Relationships will mean more, and a flight to quality
In the pre-confinement world, consumers became very transactional; chasing deals and churning from one provider to another. The post-confinement consumer has probably had a variety of experiences with a variety of organisations and is likely to emerge from the experiences with a change in attitude in the trade-off between price and substance. This will lead to a flight to quality, consumers will prefer to deal with companies that they believe they can trust when times are tough.
There is a company in Australia that runs a toilet paper subscription business. Every 3 months, they ship you 48 rolls of toilet paper. When COVID-19 toilet paper panic hit Australia they were obviously overwhelmed. They shut down their website, and wrote to all their subscribers and told them, don’t worry about what you see on the website, we have your toilet paper reserved no need to panic. Qantas gave all their frequent flyers a status extension, understanding they would not be flying for a while. Ensuring that when things return to normal you won’t be disadvantaged. Relationship matters.
Other companies have not taken the same route and their customers have had a hard lesson that even when things are good for them and bad for you…they are going to make the most of it. Coles and Woolies take note! My local IGA still had specials.
For the most part, I think companies that do the right thing for their consumers, to the extent they can, will be rewarded post-confinement.
Some observations we’ve noticed from our China office:
- Food prices are more expensive compared to 2 months ago. Large consumables and other consumption activities do not recover as quickly as the government expected, yet.
- Local authorities issue shopping vouchers to stimulate consumption. Non-essential consumer goods (eg. Cars, fashion ) market is now nearly frozen.
Regan is a subject-matter expert in analytical database marketing and customer relationship marketing, as well as an in-demand presenter and keynote speaker at national and international events. He also authors thought leadership pieces on data-driven marketing that can be found on the DA Blog.