THE OLD WAYS OF RESEARCHING CONSUMER NEEDS WILL NO LONGER CUT IT!
The last year has afforded our Industry a very painful but very clear lesson in consumer dynamics and the clues are writ large about future consumer needs.
We surely by now have our own individual reference points for the scale of damage that the last 12 months has caused to so many businesses in our Food & Drink sector.
I personally feel for the family businesses that had been built up over the last few years through vision, passion, sweat and tears only to meet an unassailable wall erected by indiscriminate fate and with no way round.
Conversely (and this may not seem very sensitive to write but), there have also been some spectacular winners in our industry from the forced consumer dynamics of the last 12 months.
I want to focus in on 3 elements of the disruption in our sector to help explain where we can take some useful learnings for future growth.
1. Disruption to the patterns of consumption
By the end of 2019 the UK was rapidly approaching the point of consuming nearly 50% of its calories outside the home driven by a myriad of food on the move solutions that made it super easy for commuters and travellers to fuelup on the go.
As we all know the Covid crisis hit this sector especially hard as travel restrictions disrupted the normal patterns of consumption. Yet, whilst some commentators are forecasting a post pandemic end to the commute and with it an end to on the hoof sustenance, the majority of industry experts are forecasting a move to a more hybrid work pattern, augmented by a release of a pent-up demand for hospitality.
A recent qual session with our Zillennial Jury (26-18 year olds) found that respondents were most looking forward to returning to eating and drinking out when restrictions were lifted and they would suspend their normal budgeting mindset to makeup for lost time. It’s hard to imagine that consumer’s lives will get any less busy after lockdown, when restriction free travel returns, soit follows that the patterns of consumption will again return to the ease and convenience-led path that has influenced the industry for the last 50 years and will see that 50% calorie threshold finally broken.
2. Disruption to enterprise
Our local pub has seen a succession of landlords over the last decade all trying and sadly failing to make it work beyond a habitual watering hole for local tradesmen. Thankfully the young couple who took over in 2019 were still in charge when Covid struck. They represent a perfect case study of how to pivot and adapt in challenging times. A blend of covered dining, takeaways, food trucks, door stop deliveries, and an honesty shop selling food in collaboration with local suppliers (all well communicated online) has not only created a real community where there was none but has also undoubtedly increased their turnover.
Not everyone has had the skill or energy to adapt like this so there will sadly be a long list of business failures and ruined dreams when the dust finally settles. The disruption to enterprise will also bring about an exciting legacy of change in consumer centricity, as menus and product portfolios see a much needed creative focus…an innovation renaissance of sorts where the consumer will be the main beneficiary. Consumers will have been asked to compromise their perceived safety to venture out so they will not tolerate an additional compromise on the quality of their experience too.
3. Disruption to the trajectories of change
Let’s not forget that 2019 not only saw all the top four Supermarket chains struggling for growth and losing share to the Discounters but also all the main mega food categories (except fresh veg) were down year on year, some into their second or third consecutive annual decline.
A year on and the data has flipped: The Big 4 all showing significant new growth, with the Discounters experiencing new pressure in a spectacular reversal of fortune. The same 5 categories that lost over £200m combined sales in 2019 have added a massive c£1.2bn of additional sales in 2020.
The shopper trend for small, regular top up trips has been replaced, almost overnight, by a return to the previously unfashionable big weekly or fortnightly shop. But not everything has turned on its head. Online and Local have accelerated beyond any previous projection and the big growth trends like Plant based, Low and No andFrozen have all continued to flourish.
So, what trajectories of change will remain once the forced restrictions on shopper behaviour are lifted?
The IGD forecast that the pre Covid trend line will return in 2023 and it seems highly likely that consumers, having experienced this purple patch of availability and convenience are unlikely to want to return permanently to a world of hour-long supermarket big box shopping.
All our research with both our Millennials and Zillennial Jury bears this out. We consumers will retain the new good stuff of the last year (online deliveries, local community shopping) and ditch the avoidable stuff that doesn’t add any value to our lives.
The big winning brands of the last year are all now even bigger household names: Amazon, Zoom, Netflix and Deliveroo. All these businesses have thrived because they are super convenient and super consumer-centric. They have also been able to straddle the new Generation’s expectation gaps because they have first, understood and then second, adapted to the evolving needs by leveraging new technologies to deliver on them.
Conversely, when John Lewis’ new boss DameSharon White announced this month the closure of 16 stores after posting a £517m loss her statement that “…we have seen decades worth of change in the space of one year,” demonstrated very publicly that the famous department chain had not.
Understanding our consumer needs has never been more important to the ongoing success of our sector. The businesses that invested in understanding the new behaviours of Millennials that emerged after the 2008 banking crisis were the ones that thrived in the subsequent recession. The same lesson applies now but is significantly more magnified.
Here are 5 tips on how to get the most “bang for your buck” from consumer insight...
1. Research doesn’t just sit in marketing departments
Consumer insights are the remit of everyone inthe business - it’s all our jobs to understand what our consumers want and need - involve other teams to ensure that learnings are embedded and actioned.
2. Make insights commercially actionable
Using a facilitated workshop as part of the debrief session ensures that the top 10 actions are distilled down and tied directly to the main consumer needs. The ‘so what’ of research becomes the action metric.
3. Have one eye on the communication
Exciting new consumer insights are still a major hook for customer engagement and external thought leadership content. Ensure that the insights are highly deployable by using killer soundbites and videography.
4. Research is more important for SMEs
Many businesses still see consumer insight as a cost not an investment, they often feel forced by their customers to engage rather than do it proactively. New powerful insights can impact the direction and sales success of SMEs more significantly than larger businesses - where they are often lost in brand silos and underutilised.
5. Embrace smart new methodologies and new generational cohorts
Given the investment in time and cash, it’s key to nail the right approach to your research. It’s often better to invest in a highly targeted qualitative exercise where you can get a greater depth of behaviour rationale and a flavour for new consumer language than spending a lot to chase high quant numbers that have to undergo risky extrapolation. Retailers love hearing about how categories can attract younger consumers.