07 Jul 2020
Debbie Bowen-Heaton, Oliver Wight Partner
Our daily patterns, lifestyle and business environment have changed dramatically over the last few months, at a speed and to a degree that we could never have fathomed previously. Consumers were already changing their buying habits and expectations, but the global pandemic has accelerated them five years forward, particularly when it comes to the world of digitalisation. Supply chains have been tested to the extreme, businesses are closing their doors for the last time and consumers across the globe are looking at products and brands with a new perspective.
The pandemic is forcing the Consumer Packaged Goods industry to re-shape itself, rapidly accelerating long-term consumer trends in just a few weeks. We as consumers have changed, and new habits that have emerged will prevail, changing what we value, how and where we choose to shop, as well as how we live and work. As consumers continue to respond to the crisis in different ways, Consumer Goods businesses must remain aligned and agile in their ability to react to worldwide changes in consumer habits. Some consumers feel worried, fuelling stockpiling of key products, whilst others remain indifferent and continue their business as usual. CPG companies will need to understand how their own consumers are reacting and develop customized and personalized segmentation strategies for each different type. The days of ‘one-size-fits-all’ sales and marketing approach are completely over.
Consumers are typically reacting in the following ways:
The Protectors: These consumers are not so concerned for themselves, but for their families. These are the individuals who have been stockpiling and who are pessimistic about the long-term economic impact of the pandemic.
The Pessimists: These people have been the hardest hit by the pandemic and remain cynical about future recovery. They are spending less than usual and will continue to keep a strict hold on their buying habits. The Steady Spenders: Unchanged and stable, these consumers are not directly impacted by the pandemic and have kept their buying habits the same.
The Optimists: This type of consumer is concerned about the pandemic but also best positioned to deal with it. Optimists are continuing to spend more across the board, taking advantage of pandemic driven sales and offers on more luxury items.
The coronavirus outbreak has shunted us out of our normal patterns and routines. We as consumers are adopting new habits and behaviors that many anticipate will continue in the long term. With this in mind, how can CPG companies apply consumer insights to refine their offerings? Increased focus on health CPG companies will need to make it a priority to support healthy lifestyles. Having a strategy for ‘health’ will need to be a strategic priority and differentiator. Consumer with a conscience Consumers are more aware and conscious about what they are buying with a focus on limiting waste, cost, and an awareness of sustainability.
Companies will need to make this part of their offer or adapt their model. We love local Consumers are going local by supporting their local stores and brands. CPG companies will need to find a way to connect locally. So what do CPG business leaders need to do now? In these unprecedented times, leaders are being stretched to their limits. Those who emerge successful will have reacted quickly to make the fundamental business decisions required to not only survive this crisis but thrive later on.
Here are three key focus areas for CPG leaders:
Understand the environment: Leaders need to fully comprehend the environment they are working in to determine the business impact and any future implications.
Reset the agenda: It’s time to revise the current business model, reset the strategic priorities, make the fundamental business decisions, and re-position with right, relevant offering.
Invest and renew: Leaders must look to make the right investments, drive change, and ensure their business strategy encompasses consumer focus.
For more information and advice on preparing your business for a post-pandemic world visit the Oliver Wight Support Hub. Or to learn more about our Recovery Series improvement programmes click here.
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