5 minute read 30 Sep 2020
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COVID-19: How to rebuild trust and consumer confidence

By Janet Balis

EY Americas Customer and Growth Market Leader and Marketing Practice Leader

Transformation leader in media and marketing. Innovator. Digital native. Change agent. Passionate advocate for women and gender parity. Influencer. Mother.

5 minute read 30 Sep 2020
Related topics Customer COVID-19

Businesses must understand changes in human preferences due to the pandemic. EY leaders review the latest consumer research.

In brief
  • New EY research compares changes in consumer perspectives across geographies, including emerging buyer habits in China.
  • Thanks to the catalyzing effect of the pandemic, many leaders are realizing a range of initiatives – often around digital transformation.
  • Businesses must reprioritize what they already do well to fit around new consumer behaviors and values.

The COVID-19 pandemic continues to change the world as we know it, especially in the way we behave and interact both as businesses and as humans. How companies respond to such a new consumer dynamic will determine not only which of those businesses survive, but also the speed of the global economic recovery.

While it is easy to use the word “crisis” universally, there are vast differences by sector and geography. Some sectors are likely to recover sooner than others, mirroring changes in consumer behavior. While demand in the hospitality sector, for example, has plummeted, the health care and fitness sectors, on the other hand, have seen pivots and growth in business as consumers begin to re-evaluate their lifestyle choices and future well-being.

To understand how to react as businesses, we must focus on humans — their shifts in values, behavior and consumption. And we must be vigilant and constant in observing those changes in human preferences — to navigate this moment, as well as what comes next and beyond. The EY Future Consumer Index (FCI) is monitoring consumer attitudes in 19 countries around the world every six weeks . It allows for meaningful insights at a point in time and shows trends as consumer perspectives change, along with comparisons of different geographies.

A panel shared the latest data from the July survey on a global webcast, “How will brands adapt to a more cautious customer when lockdown lifts?” with almost 2,000 registrants. I moderated a discussion with several of my colleagues and fellow leaders to discuss the implications: Erik Larson, EY Americas Customer Experience Technology Leader; Glenn Engler, EY-Parthenon Global Digital Leader, EY Americas Strategy and Transactions Digital Strategy Leader; and Andrew Cosgrove, EY Global Consumer Knowledge Leader & Lead Analyst, who is a co-author of the study.

Consumers in China are “cautiously extravagant”

The latest data from the July 2020 release of the FCI suggests that in China, for example, where the pandemic originated, the country is emerging from the crisis gloom to a new, brighter future, with certain groups of consumers being categorized as “cautiously extravagant” in their buying habits.

Despite that optimism, almost half (47%) of Chinese consumers are uncomfortable about resuming everyday recreational activities, such as going to the cinema, a restaurant or a bar.

Over half those surveyed (52%) are consolidating their shopping trips, buying more in fewer visits, and two-thirds (66%) say they are more aware of hygiene and sanitization. This reflects an even greater worldwide figure (72%) who now describe themselves as “risk averse.” Businesses in China have had to adapt to prioritize safety and address a genuine fear of infection, transforming and adapting the customer experience.

Andrew Cosgrove believes there are lessons to be learned: “The anxiety that new consumer behaviors are fueling is going to be with us for a long time and that’s forcing companies to accelerate the transformation of their businesses at far greater rates than they were thinking of six months ago. Companies can’t just respond to the crisis as it is today; they need to transform their business for the long run.”

A quarter of all business are still stuck in the here and now

During the conversation, a live audience poll found that more than a quarter of companies are still in reactive mode dealing with the now, instead of focusing on the next or the beyond.

Organizations focus on crisis phases

Selecting the right priorities

But most universally, EY clients are finding that the pandemic has been a catalyst for change, often around digital transformation. And a range of initiatives from virtual sales and service, to e-commerce, to data acceleration are not only quickly becoming a new mandate, but — even more importantly — these initiatives are suddenly being executed. Our audience shared their priorities in poll responses below.

Priority order

Nearly half (49%) confess that the pandemic has obliged them to accelerate strategies for using online platforms as essential to their future commercial success, and more than a quarter (27%) are revisiting the portfolio of products and services they provide. A similar number (24%) are now focused on designing and delivering an enhanced consumer experience both physically (especially, for example, in the case of retail) or online.

Companies need to be asking themselves how they can transform faster to meet consumer expectations. For some, this means more e-commerce or better enablement of digital channels. For others, it means reaching the consumers directly, using customer insights and analytics to improve their understanding of how customers behave, and creating new experiences to help them connect.

Lasting effects of the pandemic 

Glenn Engler says businesses need to consider which changes are temporary and which are likely to be more permanent: “If you are any kind of a retailer and you have not figured out the (need for a) combination of e-commerce, home delivery, curb-side pickup, in-store experience (and) touchless payments, that’s probably going to be an issue going forward. That’s not temporary.”

In a post-COVID-19 world, the watchword appears to be “agility.” Businesses must be able to move and adapt quickly to change, for some changes in consumer behavior are temporary, and others point to more fundamental and perhaps permanent shifts. Improving communications and transparency are key to rebuilding trust. Through trust comes confidence, and confidence ultimately leads to an increase in consumer spend.

Winners and losers in a constantly changing world

To survive, businesses don’t need to overcomplicate or add to their existing business strategies. What they need to do now is reprioritize what they already do well to fit around new consumer behaviors and values. They also need to seize upon the virus as a unique opportunity to stop, start or continue the things that make them stronger or hold them back.

As panelist Erik Larson remarked: “We really see the best traction and success of leaders when they aren’t adding on, they aren’t just hiring somebody to help out with X. They are actually reprioritizing, so they are stopping doing something, as well as doing something new.”

Summary

Businesses can and must evaluate their strengths and priorities, and stand ready to adapt to consumer dynamics in a constantly changing world.

About this article

By Janet Balis

EY Americas Customer and Growth Market Leader and Marketing Practice Leader

Transformation leader in media and marketing. Innovator. Digital native. Change agent. Passionate advocate for women and gender parity. Influencer. Mother.