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May 2020

A Brave New World

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Finally, there’s a glint of light at the end of the lockdown tunnel – but what does life look like on the other side, and what does this mean for brands? Will we continue to live in “unprecedented times” or will the familiar gradually return?

“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten”1.  Bill Gates could have been talking about COVID-19 and its projected impact on society.

Headlines proclaiming “the end of the world as we know it” speak of irrevocable and immediate changes to consumer behaviour: the death of office working, public transport and even cities themselves.  But not all habits are created equal.

Two types of behaviour shifts have emerged from the crisis:

One is of complete transformation: the creation of new habits in response to the wider social and economic climate. These might be a reinvigorated sense of community spirit, the desire for simplicity or a prioritization of mindsets that support growth and gratification.

The other is the supercharged acceleration of emerging habits:  the raft of digital substitutions, the rise in crafting and creating, and continued growth in on-demand lifestyles.

Amid the current uncertainty, forecasting the nuances of change is tricky, even in the short term. However, it’s clear that now more than ever brands need to put people (not just “consumers”) first. With 55% claiming to be less happy compared to this time last year, with seeing family and friends the #1 priority post lockdown – it’s no surprise that consumers are placing a renewed emphasis on love, life and health2.

Research from System1 shows brands that demonstrate empathy, connection (to people and places) or a sense of the familiarity and comfort in nostalgia are those that are best received by audiences in the crisis3.

Although the uncertainty of lockdown is lifting, the long-term looms with uncertainty too. The recessionary market will see a shift to an era where the tropes of empathy, storytelling and emotional connection have heightened power in advertising. Understanding the emotional milestones coming out of lockdown represents a huge opportunity for brands to connect with audiences new and old.

As we look ahead, we can’t ignore the longer-term impact of recession. Once more the term unprecedented rears its head: much can be learned from previous recessions, but this is a recession unlike others.  Current economic turbulence is caused by changes to society and audience behaviour, rather than changes in the market having an impact on consumer behaviour. And the impact for consumer and category expected to be highly variable.

Previous recessions have seen the famous “lipstick effect” (large declines in big ticket items, are contrasted with high growth in affordable feel-good luxuries, like lipstick). But early research suggests that for many the financial pinch isn’t yet evident – 53% of Brits say they feel no difference to their level of comfort with current disposable income vs last year. In fact, locked up at home, some audience groups are instead saving more2. Will we then seen an initial boom in spend once lockdown lifts?  Equally, some discretionary goods and services often cut in a recession have become the mainstays of lockdown life – entertainment or health & fitness subscriptions for example.

It’s critical to scrutinise what’s different about this recession compared to the past – understanding the nuances in category, product and customer experience will signal where challenges and opportunities lie ahead. And with the pandemic shaking up most categories, expect a golden era for challenger brands that can take adapt and thrive in this brave new world.

So, whatever happens, as Mr Gates went onto say “…don’t let yourself be lulled into inaction”.

 

1Bill Gates, The Road Ahead, 1996

2the7stars, The QT, May 2020

3System1, A right-brain reset for advertisers, May 2020