COVID-19 Insights Leaders Roundtable: Edition 6

Lenny Murphy: So the first question is what’s changing in the industry as a result of COVID-19, business level, shifts in methodologies, new client priorities. So let’s start there to kind of level set on where things are now based on what you’re seeing in the industry itself. Adriana, what have you seen?

Adriana Rocha: Well, Lenny, what we’ve been seeing in the last two months actually, almost two months that maybe we have two groups of clients. For example, one of these groups I would say that other are kind of accelerating some type of studies and really rushing to being close to their customers and understanding all of the changes in their behaviors and what’s going on. So for example in Brazil, Itaú Unibanco, the largest bank in Brazil, so we work with them in agile marketing with this platform where they conduct their own study per week. So part of the studies also involve some face-to-face and offline in-person interactions and they quickly move everything to use the platforms.

We have other groups of clients that they’re just holding on and delaying some decisions and projects that will start in – so we’re seeing this due to type of clients and what I see is that thankfully nowadays, we have so many available platforms and use those tools. I imagine if this pandemic happened 10 years ago, it would be even worse for our industry for sure. So although it’s challenging times, I believe that we are in a really good spot to take advantage of all of the developments and involvements that we’ve been developing in the last 10, 15 years in terms of incorporating user platforms, new methodologies, and agile process to really conduct microbusiness in various ways. So I think I’m always on the optimistic side so I believe that we’re going to pass through all of this initial challenge but I think that we’ll be stronger as an industry when we pass this initial phase.

Lenny Murphy: Thank you. Pretty consistent what we’ve been hearing so far. Now since you used the A word, agile, then Matt, we’ll use that as a tag for you as well. So what are you seeing at GutCheck?

Matt Warta: I appreciate the prompt. I’m seeing a lot of what Adriana is seeing. There are these clients that I think entered into this and for whatever reasons, they’re freezing research right now and then there’s those that are being very proactive about it, they understand that there is a different environment now and nobody knows how long it’s going to last but they’re starting to plan around it. I think in times like this, one of the things that I’ve certainly seen in my career is that when you do have some recessionary or times like we’re seeing, there is a movement to faster, more efficient ways of doing things. So I think we’re definitely seeing that. I think seeing it in a couple of different buckets, one is things that are a little, not a little but reactionary to the times. So I think I saw some research that said about 50% of the ad buys out there right now are either creating net new creative or repurchasing existing creative to be more appropriate to the time. So when that’s happening, that’s driving a lot of need to make sure that messaging is on point, especially in these times. Then like Adriana was saying as well, there’s a lot of just consumer understanding work going on. I think there is certainly a camp of people that are seeing the consumer behaviors may change in some ways for a very long time to come and brands are trying to understand what that means. One of the things that we’ve seen is we work with the tech CPG, food and Bev primarily and a lot of what we’ve seen in the CPG and food and Bev side are clients that are doing really well as you might guess but also seeing a lot of new customers enter into their brands. So they’re trying to understand who these new consumers are if they’re going to be around for the long term and ways to keep them with their brands. So those are a couple of things that we’re seeing at GutCheck.

Lenny Murphy: That’s really helpful. Before we get to Dirk and Alex, one follow-up for Adriana and Matt. So CPG and food and beverage we totally get. Is there any other category, and either one of you jumps in here, that you’ve seen surprising engagements and maybe even growth from and any that they’re just dead in the water?

Matt Warta: Well, certainly we’ve got – we don’t have a lot of restaurants that we work with but we do work with one big company in that world. We’ve seen them do some freezing of work but that’s starting to come back online too as people are seeing that things are going to evolve and come back online. In a lot of these, even bigger brands that are restaurant-related, I think what we’re seeing is obviously Asia and China coming back online, so things opening up there. So they’re getting ready for that, doing work there and then I think that will evolve in North America as well.

Lenny Murphy: Adriana, anything on your end?

Adriana Rocha: No. Sorry, Lenny, I had a little bit of trouble with my audio. Can you please repeat the question?

Lenny Murphy: No worries. You mentioned fintech growing. Are there any other categories that you’ve noticed that actually are doing surprisingly well?

Adriana Rocha: Sure. Actually, for example, we work with NISLA in Brazil. They are the ones that join these other clients. Actually, this is something that I think it can be something that we’re going to see more in the future, Lenny, it could even be a trend is that applying some of the principles of both the sharing economy and large clients coming together to join the force. For example, we know that building community for large panels for end clients is always the challenge on how to keep in terms of long-term large community engagement. So imagine that we have this large company that says “Okay, our same customer that consumes the product, they are customers of my bank. So why not join together to be used, one large panel, and then we can develop studies together.” So that’s a very innovative initiative that we are helping these clients to develop in Brazil and also providing the tools for them to increase their do-it-yourself studies. So that’s what we are seeing. I’m not sure if you guys have seen that type of initiative in other parts of the world but I believe that it’s very unique and then can become in new times where we have to do more with less and apply agile principles and also better using a resource that could be wasted in all of – if you have thousands of people, being able to collaborate with different companies, why not? So that’s what we are seeing.

Lenny Murphy: That’s great. That’s a new one. So, Dirk, I think you have a pretty broad view. So what do you see?

Dirk Huisman: We have quite a global view. It’s first of all industry-specific. We have a couple of clients who completely are down, airline, fast food restaurants. They closed down also the budget almost but they still continue investing in long-term solutions. So there’s more time to think deeper to create new solutions. That’s one category. But okay, it’s really down by 50% and that’s the corona. Then you have a couple of groups who want a quick hit, want to understand the situation that’s fairly short fast, and the traditional ones really continue. If you take P&G, they don’t change anything. They really go for the insight and they have a long-term track and that’s fairly interesting. What we also find is that there’s a lot of concern. For instance, in our pricing practice, there was a lot of concern, is price sensitivity still feasible, etcetera. So what we did is the studies we conducted in January and February were all repeated in April. Amazingly, it gets the same sensitivity. That’s only in the middle of the crisis so people don’t change that fast, don’t extrapolate to the future. So the same sensitivities as before, only the first one, big exception, for small SKUs, the sensitivities, price sensitivities were really increasing significantly. For lots of SKUs, really the hoarding and the bundling and people bought big SKUs and were less price-sensitive for these SKUs. But for brands and price sensitivity, we didn’t see any change. But that’s as I said in the midst of the crisis. The real question is what will happen after the corona crash if really the economic situation went 25 million people are out of jobs, what will happen then with price sensitivity. So it’s a fascinating time to be in. Some clients are in a bad situation but okay, after a couple of months, they come back and are interested to learn so it’s fascinating to see what we’ll do in the future.

Lenny Murphy: Absolutely. That is interesting around the pricing. We’ll circle back around to that end of your statement about what does the future looks like because that absolutely is more interesting. So, Alex, you guys do so much around behavioral science, in particular around package testing. What are you seeing? What’s happening within PRS?

Alex Hunt: Very similar to what all of the other panelists have said really. The spin that I would place on it is that in many respects, it’s been one of the most uncertain times but the clients, they’ve improved what I would term the fairly predictable cycle for a crisis. We had several weeks where people were just freezing, perhaps overcorrecting in terms of work that they were looking into. We’re at that moment after the crisis recovery where clients are splitting up into two different camps. We see both of those in the two groups of clients that PRS IN VIVO worked with. On the one hand, we have a retail client who is definitely in continued distress and a continued state of pause. We also have our packaged goods clients who typically as much as it’s a little count, think of it this way, had a good “crisis.” Many of those brands have really seen the spurt in terms of sales and they’re really moving into a place where they still have the same fundamental questions and same fundamental needs that they need to sum up the ways we answer those 5 questions, changing slightly, perhaps permanently, perhaps temporarily.

There’s also a lot of foundational opportunities of those brands as well if you think back, any sort of foundational work that was done over the last 10 months. E-commerce, we spend a lot of time talking to our client advisory board. They tell us that eCommerce is really going to be the big new platform channel that packaged goods companies need to fully understand and it needs to be baked into all of that foundational work. So there’s a big opportunity in a lot of clients now leaning actually trying to understand the post-COVID world. It’s a predictable cycle and we’re now seeing a split between those sectors that are pretty heavy and affected for the long term and sectors that have outperformed at least in the past few months and are really looking, leaning into understanding the future.

Lenny Murphy: Gregg, any follow-up questions for you on where we are so far?

Gregg Archibald: No but I do want to come back to things in a few minutes that several people have said because there’s a lot of interesting stuff in these first several minutes of the conversation.

Lenny Murphy: So if I had to sum up what I heard, I’m interested in the stuff, and also definitely, this would become almost a tracking study if you will over the last few weeks. So a continuation of what we’ve been hearing and it’s actually comforting. So there’s some stability I think. We’re understanding the new normal and have some sense of how things are playing out. So that’s good. Now, I want to shift gears with that in mind and think about you as leaders in your businesses. So how are you adapting to the new normal, what do you think the implications are for your business specifically over the course of the next few weeks or months or whatever the timeline is? Actually, so Dirk, why don’t we go back to you and start with you this time?

Dirk Huisman: Amazingly, they have been virtual for 20 years I think. It’s a great opportunity. We see now, everything goes fast. Teleconferencing is now so accepted that it’s more efficient than it was five years ago and it will be more efficient in the future as well. But I think most simple and what was crucial in the past and that’s also for if I look at all the people in SKIM, independent where you’re working from, it’s from home, from a plane, from an airline, it is crucial that you keep the balance between 6 your private and your professional life. That is now in the same room and the same house. So that is a challenge but that is really challenging for the young people in our organization really to separate, okay, this is private, this is professional. If they don’t keep the balance and if they don’t shut down at the end of the day or in the midst of the day to do something with their kids, that is key that they really keep that balance. Because if you don’t have a balance, you suffer in your both lives. So that’s the best learning and that’s also the focus now internally for the people, really keep your balance.

Lenny Murphy: Well, that’s a long-time homeworker as well, hallelujah. I totally agree. My wife will probably say I do really badly at that. It’s definitely interesting now. We’ll just go kind of reverse order where we were. So Alex, what is…?

Gregg Archibald: Before you go there.

Lenny Murphy: Go ahead, Gregg.

Gregg Archibald: Do you have any kind of really specific recommendations like turn off the computer at 6:00 PM or do your latest dance craze at noon, anything that’s really specific around that idea of keeping balance?

Dirk Huisman: The key is to not always look at your screen and that mobile really, don’t look always at the screen when you’re trying to be private.

Gregg Archibald: That’s a good recommendation there. Lenny, I’ll turn it back to you.

Lenny Murphy: Yes. We’ve been limiting screen time for the kids as well. So adults need to do it too. So limit the screen time. Alex, how about you? How is PRS IN VIVO adapting, how have you adapted as leaders through all of this, any lessons or tips?

Alex Hunt: My personal recommendation is I’ve been taking a bike ride with my five-year-old every day… It’s not something you can do most of the rest of the time so you have to look hard at the positives and many of them – for PRS IN VIVO, it’s really been a massive experiment in working from home and really the key to that is communicate, communicate, communicate, have leadership meetings moved from 7 once a week to twice a week. I record a message for every Sunday before the start of every week so that we’re communicating essentially. That’s just been really, really important to be clear and transparent with everybody about what’s happening while we’re making decisions we’re making, what the success measurement is and how we’re progressing against those KPIs. So the communication has really been the big thing I think for us, I think we being a global organization. The final one is also local. It’s interesting how the crisis affects every country but it’s different in every country and the legal, the environment, and the level of distance and the way that clients are behaving is different in every location as well. So as much as it’s all about communication from the center, it’s also been a really, really inspiring time to watch all of our various different regional leaders step up and lead as well. So there are many, many positives as we’ve adapted in the past few weeks I think.

Lenny Murphy: Matt, how about you?

Matt Warta: Yes. I think a lot of the same things that Dirk and Alex mentioned. Like Alex, I’m doing a weekly screencast for folks. We’ve got a little over 100 people around the country. So it’s hard to pull everybody together obviously. So I do a weekly screencast and like Alex, getting the executive team together more often. So we do overcommunicate. We’re actually meeting every morning, we have the huddle every morning just to kick the day off to make sure all communicating well. Then I think the other word Alex used is transparency. I mean this is unsettling for anybody [Laughter] that’s going through this but especially if you haven’t gotten through something like this before, I think it could be really, really tough. So we’ve got a lot of folks at GutCheck that haven’t been through a recession like this before. So just trying to communicate, be transparent about what’s going on like Alex, using our leading indicators of where the business is going just so when we are making decisions, people know why we’re making the decisions that we’re making. Then the other thing that I’m a big believer in is that when you get into times like this, it’s not the time to change strategy necessarily. Especially if you have a long-term enduring one, it’s time to double down on it because I have seen in my career, those that get a little distracted and chase the opportunity at hand and lose sight of the strategy aren’t as in good a shape when the crisis ends. So we’ve been doubling down on our strategy and continuing to invest against it because we think it’s enduring over time.

Lenny Murphy: Go ahead.

Alex Hunt: I think one of the things he mentioned is really empathy for the staff. In the agency world, you have to remember that many of the staff were not working and do not have a professional memory of 2008 and 2009. Some of them don’t even remember, certainly weren’t working in 2001. So many of them have really just sort of grown-up professionally through good times. I do think that trying to provide the staff ad empathize that this is a change but crises do happen, bad things, they happen. The good thing is that they always end and really trying to give staff that perspective is important because they haven’t been through it before.

Lenny Murphy: Yes. That’s a good point. I think I would rather choose not to have to go through these things every 10 years which seems to be the pattern right now. It’s a useful experience, right, so we can share it with others. Adriana, how about you?

Adriana Rocha: Yes. So I’ve been a homeworker for almost 13 years now since I moved to the US so working with teams and having some type of communication and teamwork has been part of my daily routine. I agree with Dirk that how we engage in training all the younger and all the new generation, how they can separate and get organized and working at home in the remote teams and to not get distracted or working and playing computer games or being on social media all the time. I think that’s one learning I touch on with my kids is that it’s paying attention to how they are handling this new challenge of having class at home and how their teachers are using different tools and platforms to have these kids and to accomplish their tasks. So I think that’s interesting to learn with [Laughter] how schools are handling these, engaging the kids. So I’m seeing on my side for example great work for example where the teacher is using platforms such as Microsoft Teams to assign tasks, to follow all of the deadlines, and everything that they need to keep up. So one of my recommendations is since you have kids closer than ever all the time at home, it’s a good thing to watch them and see how they’re really adapting and learning to work remotely with your colleagues and teachers as well. So I think that’s something interesting that we could be all learning these days.

Lenny Murphy: Yes. Totally, the kid’s front has been interesting. Here locally, they seem to have adopted Google for Education which is basically Google Drive. As a parent trying to help my kids, I actually really appreciate it because I know what the hell I’m doing, right, so [Laughter] to navigate through that. So that’s been a little silver lining through all of this. So I think we’ve all talked a little bit about the – hearing out what does the future looks like. I think that’s where we are as an industry is a sort of turn our sights towards what’s next, whatever that is. So, Gregg, I’m going to tag you in and if you want to drive the conversation into that part of things, that’d be great.

Gregg Archibald: Well, thanks, Lenny. This has been brought up, a number of things have been brought up, changing consumer behavior, new customers. Dirk, I was really intrigued by your comments over the pricing study kind of done right before in the middle of this. So there’s a lot of questions out there of what do consumers look like, how does consumer behavior shift. It’s going to have some impact on our industry. So I wanted to get kind of a sense from this group of people what you anticipate happening over the course of the next 3, 6, 9, 12 months especially as we kind of think about the business issues that your clients are going to be facing. What’s going to be ramped up, what’s going to be dialed down? I’ll just pause for a minute to let someone self-select instead of calling out a name. We’ll see how that goes.

Alex Hunt: Well, I’m happy to go first. For me, this crisis is really just going to make the future happen quicker. Matt made a good point around if you have a great strategy, now is the time to just lean into it and double down. So for us, that’s the fundamentals which are going to be much more important and ever-important and that’s good news for the insights industry because clients are going to fundamentally want to understand their customers. Behavioral sciences is a core part of our strategy. We expect to see that sort of skill, consultancy skill much, much more in demand. The other element is a lot of organizations, a lot of clients, particularly I think in packaged goods, are going to accelerate the rate at which they are going to digitize particularly their sort of operations and their supply chain and the way that they deliver their products to consumers and market them to consumers. So again, digitization is a hugely important part of our strategy. We actually brought 10 forward last week the launch of our testing solution for e-commerce packaging. That again is a part of our strategy but it’s just going to be more and more important and be brought forward by this crisis really. So that’s what we’re anticipating.

Gregg Archibald: The idea of e-commerce and the digitization is huge. We’re seeing online sales go from representing 15% of sales to pushing 50% of sales. Are you pushing to the same degree as the consumers are pushing in that direction?

Alex Hunt: Absolutely. I mean I think that our role is very much to help our clients understand their consumers. Many of our clients, particularly in packaged goods, do actually when it comes to understanding the e-commerce channel. So very much we’re doubling down in that area. I think retail is actually a really good example of web digitization and cyber creating winners or forcing companies out of business. If you look at the companies in retail that thrive during this number and those that literally have filed for Chapter 11, you can almost correlate that exactly to the proportion of revenue that they get from their online sales. So again, it’s a crisis that’s exaggerating a trend that was already well underway.

Gregg Archibald: Dirk, you had mentioned that some of the foundational research, I believe it was you, it may actually have been Alex now that I about it, some of the foundational researches just shifted. Are you guys seeing clients kind of move back into some foundational research like segmentations or brand health studies or people kind of holding off on those waiting for a little bit more stabilization?

Dirk Huisman: We see clients now asking primary questions. So I fully agree with the observation of Alex of more fundamental research. That’s what is needed for the future. An interesting thing is that we talk about agility a lot. Fundamental research and agility are almost the same. It sounds silly but what is needed and what is the direction of the future we’re seeing is that the clients should become agile. The clients should develop the ability to think and understand and implement very quickly. It’s not quick delivery but it’s understanding. The only way to manage to understand is to do fundamental research. The need for fundamental research is also, there is the budget, the situation now because segmentation is extremely important. Because let’s say we have 20 segments. Now, 11 we have so many people out of work and so many changes, people going digital. The number of segments, they’ll multiply. So the need for micro-segmentation and understanding the consumer is really exploding or will be exploding. I don’t expect within a couple of months but in a couple of years, you will see that huge need to better understand what is happening with this consumer. What was normal in the past will be questioned. That’s why for research, there’s a great opportunity.

Gregg Archibald: So I have never heard it phrased that way, Dirk, that it’s not about fast knowledge, it’s about fast understanding and fundamental, foundational research allows you to get there and that’s exactly right. So I’ve made that note and I made a little star by it for me to remember that in the future.

Dirk Huisman: That’s ultimately our task. Ultimately, we have to help our clients implement as fast as possible. We can deliver fast but then if the bureaucracy takes another couple of months, it’s useless to deliver fast.

Gregg Archibald: So one of the things that has been brought up is the idea of clients needing this consulting to be able to help them understand how consumers have changed, what the data is saying to get a little bit deeper into helping them make that next decision. So Matt, are you guys changing anything to help your clients from your business model or how you’re interacting with clients now?

Matt Warta: Not really. I think it goes back to just continuing to focus on the strategy because I think it was working before and I think it’s very well-timed for what’s going on right now based – in large part on what Dirk and Alex were saying in that our clients do need to be more agile not only in terms of how they learn but in terms of how they activate. So I’ll pick up where they left off and just say that I do think that just the foundational work, we’ve seen pretty sturdy in our business through the first part of this year and we expect it to continue. This theme that Dirk was talking about in terms of micro segmentation is something that we saw going into this crisis and that I think he made a really good point that this is probably going to be an accelerant to see more of that going forward. I think our job as partners to these brands is to make agile work for them. So others on this call have a lot of experience doing that. So we will bring them the best practices and help them understand how to make it work within their organizations. Then I think the other 12 thing that they’re looking for is with their core partners, not just to leave it at an insight but really go to the next step and say “Hey, how do I actually go activate against this?” I think that’ll continue to push the insights industry to continue to up their game not in terms of just providing great insight but what to do next with that insight.

Gregg Archibald: We’ve heard throughout these roundtables a number of people say that they are having to take better advantage of their existing data because some of the priorities are shifting and some of the studies that they thought would be funded are not and just moving things around. How is everybody dealing with that if you are to bring in more third-party, client level kind of existing data to inform the new questions on their behalf?

Alex Hunt: I’m happy to answer at least from my perspective, Gregg, which is we genuinely haven’t really seen that. I’d say the two reasons. The first is if you look at the foundational part of our business, understanding shopper behavior, a lot of the old foundational work just simply doesn’t apply and a lot of that old data simply doesn’t apply. Clients can certainly look at trends but they’re trying to figure it out as they go and they need help and support in that role in that capacity. The other part of our business which is really about validating, it’s absolutely true that some previous databases can be incredibly valuable and in fact, we have an AI tool using our database for packaging for example which I guess would fall into usage of previous data but the big shift for our clients has been the emergence and the quick growth of the new channel. There is no historic data, there is no historic best practices in packaged goods for developing digital packaging. There’s, therefore, consumer work to be done. Speaking to other brands and colleagues, I think it’s really a lot more in the advertising space where brands have moved very quickly. They’ve relied heavily on the gut, relied heavily on historic best practice to sort of shift their appetite in strategies. So I think that’s the phenomenon that’s at play there for sure but certainly, from the part of the market that we play, we haven’t really seen that.

Gregg Archibald: Anyone?

Matt Warta: Gregg, I’ll talk about that a little bit. We have seen it and where we’ve seen it is somewhere we have focused anyway but just leveraging other data to supplement some of our studies, so primarily behavioral data that is out in the ecosystem, so leveraging other data platforms to bring in behavioral data that can supplement the stated data that we collect. So that’s one key area. I think it will be interesting to see how that evolves over time given privacy and also just the changing behaviors out there. I have seen the other theme that you brought up which is our clients where we’ve done a lot of work with them are pushing us, rightfully so, to be able to leverage past studies to inform what we’re doing today or to just outright answer a question that they have. So we’re certainly seeing that and investing against it.

Gregg Archibald: So I want to shift for just a few minutes to methodologies. We’ve all seen what’s happened to the qualitative world and the shift to online qual basically overnight the first week of March. So are there some other things you’re seeing methodologically that are getting you intrigued or interested in terms of what clients are requesting or new and different ways to address some things that we may not have been so eager to address in certain ways before? Adriana, I’ll start with you.

Adriana Rocha: Yes, Gregg. So speaking about the Latin American perspective, I would say that Latin America is maybe five years behind on what we are seeing in other regions like the US or Europe in terms of adopting phones, mobile as a mainstream methodology nowadays. I believe that a few days ago in one of their webinars, they mentioned that in Latin America, 16% of all resource is done online. So imagine that we still have to move almost 80% of the studies that are being conducted face-to-face mainly or telephone. So I think that Latin America is a region and as the industry and the region leader is going to do a big jump into adopting online methodologies and what we see in the US happening maybe five, 10 years, we will probably be seeing two, three years in the region. So I think it’s going to be an accelerated adoption of use of platforms and online methodologies replacing especially face-to-face in the region. So I think that’s something that it will be very unique in the region where online is still evolving so I think this will be interesting to see, this fast change happening in the region.

Gregg Archibald: Yes. I didn’t realize that online methodologies were so small. So yes, I think you’re right. I think there will be some vast acceleration there. What about others? Are you investigating some new approaches, are you seeing some things methodologically that you’re investigating further?

Dirk Huisman: There are three areas. One is more and more observational and intuitive research methodologies but that’s just the trend that comes from the past and continues. The most development is I think in the analysis and the method to analyze the data and to go more and more to the individual level because we are getting smaller and smaller segments and more segments. So we want to understand more and more about that individual. So we see huge developments of things I don’t understand anymore but really the bright guys who are capable of analyzing data at the individual level, that is a trend which continues. A third trend is really data fusion where you combine all the data sources to get an answer.

Gregg Archibald: I agree with you that those individual-level data is the Holy Grail across a lot of different things and many questions are difficult to get a good answer from just one viewpoint. You need multiple viewpoints to get a holistic perspective. I think that’s kind of the key question. I would not have grown up in research if I didn’t ask this question. Is there anything I should’ve asked that I didn’t? See, I have been a moderator before.

Dirk Huisman: No.

Matt Warta: Yes. I think it’s a great discussion. I really enjoyed hearing everybody’s perspective. I know I learned some things today so thank you. Alex Hunt: Thank you.

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