[column] Coronavirus: what should brands and retailers do next?

There is much uncertainty around Coronavirus and the impact it will have on brands and retailers. Each week we seem to see a new trend.

From stockpiling in hypermarkets to a surge of online shopping: from trying the new Direct-to-Consumer brands that flood our social media feeds with advertising to buying local – we’ve all indulged in new shopping habits. But what comes next? And what should brands and retailers do about it?

In amongst all the noise we see about how shoppers are changing behavior, it is sometimes hard to cut through. Which of these behaviors will stick?

How many shoppers will revert to their old shopping habits? How many will stick with their new shopping behavior? It is hard to tell, but there are some telling facts that are emerging. Shoppers have switched stores. Many have been forced to try new brands and products. And some of them seem to be sticking with their new found favorites.

Shoppers have changed behavior – sometime forever!

According to a recent McKinsey report based on food shoppers in Asia during and after Covid 19:

• Up to 50% of shoppers switched from their usual primary store. Up to 50% of those didn’t switch back. That is a potential of up to 25% of shoppers switching their primary grocery store!
• Up to 70% of shoppers have tried a new brand. Up to 20% of those haven’t switched back

So with some simple math, it is possible that up to 25% of shoppers have permanently switched their primary grocery store. And up to 14% of shoppers have switched brands and are sticking to their new choice!

This has stark implications for both brands and retailers. Whatever happens, at least some shoppers will be in different stores, buying different products. All of our plans will have to change. Our objectives must change. Our channel focus must change.

Focus on shoppers

Retailers need to work hard to work out which shoppers they have lost, and to understand how best to win them back. Likewise there is a huge opportunity for stores that have gained shoppers. How can we deliver such a great experience that they are likely to stay?

Manufacturers have a double challenge. Firstly there is a need to understand changes to shopper and channel dynamics: who now shops where, on which missions? How should we change our investment strategy to reflect this new reality. Secondly there is the brand dynamic. Which shoppers have we gained? Which have we lost? And how to keep those we’ve gained and win back those we might have lost.

A new way of working for a new era

These changes represent both threat and opportunity. Not everything will have changed. Much will remain the same. But enough will have changed to require us to change the way we plan and invest. We need faster, more agile planning approaches. We need to operate without the comfort of all the data we are used to. That means we need better collaboration between brands and retailers. We need plans that reflect on the changes to consumers, shoppers, brands and retailers. Arguably we needed this before, but that need has grown.

There are better ways of creating integrated plans for manufacturers and retailers. There are better ways of collaborative planning too. There are better ways of creating insights and bringing them to market. There are better ways of testing, trialing and measuring so we learn more, faster. If you’d like to learn more,

Dit blog is geschreven door Mike Anthony, Shopper Marketing Experts.

www.isminstituut.nl