process that enable flexibility while also seeking partners that can aid in this goal.
• Be a student and keep tabs on the current landscape, but know how your brand performs best.
• Make sure your digital-owned channels are a seamless consumer experience and seek out opportunities to drive digital engagement with consumers.
• Be comfortable with decreasing your reliance on traditional channels, but if it makes sense, don’t ignore them. Tap into consumer insights to develop a relevant digital strategy that enables you to connect with your audiences on their terms.
3. Brand Loyalty
Many customers have changed their shopping habits during the pandemic. A McKinsey study found that 78% of U.S. consumers have switched stores, brands or the way they shop due to the pandemic. Some people are trying store brands because their favorite product is out of stock. Others have been forced to shop at different stores or shop online due to safety and are being exposed to different products and ways of buying. Regardless, as people have shopped in different ways and experienced new products, they are inevitably creating new loyalties. For many brands, this break in their coveted loyalty loop is a chance to create new friends out of a windfall of new customers. Keep in mind, making friends with new customers takes more than just a great product.
What it means for brands/marketers:
This is a moment of truth for brands
Loyalty is a combination of trust and confidence, which the pandemic is putting to the test. Establishing both requires brands to put consumers’ interests first and solve problems that are most detrimental to loyalty.
• According to a study from the Wharton School’s Baker Retailing Center and WisePlum, the most damaging problems experienced were a difficult returns process and a hard-to-navigate website or app, whereas the most frequent problems centered around the availability of products.
• If brands put their customers’ interests first by optimizing the basics – free returns, priority pick-ups, seamless customer experiences and finding other ways to help customers through this crisis – it will benefit the long-term health of the company.
• As consumers continue to stay at home and shop online, experts at Morgan Stanley predict e-commerce to grow 10% in 2021. For brands, this means beefing up an existing e-commerce strategy; this can put your brand years ahead of your competition. If no such strategy exists, significant investment should be made, as a growing number of consumers will likely maintain their preferences for digital transactions moving forward.
The necessity to limit the number of people in one place at one time has accelerated the shift to the “appointment economy”
The appointment economy, which has already been embraced by some restaurants (to manage wait times) and high-end retailers (to offer exclusive and bespoke experiences to those willing to pay a premium), is now being used across a wide variety of brands and experiences. It makes customer experiences more personal, convenient, and impactful. This shift is being driven by mobile technology, like apps and queue technology, which offer brands the ability, through data, to understand more about their customers’ needs, enhance their experience and cement loyalty.
• This shift is evident in a variety of big businesses. Starbucks has opened pickup-only stores, expanded curb-side pickup to 1,000 stores and built out separate pickup-only counters within existing locations. Other fast-food restaurants are following suit, with Chick-fil-A, Chipotle and McDonald’s opening takeout- and catering-only stores to fulfill the demand for takeout and delivery.
What it means for your audience:
The foundation on which loyal brands are built, trustworthiness, is starting to show cracks, and your customers will begin to notice if they haven’t already
• Whether by force or merely shifts in desire, consumers have been dabbling with other brands and/or private label. Brand loyalty has undoubtedly been threatened, with over 60% of consumers who switched brands during the pandemic planning to continue their branded behavior in a post-pandemic world. Those consumers who saw behind the curtain will need something more to push them back to their old favorites. They need commitment, customization and a serious dash of excellent service if they’re going to find their way back into your coveted loyalty loop.
Questioning branding: Consumers are beginning to drift away from brands and are increasingly gravitating to private label
Private label notched serious wins during the pandemic, and it is on track for continued success. Some 80% of customers who started using private label brands during the pandemic say they intend to continue once the COVID-19 crisis subsides. According to a recent McKinsey report, consumers are looking for value. If you can’t beat private label on price, what other ways can you deliver value that will be enticing to your customer base?
Personalization: Consumers old and new are increasingly conducting their shopping through digital means, while brick-and-mortar is forecast to fall 3.2%
As customers increasingly conduct their business online, loyalty can be harvested through efforts to personalize their digital experience. Consumers want the brands they interact with to know who they are, what they like and how they prefer to be served. Think about how your brand can add a personal touch in the digital marketplace.
Understanding your new audience: As consumers have switched their brand alliances either by force or by curiosity, brands need to educate themselves not only on who has left their loyalty loop and who is just beginning to circle the loop but how their mindset has shifted
Make the necessary shifts to your target audience and act appropriately in order to prioritize personalization.
When it comes to loyalty, it’s not all bad news
While many consumers drifted from brands throughout the past year, there were some brands whose investments into brand loyalty delivered them success. In a recent study, 25% of consumers say they are actually more brand loyal this year than last. As we’ve observed throughout the past year, brands who have focused on growing trust and consumer confidence reaped benefits throughout COVID-19 as consumers knew they could depend on them when they needed them the most.
Now is the time to look to the future. McKinsey states that during a downturn, “speed matters: it will not be enough for companies to recover revenues gradually as the crisis abates. They will need to fundamentally rethink their revenue profile, to position themselves for the long term and to get ahead of the competition.” Therefore, now is the time to invest in answering these tough questions:
- What moments in people’s lives can you improve via your offerings?
- Think beyond your solid product. New customers are expecting the red carpet and loyal customers are expecting that and a serious pat on the back.
- Where are the rough spots in your CX?
- Prioritize customer service and consumer connections in order to show your customers that you care.
- What new, improved and innovative offerings can you launch in the market now that will give you momentum as we come out of COVID-19?
- Think creatively about ways you can add value and further engage with your customer base.
- Forget what you knew about your customer and competition and check in with both. They have inevitably changed. You must understand how and preferably be ahead of them.