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    Online Exclusives

    Post COVID Marketing Tips

    How household and personal care companies can manage the transition from short-term survival to long-term success.

    Post COVID Marketing Tips
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    Krasimira Mladenova, SKIM05.24.20
    COVID-19 has radically changed the context in which we make purchasing decisions, disrupting many deeply-rooted habits and preferences. And no one can predict whether these behavioral shifts will last or what the recovery period will look like. Extrapolating lessons after a disruption of this magnitude is risky, so brands may feel they’re on shaking ground when it comes to strategic planning.
     
    Six to eight months after this disruption started, a new economic reality will settle in. Some brands will thrive during this transition, others will struggle.

     
    Focus on What You Can Control

    To what extent shopping and buying habits have changed and for how long remains uncertain. Marketers can take solace in focusing on what they can control. That means getting back to basics with the 4Ps: product, price, place, and promotion.
     
    Solid behavioral insights are the strongest foundation upon which to build your new marketing mix. Brands should be working to understand how the extreme change of context brought on by COVID-19 has triggered a disruption in your consumers’ buying behaviors.
     

    Krasimira Mladenova


    Even in the midst of profound behavioral shifts (whether sudden or gradual) the fundamentals of consumer decision making remain true. SKIM’s Habitual-Deliberate Decision Loop model provides a framework for understanding disrupted decision behavior.

    In fast-moving consumer goods segments, consumers spend most of their time on the habitual side of the loop during “normal” times. Shoppers know which brands they prefer, how often they purchase, where they shop, and how much they’re willing to pay. These decisions don’t involve much deliberation; they’ve become habits. Leading brands want to keep their customers in this habitual loop, and they use their 4Ps to do so.
     
    On the other side of the decision loop, we see deliberate behavior. Here, consumers are more conscious of the choices they make, such as in the purchase of cosmetics or fragrances. On the deliberate side of the decision loop, marketers can use the 4Ps to trigger selection — whether in times of disruption or not.
     
    A change of context is a prerequisite for a change in habitual behavior. Decisions once made out of habit are subject to disruption. The usual cues that trigger many decisions have vanished. Instead, consumers are triggered to deliberate on what was once a straightforward decision. COVID-19 presents a sudden and extreme change of context, triggering a cascade of disruptions to our habitual decision loops.
     
    Adapt your 4Ps to a disrupted reality.
     
    When you understand your consumers’ decision loop, you can more confidently adapt your 4Ps to a newly disrupted context. Here are some considerations given what we know today about disruptions to the market for personal care and household products.

     
    Product: Many companies have paused ongoing innovation plans to focus on “in-the-moment” projects aimed at alleviating immediate consumer needs. As we prepare for a recovery period — and subsequent recession — it’s important to consider possible innovation opportunities in response to behavioral shifts.
     
    As you reassess your innovation strategies and perhaps re-prioritize your product pipeline, consider these elements:
     
    ·      Did the disruption permanently change the context of what people feel they need? For example, awareness of ingredient authenticity and sourcing was already driving behavior pre-COVID; will this trend accelerate as consumers become even more focused on personal health?
    ·      Which features and benefits are more/less valuable as consumers make deliberate decisions during and following the crisis?
     
    Based on our research across personal care and household cleaning product categories, shoppers in general are more likely to reach for larger packs. While most remain loyal to their brands (given physical availability),  in some categories, such as oral care, this sentiment can trigger a switch from premium offerings to mid-tier products and from mid- to low-tier products. This is compounded by the wider availability of larger pack offerings within non-premium tiers and a COVID-inspired shift to more prudent purchasing behavior in these categories.
     
    There is minimal indication of a persistent switching behavior toward lower-tier brands in the household and personal care categories, in spite of the fact that lower-tier brands are more likely the last available options on the shelf. We attribute this loyalty to expectations of efficacy, safety and health concerns that often drive premium brand purchases.
     
    If you’re the premium selection, you might expect brand loyalists to return, even after being compelled to purchase a competitive product. If you’re the second-tier brand, this presents an opportunity to capture market share by proving better value to consumers — plus reassurances around product performance shoppers expect from well-established competitors.

     
    Place (Omnichannel): Online shopping and social media consumption have accelerated. However, for certain categories, countries and consumer demographics, the change in context is driving change in online shopping behavior and “forced trial” of brands that are more readily available.
     
    For example, prior to the crisis, consumers tended to buy bigger packs online and were more open to bundles. With the observed shift in tendencies to buy “bigger” even in shelf context, could bundling benefit brands in physical stores, as well?   As online shopping becomes more prevalent, is your online portfolio up for the test?
     
    In an online retail environment, brands have the opportunity to quickly send a clear message, leveraging both visual imagery and product descriptors. In the personal care and household categories, benefit claims are key. Hero images, combined with clear product descriptors and a well-structured product detail page, strengthen product differentiation between brands, as well as across brand tiers. This not only creates a positive online purchase experience, it becomes an advantage among in-store shoppers who use their phones research products before or during a shopping trip.

     
    Price: New contexts and habits will no doubt impact portfolio pricing. Long-held assumptions may be out the window. Start by segmenting (new and loyal) consumers, then look at how they buy now, how conditions have changed for them, and what alternatives they’re exploring. 
     
    Follow your customers’ disrupted decision loop to find the answers. This might mean reinforcing and rewarding buying habits for current consumers while offering a promotion to trigger a deliberate choice of brand or SKU to attract new consumers. Now more than ever, a data-informed pricing strategy will be critical to meeting your net revenue goals.
     
    How long will the trend toward fewer shopping trips and larger package sizes remain? A recession will increase price awareness and price sensitivity, but how much, and which products will be particularly affected?
     
    Our COVID-19 validation pricing research in April across personal care and household categories shows little change in consumer price sensitivity. However, we do see a shift toward lower-tier and large-pack offerings. Online shopping for household and personal care products is done mostly in a comparison mode (price comparison? what does this mean?). The largest online retailers (Amazon, Walmart and Target) show multiple brand options, even within a brand-specific search. This necessitates a clear brand position and a meaningful, at-a-glance product benefit communication. 
     
    What pricing actions can be taken to ensure product loyalty after the crisis?
     
    With numerous bundling opportunities, brands can and should explore bundling options that can support current purchase levels, while sustaining and even elevating value to the consumer. This approach can be particularly impactful for personal care brands.

     
    Promotion: What messaging will deliver the most impactful content to boost awareness, engagement and conversion— both online and in-store?
     
    Depending on where consumers are in their decision loop, advertising may aim to reinforce brand loyalty, such as by boosting engagement on social media. Or it may need to trigger an action, such as repeat or trial purchases across channels.
     
    Consider the three most important consumer needs at the moment: protection, connection and entertainment. Consumers are adjusting their beliefs and behaviors daily. What are your consumers doing differently than before? In what situations? For what needs? For which purposes?
     
    With increased online presence of shoppers of all ages, brands have a chance to reach vast numbers of potential buyers. Our research shows that personal care brands can truly influence brand visibility and awareness through social media. However, in order to generate word of mouth, a post needs to carry a strong social or highly unique and relevant message.

     
    Looking Ahead…
     
    The magnitude of the COVID-19 crisis is unprecedented, but it will pass. The pandemic has certainly altered decision-making, but we’ve yet to see how many of these changes will stick. Once again, in times of uncertainly, get back to basics. As you reassess your marketing mix in the short and long run, think carefully about how you can use the 4Ps  to influence consumers at each point in their Habitual-Deliberate Decision Loop.


    About the Author
    Krasimira Mladenova is a director at SKIM (
    www.skimgroup.com), a leading insights agency specializing in decision behavior. She has over 17 years of experience in market research, helping clients solve challenges related to design, communications, and pricing across CPG categories. As head of SKIM’s Hoboken office, Mladenova leads its Northeast US operations. She holds a Master’s Degree in Marketing with a concentration in Applied Statistics from Zicklin School of Business (CUNY) and is a member of the Rutgers University’s marketing advisory board. she can be reached at www.skimgroup.com/contact
     
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