Changing Consumer Needs

More consumers are necessarily spending more time, energy and resources meeting foundational physical needs. At the same time, more unstructured hours spent at home affords some consumers a unique window to seek purpose and fulfillment. Both impact purchase decision-making and it is critically important for brands and retailers to understand how the needs of consumers are changing at a granular level, since the impact of COVID has been very uneven.

Disruption of Decision-Making

Over the past two months the consumer decision process has been completely disrupted. Prior to COVID-19, many consumer decisions were based on a habitual, subconscious process used to simplify a sea of options. Now, decisions are more deliberate as consumers match new priorities to a rapidly shifting consideration set.

While the negative human impact of the crisis cannot be overlooked, the current situation provides a unique lens into human decision-making, revealing how brands and retailers can better provide consumers with what the need and want, now and in the future.

Anticipating the Next Normal

Every brand in the world is emailing me some story. It won’t convince me to buy something. But I won’t forget the companies that are actually making things better for me.

While there is no crystal ball view to the future, we used our consumer ethnographies to develop a model of behavior to better understand, and predict, how choices made in the consumer goods space will continue to evolve. Applying the model at the category level reveals opportunities for brands and retailers to better meet consumer and shopper needs. It measures the change in consumer need prioritization, pain points, and desired benefits sought from goods and services. It is a forward-looking perspective that is crucial to prepare for the ‘Next Normal’ and reveals some of the changes we observe now are temporary while others will be far more enduring.

Consumer Behavioral Change ‘Stickiness’

Understanding changes to consumer need priorities and pain points, along with the ability of manufacturers and retailers to consistently deliver against these changes during COVID, is key to mapping the near-term impact. Identifying the level of long-term change to consumer needs and assessing how well brands and retailers performed during the crisis shows us the ‘Next Normal’.

Growth Scenario: Delivering on changing needs, addressing pain points and building trust

I started shopping at Aldi to save money. Their organic produce surprised the hell out of me. I’m sold and don’t feel the need to go back to Whole Foods anymore.

Decline Scenario: Underdelivering on changing needs, not addressing pain points and eroding trust

I tried to order click-and-collect for groceries but things were out-of-stock, I couldn’t figure out how to use it efficiently and there were no delivery windows for 2 weeks. Not going to be trying that again.

1 in 2 online delivery grocery shoppers reported wait times of 2+ days

How should CPG Manufacturers and Retailers Respond?

During these unprecedented times it is critical for brands and retailers to stay connected with consumers and shoppers in real time to identify the impact of COVID on consumer needs and pain points and continually assess how they can adjust their offer to better deliver in the near term. At the same time, there is a need to use forward-looking insight to determine what the ‘Next Normal’ will be and develop strategies to deliver on this future state at a matrixed consumer, brand, occasion and local level.

Key steps for brands and retailers as they work to provide for consumers now and build enduring relationships:
 

1. Build deep empathy and understanding across consumer cohorts in real time

• Build a view of consumer needs, pain points and the brand value equation
• Re-construct the consumer / shopper journey
• Focus on speed of perspective and depth over precision
• Decisions will be made on incomplete data—declare a belief in what will happen, and don’t waver

2. Develop a clear, consumer-based vision for the future. Everyone is inundated with what’s happening day by day.

3. Implement a blueprint for the ‘Next Normal’ now, using a task force structure grounded in the consumer.

• Track, learn and adjust based on the gapping between initial thinking on what will happen vs what does happen.

Map for tomorrow
Develop a proprietary, predictive view of where to play that defines the consumer frame of reference, addressable market, and best opportunities to commercialize strategic choices.

Why it Matters:
A common insights foundation guides innovation and brand strategy, allowing brands to stay ahead of tomorrow’s opportunities and anticipate where to play in the future.

Role of Insights:

• Develop a proprietary consumer definition of the category that combines learnings from leading-edge consumers, emerging trends, and other industries
• Update and evaluate annually as a key input into annual business/strategic planning

Result:
This forward-looking market map empowers the team to plan ahead and creates the right to win.

Assess your job prospects
Expand thoughtfully by regularly assessing and re-assessing which jobs your brand can win.

Why it Matters:
Breakthrough revenue growth comes when brands successfully expand their reach into new spaces.

Role of Insights:

• Build a deep understanding of brand resonance and consumer benefits to identify which jobs your brand will be “hired” for
• Reconcile these potential jobs with the firm’s capacity to support expansion based on category and company dynamics

Result:
An effective insights foundation identifies the brand’s repeatable growth model and enables smart and sustainable expansion.

Create conviction
Know where to play – and just as importantly, where not to play.

Why it Matters:
As organizations grapple with big choices on how to prioritize multiple opportunities, they need the clarity to make difficult decisions, especially when that means challenging convention.

Role of Insights:

• Actively seek new lenses of insight to inspire different outcomes
• Arm the organization with these insights to enable teams to make, communicate, and defend difficult decisions
• Use insight to create the case for change and future-proofing

Result:
Insights-driven decisions that build widespread support for broader organizational direction.

Champion your leading edge
Inspire disruptive innovation by learning from the leading-edge consumer—that is, consumers other than your category’s mainstream core consumer.

Why it Matters:
Research based on today’s core results in close-in line extensions and product modifications, not forward-looking innovation that creates the right to win.

Role of Insights:

• Identify what “leading-edge” means for your business. It may be lapsed users, ultra-heavy shoppers, younger shoppers, or the most informed shoppers
• Understand how these shoppers use, avoid, or “hack” your focus categories
• Connect these leading-edge behaviors to unlock growth from mainstream shoppers

Result:
Understanding the leading edge allows the team to disrupt by better meeting unmet or emerging needs.

Embrace omnichannel
Think outside the traditional channel structure when researching or planning go-to-market efforts.

Why it Matters:
The siloed “channel-first” approach fails to account for the increasingly cross-channel nature of shopper journeys. As methods to engage consumers and shoppers become more fragmented, it is critical to understand shopper journeys and key trigger points from an omnichannel perspective.

Role of Insights:

• Reinforce a “consumer first” mindset, instead of a “channel first” approach
• Map the end-to-end consumer journey to understand where consumers want to discover, learn and buy
• Assess the most critical inflection points for reaching your target shopper

Result:
Insights functions can enable organizations to make go-to-market decisions and integrated demand plans through the lens of the consumer.

Spark digital transformation
Reimagine your organization’s approach to digital by placing the consumer and shopper at the center of your strategy.

Why it Matters:
Your shopper’s path to purchase increasingly involves fragmented digital touchpoints, and she expects a seamless brand experience across these points – on her terms.

Role of Insights:

• Build the fact base and vision required to orient strategy and justify investment in digital transformation
• Infuse digital and ecommerce perspectives into all research initiatives

Result:
Organizations can transform to align with this new consumer reality, justifying their investment with a solid fact base.

Activate the 4Es
Elevate the value equation from the traditional 4Ps to the new 4Es: Experience, Exchange, Evangelism, and Everywhere.*

Why it Matters:
Today’s consumer has more choices than ever, requiring brands to work harder to win trial and build loyalty. Consumers want to engage with brands on their own terms before “rewarding” them with a purchase.

Role of Insights:

• Understand the consumer and shopper beyond their interactions with your product.
• Elevate your brands’ value proposition with broader cultural and lifestyle contexts
• Spark a mindset shift from “marketing against the 4Ps” to “providing consumer experiences”

*In the digital age, a successful brand must engage consumers through the 4Es. The Product becomes an Experience that delivers memorable moments. Price evolves to an Exchange that goes deeper than a transactional relationship with the consumer, offering value beyond price. Promotion turns into authentic, consumer-led Evangelism. And Placement becomes Everywhere: a consistent product and brand story available everywhere your consumer expects to see it.¹

Result:
Mindset shift equips brands to authentically deliver against new growth levers and strengthen consumer loyalty.

Prioritize packaging
Reimagine packaging to enable the 4Es and elevate the brand value equation.

Why it Matters:
Packaging is often under-utilized for growth but plays a vital role in unlocking new consumer engagement and distribution opportunities.

Role of Insights:

• Consider the role of packaging in research initiatives such as leading-edge consumer research and price-pack architecture
• Understand packaging’s ability to deliver multiple benefits, such as ecological credibility, functional benefits, new need states, superior storage, seamless fulfilment, and badge value

Result:
Full leverage of a critical growth lever.

Leverage e-commerce learning for rapid iteration
Use digital as a learning channel in addition to a sales and marketing channel.

Why it Matters:
The rapid acceleration and “failing fast” needed to win in eCommerce can fuel success in other channels, too; this is a critical part of the challenger brand playbook.

Role of Insights:

• Use digital learnings to optimize product mix, refine messaging, and more deeply understand the consumer
• Own coordination of insights and application across the demand landscape

Result:
Better-informed omnichannel planning and successful retail launches.

Unlock the value equation
Drive revenue growth by better elevating the consumer value equation and proactively addressing ecommerce-driven pricing challenges. If not already existent, establish a Strategic Revenue Management leadership function to guide decision-making.

Why it Matters:
Among global top-50 CPGs, two-thirds of revenue growth is driven by pricing and mix, not by volume gains. ecommerce-driven price transparency makes revenue and profit growth even more challenging.²

Role of Insights:

• Understand consumer jobs, shopper missions, and customer needs to identify incremental opportunities
• Pair these insights with knowledge of current price-pack architecture to build consumer-driven architecture
• Offer unique, customer-specific architecture that delivers and captures more value

Result:
Brands can thrive across retail environments even as price transparency issues increase.