Our latest UK Consumer Sentiment Research, reveals that optimism for an economic recovery in the UK has reached its highest recorded level during COVID-19, having almost doubled since November 2020. The majority of vaccinated consumers expect routines to return to normal by the end of 2021 and say finances are already back to normal. As younger consumers receive the vaccine, greater spend and out-of-home activity will likely continue to increase.
Tellingly, UK consumers reported that they were waiting for restrictions to be lifted and wider vaccination coverage before reengaging with activities outside the home. So, as the UK nation takes steady steps towards the “next normal” what other insights should marketing leaders be aware of to help inform and underpin their strategy?
Ongoing “investments” in the homebody economy
While restricted by stay at home orders during the pandemic, consumers have made structural changes to their homes – 30 percent have invested in new uses for their living space through remodelling or setting up a specific work-from-home space. Thirty-two percent undertook house moves – including moving into a larger or smaller home, in with family or to an entirely different geography. Nine percent reported getting a new pet at home.
However, consumers are also excited to spend more time and money outside of their homes post-COVID-19…
Ready, steady… “splurge!”
Eager to make up for lost time, nearly half (47 percent) of UK consumers said that they are planning to spend more or “splurge,” with 82 percent of higher-income millennials intending to spend the most. Fifty-five percent of respondents say that they plan to spend on travel/lodgings/vacations, 53 pecent on restaurant/dining out/bars, and 38 percent are opting to flash the cash on beauty and personal care.
Consumers are voting with their feet (and fingers)
The ripple effect of COVID-19 throughout 2020 had a meaningful impact on brand loyalty which saw 72 percent of UK consumers changing stores, brands, or the way they shop. Millennial consumers are at the forefront of this migration, with 85 percent stating they have tried a new shopping behaviour during the pandemic. As 84 percent of UK consumers who tried a new brand have stated that they intend to stay with it, it’s clear that many of these new behaviours are likely to stick.
Marketers should be aware that, while convenience and value have been the main drivers of shopping behaviour change, they are not the only drivers having an impact on brand loyalty. Purpose-driven reasons, such as the desire to support local businesses, accounted for 28 percent of responses. Interestingly, nearly a quarter of those who stated purpose-driven reasons for their switching are GenZ shoppers, despite only being 12 percent of the overall sample. Also in the mix were 24 percent of UK consumers who cited availability of products and 21 percent who wanted to treat themselves or were looking for variety/change.
The digital shift is here to stay
Since the onset of the pandemic, the retail sector experienced ten years of growth in digital penetration in a matter of months. As consumers have expanded the role of digital in their lives during COVID-19, they have found several new behaviours that they expect will stick even after COVID-19 subsides. These, for example, include the download and use of restaurant and store apps, which was up 49 percent, with 52 percent intending to continue using this method. The use of digital wellness tools and online streaming is also expected to stay strong with 72 percent and 67 percent respectively involved in these digital activities.
What does this mean for marketers?
The pandemic has compelled businesses to reinvent themselves and reimagine the consumer experience. In doing so, it has created potential growth opportunities and key competitive advantages for brands that can successfully activate a personalised and seamless omnichannel consumer experience – which, from a marketing perspective, requires embracing the surge in consumer data and doubling down on marketing efforts to drive significant customer acquisition through this period of convulsive change.
Data-driven consumer intimacy will be key in identifying new pockets of growth, enabling market- and customer-level insights to inform decision making for activities such as targeting, media spend and operations. Through this data-driven marketing approach, marketers can communicate with consumers and shoppers with the right content, in the right vehicle, at the right time, and adjust based on consumer signals with a much faster metabolic rate than before – in an omnichannel environment – and be best positioned for success in this “next normal.”
Organisations that prioritise their data-driven marketing efforts can turn the COVID-19 crisis into a time of transformation. By capturing new data, searching for new behavioural relationships, and enabling rapid experimentation, marketers can seize granular growth opportunities and enter the recovery with significantly greater ROI and resilience. Capturing this opportunity, however, will require brands to tap into new and better data, invest in technology that learns at scale (to be able to read and interpret signals of consumer intent and responses, and then adjust to what works and what doesn’t), and continue honing agile marketing practices in a remote setting.
Photo by simon frederick on Unsplash
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This was interesting to read, and not something everyone takes into account. Marketing is getting more difficult, and we need to realise that and adapt to the times.