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Understanding consumer behavior in the uncertain future

in Innovation, Opinion
- understanding consumer behavior in the uncertain future
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Consumer beliefs and behaviors are changing fast. To keep up with—and perhaps even influence—those changes, companies must leverage deep consumer insights, says McKinsey.

Months after the novel coronavirus was first detected in the United States, the COVID-19 crisis continues to upend Americans’ lives and livelihoods. The pandemic has disrupted nearly every routine in day-to-day life. The extent and duration of mandated lockdowns and business closures have forced people to give up even some of their most deeply ingrained habits—whether spending an hour at the gym after dropping the kids off at school, going to a coffee shop for a midday break, or enjoying Saturday night at the movies.

Such disruptions in daily experiences present a rare moment. In ordinary times, consumers tend to stick stubbornly to their habits, resulting in very slow adoption (if any) of beneficial innovations that require behavior change. Now, the COVID-19 crisis has caused consumers everywhere to change their behaviors—rapidly and in large numbers. In the United States, for example, 75 percent of consumers have tried a new store, brand, or different way of shopping during the pandemic. Even though the impetus for that behavior change may be specific to the pandemic and transient, consumer companies would do well to find ways to meet consumers where they are today and satisfy their needs in the postcrisis period.

Behavioral science tells us that identifying consumers’ new beliefs, habits, and “peak moments” is central to driving behavioral change. Five actions can help companies influence consumer behavior for the longer term:

  • Reinforce positive new beliefs.
  • Shape emerging habits with new offerings.
  • Sustain new habits, using contextual cues.
  • Align messages to consumer mindsets.
  • Analyze consumer beliefs and behaviors at a granular lev

 Reinforce positive new beliefs

According to behavioral science, the set of beliefs that a consumer holds about the world is a key influencer of consumer behavior. Beliefs are psychological—so deeply rooted that they prevent consumers from logically evaluating alternatives and thus perpetuate existing habits and routines. Companies that attempt to motivate behavioral change by ignoring or challenging consumers’ beliefs are fighting an uphill battle.

The COVID-19 crisis, however, has forced many consumers to change their behaviors, and their new experiences have caused them to change their beliefs about a wide range of everyday activities, from grocery shopping to exercising to socializing. When consumers are surprised and delighted by new experiences, even long-held beliefs can change, making consumers more willing to repeat the behavior, even when the trigger (in this case, the COVID-19 pandemic) is no longer present. In other words, this is a unique moment in time during which companies can reinforce and shape behavioral shifts to position their products and brands better for the next normal.

For example, approximately 15 percent of US consumers tried grocery delivery for the first time during the COVID-19 crisis. Among those first timers, more than 80 percent say they were satisfied with the ease and safety of the experience; 70 percent even found it enjoyable. And 40 percent intend to continue getting their groceries delivered after the crisis, suggesting that they’ve jettisoned any previously held beliefs about grocery delivery being unreliable or inconvenient; instead, they’ve been surprised and delighted by the benefits of delivery.

Another example of changing beliefs involves at-home exercise. The US online fitness market has seen approximately 50 percent growth in its consumer base since February 2020; the market for digital home-exercise machines has grown by 20 percent. It’s likely that many people who tried those fitness activities for the first time during the pandemic believed that at-home exercise couldn’t meet their exercise needs. That belief has clearly changed for many of these consumers: 55 percent who tried online fitness programs and 65 percent who tried digital exercise machines say they will continue to use them, even after fitness centers and gyms reopen. To reinforce the new belief that online fitness can be motivating and enjoyable, NordicTrack, in a recent TV ad titled “Face Off,” shows that online workouts can foster the same friendly competition and connection that people look for when they go to the gym or attend in-person exercise classes.

An effective way to reinforce a new belief is to focus on peak moments—specific parts of the consumer decision journey that have disproportionate impact and that consumers tend to remember most. Peak moments often include first-time experiences with a product or service, touchpoints at the end of a consumer journey (such as the checkout process in a store), and other moments of intense consumer reaction.

Some companies have focused on enhancing the consumer’s first-time experience. Plant-based-meat manufacturer Beyond Meat, for instance, was already benefiting from delays in meat production in the early days of the COVID-19 crisis: its sales more than doubled between the first and second quarters of 2020. In collaboration with local restaurants and catering companies, the company has been delivering free, professionally prepared food to hospitals and other community centers. By giving away Beyond Burgers prepared by professional chefs, Beyond Meat is creating positive first experiences with its product at a time when consumers are more open to trial.

As the consumer journey has changed, so have the peak moments, and it’s crucial for companies to identify and optimize them. For example, a peak moment in a grocery store might be the discovery of an exciting new product on the shelf. In the online-grocery journey, however, a peak moment might instead be on-time delivery or the “unboxing” of the order (the experience of taking the delivered items out of the packaging). Grocers could consider including a handwritten thank-you note or some other surprise, such as a free sample, to reinforce consumers’ positive connections with the experience.

Highly emotional occasions can spark intense consumer reactions and therefore present an opportunity for companies to create peak moments associated with their products or brands. For example, when graduations shifted from formal, large-scale ceremonies to at-home, family celebrations, Krispy Kreme offered each 2020 graduate a dozen specially decorated doughnuts for free. With that promotion, the company connected its brand with an emotional event that may not have been a key occasion for doughnuts prior to the pandemic.

Read the full report here.

Tags: CEOCEO Northamconsumer behaviorCOVID-19McKinsey

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