Long-term Covid calls for some fresh thinking – and a splash of artificial intelligence
Moving from the early stages of any crisis to the next stage – the realisation that nothing is going to change any time soon – is a state affecting many people. But determining how this is going to affect businesses makes challenging reading, says Daniel Gunasekera.
He points to research from McKinsey that shows that optimism is declining as people realise Covid-19 is a long game.
McKinsey identify six trends in consumer sentiment and behaviours globally and while there are certainly differences by country and region, overall, these trends hold in all countries studied:
1. Despite pockets of reopening, net consumer optimism has decreased, and most consumers continue to expect a long-lasting impact from COVID-19. In fact, net optimism has declined in most countries in recent weeks. China and India remain the most optimistic, while Japan remains the least, and many countries in Europe have more consumers who are pessimistic about an economic recovery than are optimistic. Most consumers globally still expect COVID-19 to impact their routines for a long time to come, with 70 percent of consumers in hard-hit nations anticipating adjustments to their routines for four months or more. In most countries, consumers expect their finances to recover more quickly, though more than half of consumers in most countries still believe their finances will be impacted for four months or more.
2. As incomes have declined, consumers are spending on essentials and not discretionary categories, with some exceptions in South Korea and China. Consumers globally continue to see the impact of COVID-19 on their incomes, with those in Brazil, South Africa, and India most impacted. As a result, overall spending intent is down across two-thirds of countries surveyed.
Spending on groceries and at-home entertainment continues to show positive momentum, as it has since McKinsey first started measuring in mid-March. Today, consumers in more countries intend to increase spending on other basic categories, such as household supplies and personal care, as well. Chinese and South Korean consumers intend to spend more on select other categories: food takeout and delivery, snacks, skin care, non-food baby products, fitness and wellness, and gasoline. While overall spending intent on most discretionary categories remains negative, there is reduced pessimism about future spending on categories such as restaurants, restaurant delivery, apparel, footwear, and consumer electronics today versus in mid-March.
3. Consumers are shifting to online and digital solutions as well as reduced-contact channels to get goods and services. Intent to shop more online across categories is positive in several countries, including the US, India, South Korea, and Japan. In Europe and Latin America, intent to shop more online is lower. Across all countries measured, consumers are adopting and intensifying digital and reduced-contact ways of accessing products and services. As we look more granularly in the US, this digital trend is magnified for Gen Z and millennials and for higher-income consumers. Consumers’ stated intent to continue these behaviours varies across category. Some categories are gaining many new customers who intend to stick with the behaviour post-COVID-19, including online fitness and wellness apps, store curbside pickup, and physical telehealth. In contrast, consumers demonstrate less of an appetite to continue with other growing categories, including restaurant curb-side pickup, professional videoconferencing, mental telehealth, and remote learning for children.
4. Even though many countries have lifted stay-at-home restrictions, most consumers still feel the pull toward a “homebody economy.” Most consumers across countries still feel they are not back to “regular” out-of-home activities. However, with restrictions lifting in pockets around the globe, consumers in these areas are increasingly venturing outside their homes for select categories of activities. Most commonly, consumers want to shop, with nearly all consumers planning to shop for necessities out-of-home as soon as they can and roughly half planning to shop for non-necessities. In Europe and China, over 50 percent plan to leave home to get together with family. Aspirational activities remain dining at a restaurant or bar, a get together with friends, a visit to a hair or nail salon, or work outside the home across most countries. However, nervousness remains around travel, shopping at malls, or attending crowded indoor events. This is true of most countries.
5. Consumers want extra reassurance to resume day-to-day activities outside their homes. In order to feel comfortable engaging with out-of-home activities, most consumers are waiting for milestones beyond the lifting of governmental restrictions. Many consumers want the endorsement of medical authorities and the implementation of visible safety measures from stores, restaurants, and other indoor spaces. Others (around ten to 15 percent across most countries) are waiting for a vaccine before they feel comfortable going back to routines outside the home.
6. Consumers also want to see an ongoing emphasis on cleaning and safety. As consumers determine where to shop in-store, they are prioritizing cleaning and sanitization and are looking for the usage of masks and barriers. Physical distancing – while important – is less critical in most regions.
Re-evaluationg loyalty offerings
So what McKinsey is reporting is that consumers hope that things will improve, but have plans in place for if they might not.
But if this is the beginning of the long game, with no prospect of a return to our former lives any time soon, how should businesses be planning for the future?
Daniel Gunasekera, CEO and founder of Loyalty Boomerang believes now is the time for marketers to re-evaluate their loyalty offerings, and if they are not performing adequately in the new world then do something about it. He said: “Creating, or breathing new life into a loyalty programme doesn’t have to be expensive, time consuming or difficult. Using newly emerging technologies, including artificial technologies, and with a safe and compliant system that easily interacts with existing systems, it is possible to introduce customer loyalty offerings that can catapult a company from being a lagger to a front runner. It is a very cost effective use of time and resources.
Loyalty Boomerang links retailers to banks through a real time API. It helps retailers grow revenue through access to sophisticated real time data that links directly to a customer database. The technology is a capability multiplier that will increase the ROI on existing customer engagement strategies.
To find out more, contact Daniel at: