The COVID-19 Consumer
22nd May, 2020
There are some unique considerations as we emerge from shelter. Understanding the consumer will be critical in all marketing efforts. One thing which is an absolute: thinking “business as usual” is regrettably amiss of reality, and if anything, the next 6 to 18 months will be anything except for usual.
When considering the consumer, there are three mindset considerations post COVID-19 that should be considered carefully when preparing your message:
Obviously, health concerns are now at the top of the consumer’s mind; the wearing of masks, social distancing, washing hands, and using sanitizer have all become habitual. Typically, it takes about 66 days for someone to acquire a new habit without having to be persuaded. Therefore, it will naturally take a similar timeframe to return to a pre-COVID-19 state of mind. However, the twist is how long will it be before we return to the pre-COVID-19 era, thus the paradox is quite clear. Consequently, we will need to incorporate fluidity in our marketing messaging.
However, consumer safety is not just about health, it is about security and familiarity. Think back to the enormous surge shopping at grocery stores and big box wholesalers like Costco. Consumers panicked at the thought of shortages, hoarding food and toilet paper. However, they were quite picky on what to hoard: dry goods shelves were empty, but meat, poultry, frozen items, and perishable goods like produce and bread were by and large not as affected. The point is that consumers had a plan and thought long-term in their purchasing.
What is even more fascinating is the new consumer DIY mindset. Consumers are using their newfound spare time to bake, cook, sew, and even create their own home farms. For example, research agency Nielson reports that yeast purchases increased by 650% for week ending March 21st. Flour also became scarce and, possibly the biggest surprise (no not toilet paper), is seeds. Every seed company reported double to triple volume sales as Americans take to their secluded gardens and grow their own produce. Research firm NPD reported that small home appliances such as ice cream and pasta makers, juicers, and blenders rose 8% in March. It’s not just food; consumers are buying DIY nail kits, hairdressing equipment, and hair dye kits. Online communities have surfaced to support one another. With web traffic up by around 35% (according to Google), the availability of online courses and general information has only driven this “craze” forward.
While it is certainly true that many consumers are adopting DIY hobbies to pass the time, a large percentage will use their newfound skills once the shelter period is over as it’s fun and generally a cheaper option over buying from a store. However, there is a nuance here that should be understood if we are to market to the post COVID-19 [PC19] consumer. Again, its quite simple; by doing things themselves, consumers feel safest. It makes sense as consumers need to trust what they consume. Who better to trust than yourself when it comes to cooking and growing? As a result, a new mindset has emerged which forms part of the thought structure of the PC19 consumer.
Safety also means familiarity. While there are various consumer mindsets, in general the consumer is now risk-averse whether they survived quarantine infection-free or were indeed infected by COVID-19 and experienced the illness. There is an acute understanding of the power of a pandemic, thus, with some exceptions, they are less likely to try anything new for the foreseeable future. Consumers will be more likely to frequent their regular restaurants, however, expect new COVID-19 floorplans providing more space between tables and some value menu items which will be discussed shortly.
Most importantly is messaging. Check all of your menus and messaging, including your website, social media, restaurant signage, and all collateral, and ensure your communication is congruent with COVID-19 safety measures and lifestyle changes.
Some Wording Examples
Change wording to include familiar COVID-19 safety words and phrases like “sanitized,” “contact-free,” “COVID-19 safety compliant,” “safe delivery,” “contactless,” and “trained in social distancing measures”
Think about your graphics; consumers no longer want to see photos depicting rustic-style cooking where food is being hand massaged by tattooed chefs with long hair. They need to see chefs with masks, hats, limited staffed kitchens, and staff wearing gloves. It will pay to review all of your photos and switch out images that suggest potential unhygienic practices or anything that may put them at risk.
Most of all, be careful with humor. When in doubt, don’t use it in your messaging. The consumer is not in a good mood right now. Think of them as your long-term lover that just heard you had lunch with an ex. They want to believe in you, but they are deeply questioning their trust. Your job is to convince them to love and trust you again. We have all been there, so you should know what to do: just neverlie!
When thinking about the safety mindset, restaurants should rethink their customer experience. The removal of irritants and other stresses that may erode the confidence of already uneasy customers will go a long way in securing trust.
The word of the year in 2020 will without question be “compassion.” I am surprised it hasn’t been on the front of Time Magazine yet, but I am sure it will be before the end of the year. While the US remains polarized politically, compassion has still won the day at all levels of the national community. The enormous support for frontline retail workers through donations, gifts, and just gratitude has frankly been rare at such a large and unilateral scale. Healthcare employees have been singled out, quite rightfully, as today’s heroes and celebrated as such, again receiving praise and gratitude throughout the country.
It’s not just in vocational circles, but also at a community level. Americans have been supporting one another through social media and general social circles, taking turns to shop for one another, providing delivery services for COVID-19 to at-risk neighbors, and generally just caring.
A friend of mine said “basically the planet has just had enough and sent us back to our rooms so we can think about what we have done.” The result appears to have been positive at a social echelon at least. The unique manifestation of compassion has actually been both unique and enlightening; it’s as if we have all realized that being kind makes us feel better.
What do all of these newfound fuzzy feelings mean from a marketing perspective? Well for starters, the consumer expects businesses to care about their employees, care about the environment, and certainly care about the consumer. This is non-negotiable in the consumer’s mind and will be elevated once quarantine has been lifted.
There is a reason that the world is hailing healthcare workers; it’s because they care. Businesses should learn from the medical world, which, in the US, is the impeccable synthesis of compassion, expertise, and, well, profits!
In the hospitality world, consumers will be expecting that their value structure will be accommodated, especially as they know our industry was hit hardest and we need their dollar. Quite what this looks like will be for brands to develop individually. An outpour of genuine and authentic care is a good starting point.
“No one has ever become poor by giving”
The consumer is poorer now than 3 months ago, and by a lot. As of April 16th, 2020, unemployment claims reached 22 million, thus around eighteen million workers became unemployed in a 4 week period. That does not account for the millions of gig workers, self-employed workers, and business owners who have been affected by the crisis and are seeking, or will be seeking, assistance. Equally worrying are the pending job layoffs as businesses rebudget to align with the adjusted economy. These layoffs will impact higher earning executives at a faster rate, creating further tension on unemployment and the economy.
Consumers have already begun to economize. Piper Sandler consumer spending survey (4/13/20)reported the following:
53% - spending less
50% - increased online shopping
67% - more likely to cook at home; more than prior (not great for restaurants)
85% - reported some type of change in prior shopping habits
88% - stated belief that the virus will have some level of disruption to their lives
Not to make you feel worse, but as we were writing this book (Version 1), the Census Bureau released March 2020 Retail Sales data which showed a decline of 8.7%. This is the largest fall in history and triple the worst month on record from the fall of 2008. Given the country didn’t really react to the Coronavirus until the 2ndweek in March, the decline curve is worse than 8.7%. Needless to say, there were variations across all categories: grocery stores saw a 27% surge as people shifted from foodservice to cooking at home while restaurants experienced a 26.5% decline.
Given the unique situation in which we find ourselves, I would recommend taking the pulse of your customers through customer research by asking questions about what matters most to them and then adapting your menu accordingly. This can be executed inexpensively by working with online survey sites such as Survey Monkey. Alternatively, there are many research firms for hire. I like Big Mouth Survey,I find them well-balanced between cost and providing technology that generates informative data that assists businesses in improving the customer experience, workplace happiness, and bottom line profitability. There are of course other options and a quick online search will generate a range of potential providers with various cost structures.
Whatever your approach, I believe it is reasonable to assume that restaurants need to think in value terms for the next 12-18 months. I recommend exploring strategies that will present your brand as appealing from a value perspective. While many will understandably adopt this approach, I am not suggesting heavy discounting; instead, evaluate your menu and consider cheaper cost dishes that maintain a healthy margin. Consider family meals and the like.
Position your menu to reflect some economy meals while maintaining your brand values and signature items. Just a note, some restaurants address cost by reducing portion sizes; this has backfired in multiple instances as customers identify the lower amount of food. The same portion size consisting of lower cost but good quality ingredients is normally the most successful direction in economy-driven times.
A proven method to orient the menu price visibility and perception is menu engineering. Sometimes called “menu psychology,” the term is generally adopted as a standard Best Practice within the Hospitality and Restaurant industries. The objective of menu engineering is to maximize a concept’s profitability by leading the customer to certain purchases and avoiding others in addition to “engineering” recipes to maximize profits at product and category level.
Finally, it is all about the message. Think about what the customer wants to hear right now. Make sure above all they know that you care and remember there is no substitute for great hospitality!
Author of Post Covid-19 Reboot, Experts’ guide to reopening your restaurant business post COVID-19
CEO of The Next Idea Group
Incept from book Post COVID-19 Reboot – available at: https://postcovid19reboot.com