COVID-19 has radically changed the context in which we make purchasing decisions, disrupting many deeply-rooted habits and preferences. While countries in the Asia-Pacific region are beginning ease off lockdowns, even those with low case rates have experienced lasting changes to the way we socialise, shop, eat and exercise—among other things.
No one can predict whether these behavioral shifts will last or what the recovery period will look like. Extrapolating lessons after a disruption of this magnitude is risky, so brands may feel they’re on shaking ground when it comes to strategic planning.
Focus on what you can control
Right now, consumers are using multiple devices to go online at unprecedented levels. People are searching for information and content to meet essential needs. And consumers are adjusting their routines to be internet-first. Despite being a digitally advanced economic region, APAC businesses are struggling to adapt, along with the rest of the world, to the accelerated shift to online shopping. Whether, or for how long, these trends last remains to be seen.
Marketers can take solace in focusing on what they can control. That means getting back to basics with the 4Ps: product, price, place, and promotion.
Solid behavioral insights are the strongest foundation upon which to build your new marketing mix. Brands should be working to understand how the extreme change of context brought on by COVID-19 has triggered a disruption in their consumers’ buying behaviors.
Even in the midst of profound behavioral shifts (whether sudden or gradual) the fundamentals of consumer decision making remain true. We have a habitual-deliberate decision loop model that provides a framework for understanding disrupted decision behavior.
In fast-moving consumer goods segments, consumers spend most of their time on the habitual side of the loop during 'normal' times. Shoppers know which brands they prefer, how often they purchase, where they shop, and how much they’re willing to pay. These decisions don’t involve much deliberation; they’ve become habits. Leading brands want to keep their customers in this habitual loop, and they use their 4Ps to do so.
On the other side of the decision loop, we see deliberate behavior. Here, consumers are more conscious of the choices they make. On the deliberate side of the decision loop, marketers can use the 4Ps to trigger selection—whether in times of disruption or not.
A change of context is a prerequisite for a change in habitual behavior. Decisions once made out of habit are subject to disruption. The usual cues that trigger many decisions have vanished. COVID-19 presents a sudden and extreme change of context, triggering a cascade of disruptions to our habitual decision loops.
Adapt your 4Ps to a disrupted reality
When you understand your consumers’ decision loop, you can more confidently adapt your 4Ps to a newly disrupted context. Here are some considerations given what we know today about disruptions to the market for consumer packaged goods.
Product: Many companies have paused ongoing innovation plans to focus on “in-the-moment” projects aimed at alleviating immediate consumer needs. As we prepare for a recovery period—and subsequent recession—it’s important to consider possible innovation opportunities in response to behavioral shifts.
Place (Omnichannel): Online shopping and social media consumption have accelerated. However, for certain categories, countries and consumer demographics, the change in context is driving change in online shopping behavior and “forced trial” of brands that are more readily available.
Price: New contexts and habits will no doubt impact portfolio pricing. Long-held assumptions may be out the window. Start by segmenting (new and loyal) consumers, then look at how they buy now, how conditions have changed for them, and what alternatives they’re exploring. Follow your customers’ disrupted decision loop to find the answers. Now more than ever, a data-informed pricing strategy will be critical to meeting your net revenue goals.
Promotion: What messaging will deliver the most impactful content to boost awareness, engagement and conversion—both online and in-store? Depending on where consumers are in their decision loop, advertising may aim to reinforce brand loyalty, such as by boosting engagement on social media. Or it may need to trigger an action, such as repeat or trial purchases across channels.
The COVID-19 crisis has certainly altered decision-making, but we’ve yet to know how many of these changes become part of our so-called 'new normal.' As you reassess your marketing mix for the short-term and beyond, think about how you can use the 4Ps to influence consumers at critical points in their habitual-deliberate decision loop.
Michael Hetherington is the APAC director at SKIM, a market research agency specialising in decision behavior.