We asked two top market research practitioners: NielsenIQ Managing Director for Myanmar, Vietnam and Philippines Patrick Cua, and Kantar Philippines President Gary de Ocampo, to share about consumer behaviors which they have encoded in 2021 and their implications in 2022. Here are their views:
Q1: What key changes in consumer behavior have you encoded during the pandemic that were hardly mentioned in the past or newly observed on second look? Are there patterns that can be assigned or exclusive to age or generations as a way of explaining the changes?
Cua: At the onset of the pandemic, many consumers were impacted financially which led to two distinct consumers groups: Insulated vs Constrained. With the extended impact and longer recovery, there is a segment called Newly Constrained added to the Existing Constrained Shoppers. In our study done in Q2 2021, total Constrained shoppers make up 90% of Filipino households. Newly constrained shoppers are watching their daily spend more closely and look to drop or minimize their discretionary spend. Brand loyalty for the constrained are continually tested. Shoppers will not automatically switch to a cheaper challenger brand. The shopper’s decision tree is more complex and will depend on their relationship with the category. For example, food has become an important expression of care for the family and switching ingredient brands or trying new products, if untested, will take time, to ensure that the dishes continue to taste great.
De Ocampo: With the huge amount of consumer behavior monitoring, there is hardly any consumer behavior trend that has escaped the industry’s notice. If anything, I think the learning on second look is that the level of anxiety of people about COVID-19 and their frustration with the government’s response to the crisis do not apply to the same extent to all aspects of consumers’ lives, and these responses also vary across demographic groups.
For example, there is an observation that the white-collar mature worker segment in general seems to have coped better with the 100% work from home arrangement, which was not the expectation at the start, especially with the younger group displaying agility in moving use of tech from the workplace to the homes. When mental health issues started coming up due to the protracted quarantine situation, it was the more senior who demonstrated stronger resiliency, especially after they have gotten around the technological learning curve.
As a result, we have more from the younger group, in their urge to deal with lockdown stress, who have thrown their cares out of the window to venture out of their homes either to go back to their workplaces or for entertainment in malls and other places of leisure. Some even added their number to the Great Resignation. This is not to say that the more senior do not experience lockdown fatigue, but they tend to be relatively “more cool” about it – still wanting to continue with the WFH arrangement and simply step out of the safety of their houses to be entertained outdoors. Hence, the situation now seems to be evolving differently from pre-COVID when the youngsters insisted more on having the flexibility of working offsite more than onsite.
We do not know, of course, how this will evolve further as more offices welcome – some compel – their workers back to the offices.
These dispositions and behaviors also vary across socio-economic classes and genders with indications that the lower classes have been up and about much earlier than the middle and upper classes despite the issue of transportation. More females have already been out of the houses than males. Again, these things are happening as we speak, and there is no conclusion yet being made about whether these trends will continue or not.
As we can imagine, these behavioral trends, even if they later on prove to be short-lived, are already having impact on businesses. For example, after the initial higher surge in using ecommerce among the younger segment, the more senior have now followed suit with the middle-aged now the primary group making the most number and most valuable online purchases. Another is that, this year so far, has posted higher growth in the number of buyers in traditional trade (sari-sari stores) than in modern proximity stores (convenience stores) and hypermarkets. However, as expected, growth in spending vs last year is higher in the latter than in the former, presumably because of the difference in the economic profiles of their customers.
Q2: Which pre pandemic consumer behavior will likely return in 2022 and why?
Cua: Several behavioral resets experienced will revert to pre-pandemic.
Basket reset (Where they buy). Due to safety reasons, shoppers buy near them, around their neighborhood stores. Supermarkets remain an important channel of purchase. More than just for bulk buying during payday weekends, shoppers are projected to revert back to visiting this channel with their families for leisurely shopping bonding and entertainment.
Homebody reset (Where they consume). People will spend more time out of home as mobility restrictions ease. During the height of the lockdowns, in-home consumption led to the de-prioritization of snacks and on-premise beverages in favor of healthier alternatives that can be enjoyed by the whole family. Adults will once again be able to socialize and hang out while enjoying their favorite on-premise beverages. Children will have more power to choose their favorite snacks and drinks. Once more workers return to offices and children go back to schools, we can expect snacking to be re-defined again.
Rationale Reset (Why they buy). As most stayed at home, there was less of a need to bathe, change clothes, and wear nice clothes that smell good. When people start to go out more, the needs for feelings of belonging and self-esteem will again reign supreme. we can expect more people to care more about their physical appearances again.
De Ocampo: In 2020, we already reported indications of a growing tension between wanting to be safe inside houses, and stepping out to socialize and be entertained. That battle seems to have already tipped in favor of the latter. We can already see throngs of people back in the malls, sometimes without face masks and often without regard for the supposed social distancing requirements. When a public park is opened, we see massive crowds rush to it. Vehicles are back to their usual painful crawl. People are already out and about as they give in to pent-up emotions, further encouraged by news of declining number of confirmed cases of infection and hospitalization.
Hence, barring any new lockdowns due to the Omicron and new variants, no one should be surprised when people will largely be back to their pre-pandemic behaviors in 2022.
There are, of course, some limitations to these because a crisis like COVID-19 cannot be without longer-lasting impact. These behaviors will inevitably be tempered by certain security measures such as the requirement for vaccination cards in some establishments, maximum number of people allowed in the premises, the use of face masks, and other measures.
Q3: Which pandemic consumer behavior will stay in 2022 and why?
• With the pandemic, the speed of e-commerce growth accelerated to new levels. Many tried it out of necessity and found that they liked it. Shoppers saw that the benefits outweighed the prior concerns related to trust, safety of transactions and product quality. Platforms also took advantage by launching more innovation to make online shopping more convenient and even sometimes cheaper for shoppers. An omni-channel approach will evolve moving forward.
• When dining options were limited, restaurants innovated to offer food delivery to homes. Shoppers can now enjoy the same quality food that they crave for, in the comfort of their own homes. The RTE meal category will see continued growth and be available from their favorite restaurants, delivery platforms and supermarkets.
• With new COVID variants in the news, concern for hygiene and cleanliness will also remain. People will continue to be concerned about their health and wellness. They will continue to wear masks, wash their hands and spray rubbing alcohol, and keep their home disinfected.
De Ocampo: While we believe the issue about hygiene will remain to be a primary influence on behaviors, we do see many people forgetting to rub alcohol in their hands, putting on their face masks and keeping their distance from others when they are in public places. This is a curious subject matter that may warrant further investigation, but we charge this to fatigue at this point.
On the other hand, there are at least 3 others that we do not expect people to forget – 1) the convenience – and joy – of ecommerce, 2) some local (even community) brands can compete with global brands, and 3) and the productivity of working from home.
Now that even the more senior and even the lower-class consumers have learned and experienced ecommerce, their buying behaviors will continue to be influenced by it. Buying online will forever be a consideration in making purchases, especially that this channel has proven to be as entertaining and convenient, if not more, than brick and mortar.
The lockdown situation has given local brands, both in proximity stores and online, the opportunity to be known and experienced by consumers, and for the most part, the experience has been positive – from acceptable to delightful. The consideration set across several product and service categories has now become wider.
To varying extents, people who can do their work remotely will want to continue working from home after having proven beyond any doubt that they can be productive – arguably more productive – when doing work from their homes.
Q4: How should the marketing plan be different in 2022 than in previous years to respond to these changes?
Cua: There is a rapid evolution of consumer behavior influenced by the lifestyle change, an uncertain future and the impact of macro economic factors like inflation and supply chain disruption. Brands must create effective consumer engagement strategies in a radically transformed, post pandemic world. Brands should keep in mind 3 Cs:
Convenience. Consumer behaviors shift over time but we find that it always revolves around the need for convenience. Eating out, takeout, delivery are all different manifestations of convenience. At the start of the pandemic, convenience was having your product available on the shelf or delivered to the doorstep. Providing everyday convenience is helping the shopper perform their activities well: keeping their household clean, help them cook excellent food and enjoy entertainment safely.
Connected. As more consumers are online and buy online, having a digital presence is now a hygiene factor. New disciplines and activity systems must be in place for companies to be successful online. As shoppers become more discerning, brands must maintain a high quality digital shelf and eContent to convert traffic into sales.
Cost (Value for Money). The inflationary pressures will headline 2022. Constrained consumers will seek value for money. Brands must review their pricing strategy to ensure that it fits the intended target segments (price per pack or price per item) and have different price points to catch the Insulated vs Constrained shoppers. Promotions must be done carefully or brands run the risk of devaluing their portfolio.
De Ocampo: As increasingly more people become fatigued in keeping their hygiene practices, especially outside of their homes, it seems like the responsibility has been passed on to manufacturers, marketers, retailers and businesses in general. It then behooves us to keep this matter front and center in our plans even as it ebbs away from the consumers’ consciousness. How that will be different in the way you communicate and implement safety and hygiene measures is up to you as relevant to your industry and brand. Be reminded that this topic about hygiene is now in the sea of sameness, which is a situation for your brand to sink and be invisible in, or an opportunity to float and stand out in. One thing is for sure – it remains to be relevant. A key learning from this whole situation of two years is that public health is as much the business of business as it is of consumers.
If you are not yet into omnichannel marketing, then be worried because many of your consumers and customers already are. They are still far from being in the majority, but the trajectory is already clear. Obviously, ecommerce is critical, but do not forget the sustained rise of modern proximity or make the mistake of dismissing traditional trade. In executing your omnichannel plans, keep close monitor of where your consumer segments are. If current behaviors will continue, we could be seeing the youth and lower classes working in offices, while the more senior and affluent in their homes or elsewhere. How will that change your marketing plans – what, how and where to communicate and deliver?
If you are a local brand that has gained prominence during the lockdowns, you have a fantastic opportunity to sustain or expand that, but keep in mind the reason why people got attracted to you and loved you as a local or community brand in the first place.
Many global brands have caught up in their distribution to match local brands, but there are other aspects that have endeared these new players to your shared consumers. You will have to unpack and understand those for you to make your own defensive and offensive marketing actions. How will the rise of community brands change how you communicate and deliver your brand purpose to minimize your consumers’ polygamous behaviors? This is usually the reason why many of our clients work with us to reset their brand strategy, without changing their brand purpose, to ensure sustained relevance and achieve irrestibility with their consumers in the new milieu, which in several instances, has created new expectations from brands.
Josiah Go is Chairman and Chief Innovation Strategist of Mansmith and Fielders Inc.