Insights & Industry29/11/22
Insider’s view: Insights during times of crisis
Over a period of two years during the COVID-19 pandemic, life as we knew it was completely upended. We had to adapt our behaviours to changing personal and work circumstance. Shopping behaviours changed – online retail became more relevant. Entertainment consumption changed – streaming services grew. Food habits changed – in-home cooking and takeaways were more common and so on. During this period, Brands watched consumers swiftly change behaviours within months – changes that would normally take several years. They had to re-calibrate their consumer understanding. It wasn’t clear yet, how much of these changes were temporary or here to stay. Consumer insights were needed, and rather quickly. There was a need to move towards agile consumer pulse.
2022 was the year when the world was expected to move on from COVID-19. As far as consumer behaviour was concerned, some returned to past levels (e.g. air travel). However, many other behaviours have changed for good.
Some such behaviours included education – increase in digital learning, work-life balance – more people have chosen to not return to previous levels of work hours, shopping (70% of Finnish consumers shopped online in 2020*), entertainment, just to name a few. Consumers have become more health conscious – both mental and physical – and environment conscious (56% of Finnish consumers considered the environmental impact of at least one of their purchases*). This directly impacted their consumption patterns of products and services.
Consumers were forced into changes that they had not foreseen or asked for. However, they have started appreciating the value of those changes within a short time. Many of these changes were driven by necessity or even forced due to government imposed restrictions. But, the side-effects of these changes were increased convenience, comfort and for some, a better quality of life.
Concerns still linger on the financial impact to many people coming out of the pandemic, with severe impacts to their work lives. At the same time, consumers have had the time to reflect on what was most important in their lives. They have chosen to prioritize them in a way they could not do before within the everyday cycle of routine life. Of course, this meant Brands had to catch up to the consumer.
Need for consumer pulse
For a consumer Brand, 2022 started as an extremely busy time trying to understand this new reality. This new makeup of behaviours, attitudes and trends that are here to stay and are shaping the products and services they offer to consumers. Companies have had to adopt new agile insight methods. These methods leverage new technology to keep pace with fast moving trends. Trends, that were accelerated within a few months.
Responding to this change, the insights industry itself has evolved. During the pandemic, the traditional research methods have retained a fair share of their business. However, technology enabled research has fast outpaced their growth and is expected to continue this trend going forward. Technology solutions have played a key role in capturing and converting data into actionable insights quickly. For a Brand, trying to keep up with consumer changes, these technology enabled insight solutions have allowed them to keep their finger on the pulse continuously. Thus, challenging themselves to react and respond to their consumers at the same pace.
Winds of change
As the year progressed, new winds of change appeared. The war in Ukraine, increased inflation, high gas prices, straining supply chains, volatile political-economic environments, etc. to name a few. This meant that the market moved yet again. This was even before the market could sufficiently react to the after-effects of the pandemic. Everyday consumers directly felt the brunt of higher prices, lower spending power and extremely high uncertainty. By extension, Consumer goods companies felt the pain. This was in addition to the impact to their own supply chains.
After enjoying a strong first half, these new changes gave companies cause to pause and evaluate how to adapt to these new circumstances. One thing has become clear though – as there does not seem to be any quick resolution to the crises, companies have to yet again adapt to consumers’ new realities.
“Successful companies continue to adapt to this new reality and find new ways to understand consumers and serve them best.”
The impact of these changes though, are not proportionately felt by all. Some countries are better equipped to weather the crises than others, e.g. some countries still enjoy lower cost of energy (aided by higher share of renewables, self-sufficient resources, or the structural approach of the industry) and thus impact consumers less than other countries with higher energy prices. Certain sectors are less affected by these macro-economic and political changes such as public sector companies, whose services and utilities are always in demand than other sectors where consumers can cut back on consumption to a larger extent. Successful companies continue to adapt to this new reality and find new ways to understand consumers and serve them best.
As a research company, especially focused on consumer research, 2022 was a bumpy ride, after an accelerated start in the early part of the year. The year is not over though and there are already signs of positive change in the months ahead.
In a changing world, where the cycle for change has shortened significantly, companies need to adapt quickly to stay relevant. Insights organizations are innovating, changing their business models, translating consumer pulse to actionable insights much faster and much more frequently to help Brands adapt to this new reality.
Many consumers are facing some of the most turbulent few years in their lives and their attitudes and behaviours are changing rapidly. The external environment is nowhere close to becoming stable or returning to prior levels anytime soon. Some impact of the political-economic crisis will linger into the new year and beyond. However, in this new reality, as the old adage goes, “the only constant is change itself”. Keep learning, keep inventing and keep an eye on the next change around the corner.
To learn more about how we can help deliver agile consumer insights, learn more about our services.
* Consumer Conditions Survey: Consumers at home in the single market – 2021 edition by European Commission