Foresight to fuel future ideas and innovation –top 5 predictions!
The benefit of hindsight… guiding brands to culturally relevant choices based on behavioural shifts seen following the 2008 recession
The starting point in all this is that people have changed as a result of COVID-19, and therefore businesses need to adapt. We are, however, in the fortunate position of having the benefit of hindsight to guide future choices for our brands, which is why this blog is backedup by a detailed review of 10 authoritative industry and academic papers accessed through the British Library’s electronic archives. The papers were written in the years following the 2008 financial crash, and they make fascinating reading, as they focuson key consumer and shopper behaviour changes, cultural and social shifts, as well as the most effective marketing and retailing practices, and products and services that successfully innovated.
At the time of writing, we are in a period of disruptive shock. We do not know the shape and the speed of economic recovery, although current predictions are an elongated U or leaning L which is close to the Nike Swoosh. More accurate predictions from economists will follow, once more is known about a possible vaccine and its time frame for usage.
Some businesses will be facing much uncertainty about the future, and their focus might be on survival, especially for those in hospitality and travel, or related sectors. Their priorities are likely to be centred on how to stay in business by securing necessary funds, restructuring, or relooking at their supply chains that might have become unstable.
This review goes beyond the uncomfortable period of turmoil businesses face immediately following a sharp economic shock. It serves to provide a backbone of confidence for businesses who will be revising their strategies and developing new innovations to meet the new consumer needs. As Donald Sull from MIT Sloan School of Management reported in one paper: “A crisis of this magnitude marks opportunity for a clean break with the past, and creates a rationale for making unpopular and necessary changes.”
Before jumping in, we need to draw attention to possible caveats in extrapolating data from 2008 to the current crisis.
Critically, the 2008 crisis came about because of risky loans provided by financial institutions,whereas today’s COVID-19 crisis is a health pandemic,coupled with severe economic shock.
Following the 2008 crisis, there was a huge lack of distrust of business (especially big business) which is unlikely to characterize COVID-19 times.
Governments and their handling of the crisis may come under fire;
And big business may be judged in other ways, which for now might be to do with taking up government handouts, while still paying large salaries to top staff;
In the UK, even in these early stages of the crisis,we see different businesses (large and small) coming out in support of NHS and key workers;
This presents an opportunity for corporatesto strengthen theirreputation and/ or take more radical steps to address any negative corporate perceptions.
Unlike the 2008 crisis, the COVID-19 crisis has a more widespread impact directly affecting everyone, as we are all required to isolate to limit the spread of the virus and save lives. This has led to new ways of socializing, learning, working, shopping etc. Alarmingly, there have been many deaths which means people are dealing with loss, and heightened concerns for themselves, family and friends. Undoubtedly, the current crisis will result in some of the already established health trends being more pronounced and new ones emerging. And this is likely to drive a need for new product innovation across some categories.
Another important difference is that the voice of Gen Z is present now and they were not key consumers in 2008 (some weren’t even born yet, and the oldest were only 12!). They are very much part of today’s consumers and brands, and their choices and changes in behaviour will need to be accounted for in the future new normal.
Below I have pulled out the key consistent threads I have seen across the papers I have reviewed, which set the social and cultural context for brands strategy, marketing and innovation following the 2008 crisis. This is a factual account that will have relevance for the current crisis, and may even be felt to be stronger in some cases.
1. Financial impact resulting in less disposable income
Even those who were not hit financially displayed an unwillingness to spend, and a desire to conserve what they have (and it became cool to do so!!). Shoppers learned to buy cheaply when quality was still sufficient (discounters made huge gains in UK),whilst trading up for special moments (e.g. Marks & Spencer, Waitrose retained focus on quality and premium).This led to different shopping habits where Tesco (‘the squeezed middle’) lost out. This quote from Martin Lewis, the MoneyExpert sums it up well: “It’s a specific philosophy and it means cutting your bills without cutting back. It’s not thrift. It’s different.”
2. Luxury brands and little luxuries
Luxury brands were hit hard. Pre-recession luxury and high-end brands were aspirational for many, and this was somewhat eroded by the recession. However, little luxuries or more affordable indulgences and escapism that gave consumers relief from everyday life saw a spike in demand. Chocolate sales soared more than half in the credit crunch,as eating and indulgence can make us feel better about life.
3. Sharing the love
Parents and grandparents continued to indulge their families in hard recessionary times, and brands that have an emotional connection at this level flourished.
4. Cocooning/ staying in is the new going out!
The home becomes the centre of home entertainment and people start to redecorate rather than relocate and make it a place they can feel safe and cocooned in and share time together. Many more home improvement projects were embarked upon, rather than employing others to do it.
5. Individuality/ customization
The globalization of brands created an opposing trend, the search for bespoke, personalized and individual products and services. Once the domain of luxury brands promoting quality, craftsmanship, provenance, the more affordable brands revised their products to meet these new need.
One example referenced was Dominos 2008 BFD (Big Fantastic Deal),which let consumers create the pizza of their dreams, specifying the type of crust, the amount of sauce and cheese, and their choice of toppings. Consumers then named and registered their choices on the BFD database where they could be viewed and ordered by other customers.
This account is evidence-based. If I were to go further and layer in my top 3 thoughts on what is missing but potentially relevant now to the COVID-19 crisis. My money would on …
- health and hygiene management innovations;
- tech-enabled solutions of those things that have been trialled in lockdown as a different way of doing things, especially those that make rational and potential financial good sense such as working from home, GP appointments, online workshops;
- with a world turned upside downside by COVID-19, does this present an opportunity for governments and business to do things differently with an openness to being more responsible? Might the once seemingly impossible to achieve targets required to slow climate change, and associated behaviour change to achieve them, seem more attainable now? And the necessary legislative measures around transport and travel restrictions required to help us really stand a chance of having an impact now be more palatable ? Might we be in a place where the reversal of globalisation has a positive impact on the climate? After all, out of the 2ndworld war and the societal stress it caused we founded the NHS and the welfare state. Surely some good must flow from this crisis….
I plan to continue to write blogs which I feel will be helpful and supportive to the insight industry. My next blog will highlight the tools and people skills essential to strengthen insight teams in COVID-19 times. If there are any themes you are keen to see covered, please make suggestions, as I am happy to consider
Author: Lou Stacey
I am founder of Magnifisight, a research and insight consultancy, where I deliver end-to-end market research across commercial and government clients. I also consult and train on building effective and innovative insight functions where I am especially focussed on the adoption of newer research technologies and practice.
I am also the Insight lead at Fraction, a strategy and insight consultancy, where I get the opportunity to work with an amazing and talented team of commercial strategists and data innovators. We harness insight and instinct to realise disruptive revenue growth in the FMCG, Healthcare and Finance industries.