The COVID-19 pandemic has reshaped the way we shop. For companies, many saw their expectations to grow replaced with struggle to survive. Meanwhile, others meet spikes in consumer demand. Shopping channels have also changed. E-Commerce and omnichannel grocers are benefitted a great deal compared to restaurants and food-service companies.
Now more than ever, companies have to analyze the changes that are happening, such as the change in consumer preferences, adjusting strategies, and be open to change. Consumer Packaged Goods (CPG) companies have to be ready to adapt at any time. They also have to ensure that they can win the next normal and adopt the agile decision making that helped them survive in the first stages of the pandemic.
The New Normal
With the pandemic, we see the change in our lifestyle. The lockdowns happening all over the world forced customers to adjust their routine and purchasing habits. The research done by McKinsey pointed out the changes happen across 8 categories of one’s life.
Life’s at home
During lockdown, home has become a place for every activitiy – from coffee shop to gyms – increasing in-home activities. In the first wave of lockdown, they see that people are increasing their spending on at-home categories. On top of that, the closing of shops also forced people to change their shopping habits. More than ever, customers are starting to shop for groceries online. Globally, everyone turns into online sources for shopping, entertainment, learning, and communication.
Shopping and consumption.
Customers have also started to decrease their overall spending and consumption during this new normal. More customers have also stated that they have switched from their preferred brands and retailers to new brands and they expect to make the switches permanent.
Health and Well-Being
It is no surprise that consumer spending has increased in health and hygiene. With increased awareness on personal health, customers have also started to buy products from brands they have never considered before.
Communication and Information
Another category that experience high increase is communication and information. With people being forced to stay home, there is a shift in how they consume media. More and more people are using social media, TV, and radio as form of entertainment. Companies have to adjust their marketing campaign from in-person strategy to all digitals. On top of that customers are also more drawn to brands with active response to the COVID-19 outbreak. It is important for brands to communicate their effort in helping others during this challenging time.
The economic downturn has resulted in unemployment as well as disruption of traditional business environments. With more companies embracing remote working, there is a rise in spending of collaboration tools and home office items.
These are the eight areas that FMCG companies have to be mindful of in strategizing and planning their future marketing plan.
Winning Formula For The New Normal
To win in the new normal, FMCG companies should follow the following processes: predict, rebound and transform, and sustain.
Predict consumer demand
Companies need data and analytics to accurately forecast demand across product segments. Although, understandably, this is proven to be accurate due to the ever changing situation all over the world.
Customers responses to the pandemic have made demand more difficult to be predicted accurately. The spikes in certain categories during the beginning of the pandemic is mostly caused by the preparation for shortages, but it does not mean that they consume everything right away. Companies should use this kind of data to recognize these patterns and plan for a potential new waves of outbreak.
As a general rule, FMCG companies should develop robust short and long term plan for their brands. This can be done through research and digital engagement data. Brands should also be active on social media and do social listening to gauge what the consumers are saying about topics and products related to their category.
Rebound and transform
To answer the customers’ needs, companies might need to realign their product portfolios and innovation. Knowing what the customers need and create products that answer those needs will be very beneficial for the companies.
Not only the products themselves, company also need to adapt in terms of marketing. It was mentioned earlier that brands that demonstrate empathy and how their products can provide comfort and security will most likely be chosen by the customers. Customers are also more likely to stay loyal to those brands who help others during the pandemic. This can be one way for companies to gain new customers and ensure loyalty from their existed customers.
The increase in social media can also provide company with the opportunity to cut spending on TV ads while increasing engagement on social media. Speak to your customers through their preferred channels and address their current needs with the right tone, language, and brand promise.
To top it off, companies need a holistic omnichannel sales strategy. In the new normal, sales employees will have to embrace faster decision making and increase omnichannel partnerships to respond to the changes in shopping behaviour, such as increased digital usage. It is important to determine how to serve everyone from different audience groups.
Sustain their performance
The pandemic force companies to accelerate their operations and decision making. While we used to have the luxury of time in planning and making decisions, now everything has to be decided in weeks or days. The agile operating model will change the ways of working to achieve better outcomes. This can also help to sustain their performance in responding to the customers’ needs in real time.