A TALE OF TWO PANDEMICS-Consumer Packaged Goods During and After COVID-19 An Ipsos Point of View
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
A TALE OF TWO PANDEMICS– Consumer Packaged Goods During and After COVID-19 An Ipsos Point of View By Kris Hull
Key Takeaways:
• Consumers are excited but
cautious about an uncertain
post-pandemic future. Companies
that smartly scenario plan for
various futures will be better
prepared to act.
• Post-pandemic CPG growth will
be grounded in habit formation—
either to reinforce behaviors
that drove growth or to replace
behaviors that inhibited it.
• Brands must create advantages
wherever consumers shop,
which means executing a winning
e-commerce strategy. User
experience is more important
than ever.
2 IPSOS | A TALE OF TWO PANDEMICS—CONSUMER PACKAGED GOODS DURING AND AFTER COVID-19
The COVID-19 pandemic drove the largest disruption in Regardless, brands cannot afford to wait for more
Consumer Packaged Goods (CPG) in recent memory. certainty before acting. Those that anticipate likely
For many categories, it led to unprecedented sales and changes in the market and plan accordingly, focus on
the challenge of maintaining supply; for others, sales understanding and influencing consumer behavior
suffered as changed routines reduced demand. All changes, and optimize their presence in physical and
categories, like their consumers, struggled to adapt as e-commerce environments are the ones that will
the disease ebbed and flowed. succeed.
Amid this uncertainty, CPG brands face the need for
growth. Brands that benefited from increased demand
Brand leaders who are willing
during the pandemic must embed new habits to exceed to be actively present can
strong prior-year comparisons. Those that struggled emerge from this challenging
must drive consumers to return to prior habits or create
new ones to regain momentum. All must all do this in
period of behavior change
an environment where consumers are increasingly turning with stronger brands.”
to e-commerce as well as B&M stores. —Coronavirus & Behavior Change, an Ipsos White Paper
Optimism and an Uncertain Future
40% of consumers are optimistic, yet 36% are frustrated.
Source: Ipsos Essentials, Wave 36, March 2021
Consumer perceptions about the pandemic are at an inflection point. Feelings of calm and optimism are on the rise,
while frustration and boredom, though still high, are declining.
How our emotions are changing
60%
50%
40%
30%
20%
10%
0%
Wave 20 - Wave 22 - Wave 24 - Wave 26 - Wave 28 - Wave 30 - Wave 32 - Wave 34 - Wave 36 -
July 19 August 16 September 13 October 13 November 8 December 6 January 17 February 14 March 14
Bored Calm Defeated Empowered Enthusiastic Excited
Frustrated Indifferent Lonely Optimistic Rebellious Scared
Sensible Skeptical Supportive Well-prepared
Source: Ipsos Essentials, Wave 36, March 2021
3 IPSOS | A TALE OF TWO PANDEMICS—CONSUMER PACKAGED GOODS DURING AND AFTER COVID-19
Our Ipsos Pandemic Adaptability Continuum (IPAC) shows that, while consumers are increasingly moving
beyond the pandemic (i.e., Recalibration, Rebuilding, Settling In), the largest group continues to be the
Acclimation group, which created new routines in response to the pandemic.
IPAC phases compared with January
45%
41%
40%
35%
30%
27%
25%
20%
20%
15% 14%
11% 11%
10% 9% 9% 9%
8%
7%
6% 6%
5% 3% 3% 3% 3%
2% 2%
1%
0%
Uncertain Preparation Adjustment Acclimation Enduring Anticipation Exploration Recalibration Rebuilding Settling In
1/19 – 1/20 4/13 – 4/14
Source: The Ipsos Coronavirus Consumer Tracker, fielded January 20 –21, 2021 among 1,115 U.S. adults and April 13 –14, 2021 among 1,114 U.S. adults.
4 IPSOS | A TALE OF TWO PANDEMICS—CONSUMER PACKAGED GOODS DURING AND AFTER COVID-19
Despite the hope, there is also lingering uncertainty. Nearly eight in ten consumers feel at least some
uncertainty about their post-pandemic future, according to the April survey, and 55% believe it will take
more than six months for a return to normalcy.
Timeline to Normalcy
Things feel normal to me now 10%
Within 1–2 months 7%
Within 3 –5 months 15%
6 months to a year 27%
1–2 years 22%
55%
Longer than 2 years 7%
Never / I have no idea 13%
Source: Ipsos Essentials, Wave 36, March 2021
With this much uncertainty, it is critical for CPG companies and brands to develop strong scenario plans.
They should conduct workshops that assess alternative future scenarios around the pandemic, economy,
supply chain, etc., identify leading indicators of which alternative future is emerging, and wargame the
actions the brands need to take to win in that future.
5 IPSOS | A TALE OF TWO PANDEMICS—CONSUMER PACKAGED GOODS DURING AND AFTER COVID-19
Key Takeaway:
Consumers are both excited and
cautious about an uncertain
post-pandemic future. Companies
that smartly plan for various
future contingencies will be
better prepared to act.
Habit Changes Enable
and Inhibit Growth
Every CPG category must adjust
to behavior changes brought on
by the pandemic
Many categories have seen incredible growth during
the pandemic. Consumers stockpiled toilet paper.
New cleaning routines led to growth for paper towels
and cleaning products. Food categories like bottled
water and ready-made meals saw sustained increases.
Discretionary categories like beauty care saw reduced
consumer demand. Other categories saw consumption
both increase and decrease—for example sweets—as
consumers alternately sought to eat better or indulge:
Past two-week Past two-week
increased purchases decreased purchases
Bottled Water (18%) Beauty Products (15%)
Coffee/Tea (17%) Chocolates/Sweets (17%)
Ready-Made Meals (17%) Savory Snacks (13%)
Chocolates/Sweets (13%)
Source: Ipsos Essentials, Wave 35 and 36, February / March 2021
CPG companies now must wrestle with evolving
emotional and psychological needs as well as new
purchase and usage dynamics. As we emerge from
lockdowns and restrictions, will the cleaning and
cooking routines that have taken hold stay in place?
Will categories that were less relevant regain lost
momentum?
Fortunately, Behavioral Science offers clues that can
help brands assess how sticky the behavior changes
are and how to influence future behaviors.
6 IPSOS | A TALE OF TWO PANDEMICS—CONSUMER PACKAGED GOODS DURING AND AFTER COVID-19
Ipsos’s MAPPS Framework
Ipsos developed a framework called MAPPS that identifies the key
dimensions for understanding and influencing behavior change:
MAPPS MAPPS
Dimension Category What a barrier looks like
Outcome expectations “I don’t think it will work”
Emotion “I don’t feel like doing it”
Motivation Internalization “I don’t want to do it”
Identity “I’m not that kind of person”
Self-efficacy “I don’t feel able to do it”
Capability “I don’t have the skills to do it”
Ability
Routines “It’s not part of what I usually do”
Processing Decision forces “It doesn’t fit into how I think about it”
Physical Environmental factors “My environment doesn’t support it”
Social norms “I don’t think others expect me to do it”
Social
Cultural norms “I don’t see it as part of how I live my life”
https://www.ipsos.com/sites/default/files/ct/publication/documents/2020-12/the-science-of-behaviour-change.pdf
Brands can use MAPPS to Diagnose the role of each dimension,
Design actions the brand can take to influence behavior, and Deliver
the right actions.
For example, some consumers increased purchase of sweets while others
decreased. Was their Ability to consume affected by routine changes
(e.g., I usually buy a candy bar at the gas station on the way to work, but
I’m not getting gas and I’m not driving to work)? Did Motivations change
(e.g., I need a treat. I’m buying those Belgian chocolates online)?
Understanding what triggered the change in behavior helps brands know
where to focus their efforts to reinforce or change it.
Regulatory Fit Theory
Another Behavioral Science framework Ipsos uses to understand both
behavior change is Regulatory Focus/Regulatory Fit Theory. This frame-
work explains how behavior is driven by two governing mindsets:
• Promotion: Behavior focused on exploration, experimentation,
achieving a “positive” outcome
• Prevention: Behavior focused on caution, maintaining status quo,
preventing a “negative” outcome
Thinking again about sweets, those who bought more may have exhibited
a Promotion mindset, buying more or new treats to indulge themselves.
Those who bought less may have exhibited a Prevention mindset to avoid
gaining weight while being stuck in a more sedentary lifestyle.
The same behavior observed in two different consumers could come
from different mindsets. It is critical for brands to know which mindsets
prevail within the contexts of shopping, buying and using products,
and to create messaging that meets consumers with cues and “nudges”
that reflect that mindset.
7 IPSOS | A TALE OF TWO PANDEMICS—CONSUMER PACKAGED GOODS DURING AND AFTER COVID-19
Key Takeaway:
Post-pandemic CPG growth
will be grounded in habit
formation—either to reinforce
behaviors that drove growth
or to replace behaviors
that inhibited it.
E-commerce Challenges Established Brands
One in five consumers shopped online for CPG products during
the pandemic; tactics that win in B&M are not the same as those
that win in e-commerce
Early in the pandemic, as lockdowns expanded, consumers were driven to e-commerce for products they typically
purchased in B&M stores. Even as late as March of 2021, many CPG categories see 1 in 5 purchases taking place
online (i.e., DTC sites, e-commerce sites, online shopping for B&M stores, etc.):
Transaction Channel — In-store vs. Online
Usual store Different store than normal Online, like I always do Online, instead of regular store
Milk/milk drinks 68% 14% 12% 6%
Pasta & Rice 67% 12% 13% 8%
Cheese & Cream 66% 13% 14% 7%
Coffee/tea 65% 12% 14% 8%
Chocolate & Sweets 65% 14% 14% 6%
Carbonated/fizzy beverages 64% 15% 15% 6%
Savory snacks 64% 14% 15% 7%
Bottled water (flat or carbonated) 64% 16% 14% 7%
Non carbonated drinks (juice, still drinks) 63% 16% 13% 7%
Yogurt 62% 18% 14% 6%
Beer 58% 20% 16% 6%
Plant based beverages (soy/almond/oat… 56% 20% 17% 7%
Ready made meals (including delivery) 55% 17% 18% 10%
Source: Ipsos Essentials, Wave 36, March 2021
8 IPSOS | A TALE OF TWO PANDEMICS—CONSUMER PACKAGED GOODS DURING AND AFTER COVID-19The move to e-commerce is incredibly disruptive
for brands that are strong in physical retail. Brand
blocks no longer exist to guide the eye at the shelf;
small brands that could never achieve significant
distribution are as easy to find and buy as estab-
lished brands; consumers can choose the criteria
they use to filter and sort alternatives.
Importantly, the tactics that win in B&M are not the
same as those that win in e-commerce. Brands
need to ensure they create unique tactics for both.
To do so, brands should:
• Revisit shopper fundamentals: segmentations,
decision trees, P2P, etc. They should map the
omnichannel or e-commerce shopper journey
holistically and find the key touchpoints to
influence shoppers in order to increase
conversion.
• Optimize UX: The user experience for
e-commerce is a key driver of whether the user
becomes a buyer. Brands must create the
right user experience for e-commerce through
exploratory research and design workshops,
build the experience via user-centered design
and usability testing, and grow the experience
via ongoing tracking and evaluation of impact
in-market.
Key Takeaway:
Brands must create advantages
wherever consumers shop,
which means executing a
winning e-commerce strategy
is more important than ever.
9 IPSOS | A TALE OF TWO PANDEMICS—CONSUMER PACKAGED GOODS DURING AND AFTER COVID-19In Summary
We believe there are three key areas CPG brands need to
address now to set themselves up for growth:
• Consumers are both excited and cautious about an
uncertain post-pandemic future. Have you developed
strong scenario plans for your brands and categories?
• Post-pandemic CPG growth will be grounded in habit
formation. Do you understand what behaviors have
changed, why, and how to influence them in your favor?
• E-commerce presents opportunities and challenges for
new and established brands. Have you developed an
e-commerce strategy that reflects new fundamentals
and optimizes the user experience?
Contact
Please reach out to us to learn how we can help with
these and any other business challenges you are facing.
Kris Hull
SVP, Senior Client Officer
kristopher.hull@ipsos.com
About Ipsos
At Ipsos we are passionately curious about people,
markets, brands, and society. We deliver information and
analysis that makes our complex world easier and faster
to navigate and inspires our clients to make smarter
decisions. With a strong presence in 90 countries, Ipsos
employs more than 18,000 people and conducts research
programs in more than 100 countries. Founded in France
in 1975, Ipsos is controlled and managed by research
professionals.
10 IPSOS | A TALE OF TWO PANDEMICS—CONSUMER PACKAGED GOODS DURING AND AFTER COVID-19You can also read
