8 minute read 24 Apr 2020
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Beyond COVID-19: How a crisis shifts cultural and societal behaviors

8 minute read 24 Apr 2020
Related topics Consulting COVID-19 Customer

To stay relevant, companies need to understand their consumers’ and employees’ changing needs and reset their customer strategies.

Since the 2008 global recession, millennials haven’t been buying houses at the same rate as previous generations. Many have chosen to remain with parents or family. If living on their own, they’ve chosen to rent over buying. Often this isn’t a choice, but an economic necessity.

The housing crisis over a decade ago had lasting effects on millennials, gradually shifting their attitudes toward renting versus owning a home. It is no longer the guaranteed investment of generations past. This is a good example of how, in periods of crisis and change, human aspirations and behavior change. Often, for the long-term.

Look out of the home, only as far as the driveway, and there are further examples. Post 2008, monster SUVs, once-popular, suddenly became “uncool.” Taking its place among the most popular cars? The humble, hybrid electric alternative to the ostentatious gas-guzzler.

Once upon a time, it was also viewed as “uncool” to have bought clothes from discount retailers. Now, the majority do. Largely led by the buying habits of Gen X and millennials, buying clothes at a discount is a new norm we’ve all become accustomed to. And in typical fashion, Gen Z has taken it to a new level, even making second hand and goodwill a shopping destination of choice.

These are examples of how a crisis can lead to huge shifts in cultural and societal behaviors. Behaviors that negatively impact some industries, brands, and businesses, but serve as opportunities for others. And I expect to see long-term shifts of the same magnitude, if not more, due to the COVID-19 pandemic.

Our shifting needs during crises

In his Hierarchy of Needs, psychologist Abraham Maslow claims that as humans we naturally prioritize “basic physiological needs” such as food, drink, shelter, as well as “safety needs” achieved through financial and emotional security. These needs are typically met through employment, physical health, and mental wellbeing.

Through the COVID-19 crisis, we’ve already seen human behaviors changing drastically, with people taking a leap towards grasping their most “basic” human needs. Yet meeting these needs requires a sense of order, predictability, and control that has resulted in hoarding and shortage of basic food items and health supplies.

Financial and health concerns are likely to increase as more and more people are either out of work, sick, or both. Mask, hand sanitizer and acetaminophen aren’t the only things in high demand. Gun and ammunition sales are at all-time highs, including many sales to first-time buyers, as people anticipate the social unrest that may come with the unknown ahead of us.

Interestingly, the concerns that are now dominating much of the country, if not the world, were already top of mind among today’s youth. In a recent study we conducted on Gen Z (those born between 1997 and 2008), we found young people’s priorities in the US were personal finances, safety, and their careers. That’s despite them often being seen as a generation that’s idealistic.

Why might this be the case? Well, major events, including crises, shape generations and the longer-term behaviors, attitudes, and lives of our broader societies. As a generation, Gen Z grew up on the heels of the Columbine massacre, 9/11, through the 2008 recession, increased gun violence in American schools, and the mass adoption of the smartphone – giving them instant access to it all through 24/7 news outlets and social media.

As a result, it is little surprise to find that their greatest focus reflects Maslow’s basic needs rather than striving for the esteem and self-actualization needs at the top of Maslow’s hierarchy, often the focus of Millennials and the greater society they influenced.

What behavioral changes should we expect from COVID-19?

Cultural shifts shape human behavior, form our expectations as both consumers and employees and impact industries across societies. Successful organizations are tapping into these shifts to improve consumer relevancy today and prepare to meet the challenges of tomorrow. So, what changes should we expect from COVID-19?

One thing to note is that changes in societal values and human behaviors that were already underway often accelerate during a crisis. And that’s exactly what we’re seeing.

With a rise in technology and a change in company attitudes, many office workers were already becoming accustomed to working remotely. Now, because of a spike in people working from home during this pandemic, working from home will become normalized at a much quicker rate. As a result, we might see several knock-on effects.

More people working from home influences childcare, the industry surrounding it, and what people expect from their employers. What does your company offer when it comes to emerging needs, such as flexible hours around school drop-offs, morning routines, subsidized childcare costs, and concierge services?

I’m not the only one to expect there to be a baby boom in December time this year either. This will also exacerbate the need for remote working.

A shift towards authenticity

There are other behavioral themes that are arising out of this crisis.

Since the crisis started, I’ve participated in countless business calls where participants wore hoodies and baseball caps. Ponytails and makeup-free faces are now the norm, as are children in the background and dogs barking.

Several of my favorite, typically stoic business reporters have shared pictures and stories of their new behind-the-scenes reality. People are no longer hiding the juggling act of home, work and life faced by many. I’ve heard endless stories of moms finding places in their homes to hide for video conferences.

Because we are all in this together, there seems to be a new-found freedom to show who we really are and the challenges we face on a daily basis. While many will return to old habits and routines, I also expect the transparency into people's lives, struggles and joys we gained through this crisis to open us up to a new level of authenticity in our dealings with one another.

In times of crisis, humans want to know they matter. For customers, this means listening, understanding and adapting to shifting behaviors, values and needs. It means higher degrees of personalization, predictability and authenticity.

In several ways, this crisis is accelerating the pace in which the rest of society catches-up with the behaviors and values of Gen Z. Our recent Gen Z research showed that 82% of Gen Z believe it is very important to be authentic, or true to yourself. And this is even showing up in their social media behaviors – using social media as a communication tool versus the personal brand building and promotion we’ve seen on platforms in the past.

It’s time for a reset

Successful organizations are tapping into these shifts in behavior to improve consumer relevancy and differentiate themselves from the competition.

This crisis has highlighted for many organizations that they were underestimating the speed of change and underinvesting in the technologies and tools that will enable them to operate in a digital world. Companies need to transform so they can deploy technology at the speed at which their customers and employees need it rather than as fast as their legacy systems will allow.

And this new level of speed, authenticity and transparency will influence all kinds of businesses, from beauty and fashion, to education and technology. And this is only a small part of the beginning of the story. I expect to see changes in how people live, love, work, play, and shop to drive massive change across every industry and organization.

Rather than looking straight for the answers or making assumptions about people’s needs, the most successful companies are those that seek a better understanding of the people rewriting the new rules: the consumer.

Understanding their needs today and anticipating how they will evolve in the future provides companies with the opportunity to reset their organizations against where we are going, versus where we have been.

For companies to survive and excel, they need to ask three big questions:

  • What are the changes society will demand as we move through, and hopefully beyond, the COVID crisis? 
  • How will these changes be reflected in the expectations of consumers and employees?
  • How can businesses position themselves to get ahead of the curve?

Summary

The current crisis will result in new whitespace, where emerging consumer and employee needs are waiting to be met. This presents a rare opportunity for companies to take a unique and human-at-the-center approach to adjust to the new realities the crisis will create. Do we retreat to what’s familiar? Do we focus only on the short term? Or, do we see this as an opportunity to reboot and reinvent?

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Related topics Consulting COVID-19 Customer