Survival to Success The Consumer Journey and Business implications
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Fiona Jurianze - Director Marketing, Hemas Consumer Brands.
Since mid-March 2020 the country and the consumer have gone through a period of high anxiety.
The statistics and news that we heard added to this feeling of helplessness and fear. Basics that were taken for granted were not available and caught unprepared for the lockdown many of us were anxious about the most basic human needs of food and safety.
The resulting behaviour was to shut our doors from the scary outside world (literally) and get food (whatever brand and wherever we could get it) ,often hoarding essentials as there was uncertainty about supply continuity.
This was very much a period of survival for many consumers as well as for businesses. Businesses often could not access their inputs (raw materials and labour) for production, production facilities were shut, staff were too scared or could not come into work and the period was shadowed by a lot of anxiety about human safety and the future.
However since mid-May the context changed. The virus was controlled and contained to a few clusters and fatality rates were going down and it was apparent that economic activity had to start as the economic blow would be huge. Curfews was lifted gradually, and economic activity was to commence with precautions taken.
In this context the consumer mind was also undergoing change. Fears about basics such as essential foods were eased but new fears came in regarding family members leaving the sanctity of the home and going into the uncertain environment and bringing back unseen but potentially deadly germs back into the homes. People had to start thinking about resuming normal life with going back to work, children having to go out etc. but in a context that is very different to what it was before .
There is also is a lot of uncertainty on the economic front with availability of work and job security.
Businesses also saw that they had to resume operations fast as those who are late will be left behind. There are still many constraints and the fear for human safety and threat of an infection of staff and the resulting sealing of premises is a constant companion.
Given this how should businesses face this period which is the beginning of the ‘new normal’. I’ve put down seven broad buckets of action areas which any business small or large, product or service could benefit from ensuring that they have addressed as they move forward. It is recommended to put together a Fast Response Team to navigate this and ensure this new thinking percolates across the organization.
Secure Supply
The world is very much intertwined and this period of uncertainty with new demand pressure is something the entire word is trying to navigate. As a result, access to certain inputs for production may be constrained. Further import regulations and other services not running at pre-Covid-19 efficacy is likely to result in shortages. This is also true for labour – many production facilities are unlikely to have access to their full labour carder as staff may have left to return to villages a boarding house remain reluctant to keep tenants. Further production lines are likely not to have been designed with the principles of social distancing, sanitizing of workplaces as well as great care needs to be taken to minimize staff members coming into contact with one another.
Most importantly consumer demand is likely to have shifted significantly and demand projections done pre-Corvid-19 are likely to be irrelevant in the new context.
Therefore, it is important to first do a fresh demand forecast and change portfolio priorities as required. It is likely that you may have to reduce complexity and focus on the minimum few products that will be most demanded during this period. Scenario based approaches will be helpful in the context of high uncertainty.
Find alternative suppliers as soon as possible and keep in mind that you will be completing with everyone else for limited supply. Reduce changeover times and any other complexities that can reduce efficiency and thus your ability to supply.
We will have to think with a blank sheet of paper and come up with innovative solutions to keep production at its maximum including rethinking production line design, work shifts. Many have gone into residential models and have had to look for residential solutions which previously the market supplied. Many Staff will have to be flexible/ multiskilled to be move around as the demand requires. Collaborations will also be crucial to increase capacity.
Ensure Availability
With shops now opening and government direction to purchase from your nearest shop as well as tension about going into large shops with many people it is critical to be fast to get onto shelves. Companies that act fast can ensure that they protect their shelf space and grow it. Shops will stock up to compensate for emptied shelves. Therefore, it is crucial to get on shelves and be visible as fast as possible. The same logic is true of services and products not available at a mass scale in stores – ensure you have the maximum availability and ease of access to consumers and they know you are available (visibility). Digital solutions such as e-commerce has significantly ramped up and its important to be on these platforms to give options to consumers and future proof against any future lockdowns. Look out for innovative partnerships to get you product to consumers.
Cost, Cash and Liquidity
In these unprecedented times we will need as team to take decisive action and question each and every cost element and drive down costs. Redeployment of staff, cutting down discretionary expenditure, optimize marketing expenses, renegotiating of rethinking rental and office space are some pointers.
There are likely to be bad debts so focus of cash payments from consumers and renegotiate payment terms with suppliers to improve liquidity.
Brand communication
We are humans and as humans when we go through a life changing situation, we expect those that we care about (including the brands we care about) to be a part of our lives and help us get thought these times.
Consumers are still facing anxiety about what is ahead but now they have access to products and services and therefore from access ( I’ll take anything I can get my hands on) their mind has moved onto questions about ‘am I doing the best for my family? Can this product be trusted? is it safe? “.
In phase one it was about being there for the consumer and having a tonality of genuine empathy. This will continue as brand should help the consumer to navigate how get establish the new way of carrying on with life. This needs to be done fast in “live time” for the consumer. Its about who is there with the consumer during this journey and not who gets it right perfectly.
However, the focus has also moved significantly to establishing product superior. Assure the consumer why your product is better than competitors and thus why they should choose you. There must be a balance of short term and longer-term equity building.
Consumers have also become more conscious about brands responsibility to society and about local brands that help society. Such actions will help build stringer brand preference and equity going forward.
Provide economy / value
As outlined in the context consumers will have less money at hand and even those that have money are likely to spend cautiously. This is a basic human behavior when faced with future uncertainty (we save for a rainy day). Given this brand need to step forward to provide lower outlay options (spend less to buy your product), this could mean lower pack sizes like single use units or lower priced alternatives as many consumers are unlikely to purchase luxuries.
However, as humans we want some small treats to help them through this period so small treats could provide value to the consumer. Think about how your consumer consumes and could consume (more at home) your category and how you could provide offerings that provide value to the consumer.
New Offerings
Just as this period has wiped out certain businesses due to low or no relevance it is also a time of new opportunities, how do companies respond to heightened consumer tensions about convenience, access, health and safety, immunity boosting health and wellness etc.
For example are there opportunities to offer new products in new categories to consumers with benefits that they value – eg. on the go sanitizing products. Alternatively how to augment correct offerings to have greater relevance to the consumer – e.g. . recipes to use products in different ways to spice up home consumption / new usage occasions at home.
Think ahead about what consumption will be, what will be the challenges for the consumer and think of how we can be relevant to the consumer.
Communicate
In times of uncertainty we are anxious as business leaders and so are our employees. We are unlikely to have all the solutions but its important that you communicate right down the line to reassure employees and get their buy in on the situation and the action taken. This is something that affects everyone and its important that everyone as partners in the process pull together to emerge (stronger) out of this time.
Keep your products relevant to the consumer not only in a Corona-19 context but for every day. Also keep in mind that given the nature of this disease a cure could be found anytime, or it could take decades. Future proof your business so that you stand to gain either way. The guiding principles are be flexible, think ahead and be fast.