Forces of Change: Navigating Seismic Shifts in Shopping

Forces of Change is a multi-disciplinary collaboration between multiple industry leaders to combine research and provide a complete picture of the important changes impacting brands and their relationships with consumers. Based on research conducted in April of 2020, the report highlights some key and current trends, many of which will persist beyond COVID-19.  The complete report is available for download here.

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Companies are under enormous pressure to fulfill a new set of consumer needs.

Forces of Change presents a unique set of research to understand the impact of COVID-19. The aim is to help Shopping and Retail brands navigate the present-day crisis and understand the new buying behaviors and the implications of major changes in what attributes matter most to consumers. Which factors will win the hearts of consumers, now and in the future?

During the pandemic -and in the face of today’s cultural conflicts – marketers must avoid the hard sell and demonstrate a genuine commitment to actions and solutions.  Converseon unveiled a new Brand Purpose Index that measures perception towards companies in responding to COVID-19.  With Converseon’s machine learning for analysis of social media conversations, they benchmarked companies across four Shopping and Retail categories to quantify performance on Brand Purpose & Trust Indexes, identifying leaders and laggards.

Takeaways from our research and the Brand Purpose Index include:

• As a guiding factor in consumer choice, safety is an accelerant for growth in both established trends such as online sales and nascent areas such as pickup
• Emerging shopping behaviors and hybrid models such as online order and pickup are likely to become a habit, as consumers recognize the convenience
• The importance of attributes is shifting – consumer put 2X more weight in the importance of Price than Brand and Quality
• Established brands could face a loyalty challenge, as distribution challenges during COVID-19 spur consumers to trial alternative brands
• Brand Purpose and authenticity matter, as companies are expected to show grit in responding to crises. Leaders and laggards on Brand Purpose are visible on social media, recognizing reputation gains and losses based on response to the pandemic.
• Safety efforts are key to creating a positive perception that companies are responding to the crisis

 

Emerging Behaviors Become Habit

While on-premise visits across shopping and retail segments have dropped precipitously during COVID-19, growth in online shopping, pickup, and delivery has exploded. Shopping and retailers that minimize day to day stress and safety concerns have an unprecedented opportunity to build trust and shift loyalty.

While the shift from on-premise shopping to online and delivery apps is well established, the pandemic has spurred the adoption of innovation and hybrid models, such as ship-to-store with curbside pickup, and cash and contactless payment options. Nascent trends such as pickup gather steam with an up to 200% increase for some retailers. Pick up at store is a safer option for now, and likely to stick beyond COVID-19, as many consumers recognize the convenience. As a key priority, companies should focus on omnichannel and the hybrid experience of order and pickup.

 

The Loyalty Challenge

During COVID, consumers reported that price is the most important attribute – 2x greater than brand and quality, and expected demand for value-based products to grow the fastest. Faced with stark economic realities, many consumers must consider trade-offs between price and choosing brands to whom they are loyal.

Traditionally, leading brands have enjoyed significant distribution advantages in many CPG categories. With many preferred brands out of stock for months during COVID-19, consumers who purchase new brands might find that these alternatives are good enough, given the price advantages that these second-tier brands may offer.

Brands who are slow to adjust pricing could face a loyalty challenge with consumers who are more value-minded and willing to trial new brands and switch.

Big brands should not assume that as COVID-19 fades, their pre-COVID positions of share and strength will automatically return.

 

Safety First and Foremost

Top of mind for consumers – safety factors are prominent for all of us in choosing to get back to our lives, work, taking care of our health, and shopping. Despite companies investing aggressively in safety efforts during COVID-19, our research revealed that brands face an uphill battle to win public confidence. Leaders on Brand Purpose include companies that have tackled lightning rod issues such as fair pay and a lack of paid sick leave as a perceived risk to employees and customers. Lowe’s, Target, and Kroger’s focus on adding paid sick leave, which resonates on social media.

Safety efforts are key to creating positive perception towards a company’s response to the crisis. To ease fears, brands must communicate transparently about practices to keep people safe starting with their employees.

 

Brand Purpose and Authenticity Differentiate Leaders

The response to the COVID-19 crisis is a defining moment for many brands since companies are scrutinized. For leading brands, it is vital to keep a pulse on reactions to their COVID-19 response on news and social media and how perception impacts reputation. In the report, Converseon used its award-winning AI to measure perception towards Brand Purpose, Corporate Social Responsibility (CSR), and trust. The result is an Index that ranks leaders vs. laggards on corporate COVID response.

Companies emerge as leaders on Brand Purpose by showing grit and doing the hard work to protect employees and customers from illness, supporting community relief with philanthropy, donating products, and innovating to solve real problems. The full report provides our Brand Performance Index results. Across shopping and retail, leaders on our Brand Purpose Index responded proactively to COVID-19, including:

• Home Depot (PPE donations, paid sick leave, Employee Safety)
• Publix (food bank donations, job hiring)
• Lowe’s (paid sick leave, pay bump)

 

These corporate responses to COVID-19 resonated on social media, creating positive perceptions for these brands.

 

Brand Purpose

Faced with COVID-19 and cultural conflicts, companies are doubling down and focusing on Brand Purpose to earn trust. In responding to COVID-19 – and communicating their purpose = brands must not only connect with empathy but also provide meaningful action. Authenticity is no longer optional for brands. Brands must demonstrate making a positive impact and walking the talk.

 

Read the full report

 

On a personal level, it has been very rewarding to be part of the Forces of Change research team. Please contact us if you would like to discuss insights from the report and research to predict what comes next.

 

Authored by:
Glen Kushner
Converseon

Sincere appreciation goes to BuzzBack, Consensus Point, Converseon, Embee Mobile, Panoramix Global, and Gen2 Advisors for their effort and dedication to making this work available to you. There was also generous support provided by Greenbook, Blue Ridge Insights, and Prodege.