Monthly Archives: April 2020

Build Emotional Connect with Consumers during the Covid-19 Crisis

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For most of us, Covid-19 is the first time we have lived through a globally traumatic and emotion-inducing event, in real-time, with the whole world connected. From a brand’s perspective,  Covid-19 has reminded us, rather dramatically, that emotions are a big part of our decision-making process and how fear, anxiety and panic can impact sales. 

 

Based on our interactions with 400+ brands, Thought Leaders and Retail Experts, we’ve compiled some strategies focussed on enhancing engagement, maintaining top of mind recall and creating long-term emotional connect with your customers during these tough times. 

 

Key Strategies to Build Emotional Connect

 

  • Lead with Empathy

One of the easiest ways to connect with your customers is to empathize with the challenges and struggles that they are undergoing due to the crisis. There has been a massive shift amongst consumers preferring socially conscious and sustainable brands in recent years and this is a good time to showcase your brand as socially responsible and empathic when the times are tough. 

 

Campaign Ideas : 

The core idea should be to replace sales-oriented marketing campaigns and promotions with human stories centred around your staff, your customers and the larger community. This positions the brand as someone who cares about what consumers truly value rather than what sells. And by creating content that evokes empathy, consumers are more likely to take action – sharing, responding, and even prompting change within their own communities.

 

  • First and foremost, remind your customers that you are there for them in any which way you can be.  
  • Your customers are your community – let them know how you’re responding to the crisis, how you’re conducting business, and what health precautions you’re taking.
  • Ask your customers how you can support them during this time, and let them know how they can support your brand as well.
  • Share stories that reiterate your commitment towards your frontline staff like paying their salaries in advance or setting up an emergency fund through SMS and on social media. Most importantly, encourage your employees to comment and share these posts to ensure maximum reach. 
  • Send a community wellness mailer on what your brand is doing for the community – for instance,  opening up warehouses for providing refuge during quarantine, increase health care or basic pay for employees who are unable to make it to work etc.

 

Example:  Store Closure Communication by Reformation

 

 

Sustainable fashion brand, Reformation, sent out this email to its customers that addressed how they’re responding to the crisis along with a note at the end asking them what they should be talking and posting about. By being candidly vulnerable about not being sure as to what they should talk about, they have been able to create empathy for themselves with their consumers. This small detail shows that they care about their consumers and are open to ideas (in the process elevating them to collaborators rather than just end users).

 

  • Align your message with ongoing health & safety protocols

Brands can echo or amplify government and health organization guidelines by serving as PSA disseminators during this crisis. By rallying your customers around a larger and pertinent cause, your brand gains a dual advantage – you cultivate the team spirit and tribe-like mindset amongst your brand audience, and more importantly, you position the brand as sensitive to the realities of life; thereby making it more humane and relatable.

 

Campaign Ideas : 

These campaigns are great for apparel and sportswear brands where there is a strong brand preference and following amongst their customers. The key is to get the overlap between your brand story and the overarching PSA message right. 

 

  • Explore ways to weave your brand story into the ongoing narrative around safety and hygiene
  • Use your Brand Heart (purpose, vision, mission, and values) as your North Star to remind yourself what your brand stands for, and how it relates to the current crisis
  • Build a community activity around this, fostering a feeling of “we all are in this together”, and hence a large extended family. 

 

Example : ‘Play Inside’ by Nike 

 

 

The apparel giant put out a great campaign that encouraged people to ‘play inside’ to comply with the ongoing social-distancing measures enforced by governments. With the campaign, Nike managed to stay true to its inspirational branding while communicating a timely and relevant message. The brand encouraged customers to share home workout and fitness snaps on Twitter and Instagram to maximize brand reach and foster a feeling of community-   online challenges are a great way to drive the cohesive mantra.

 

  • Focus on value-driven content

With the majority of the world’s population being home-bound, digital content consumption is at an all time high during the crisis. This is a great opportunity for brands to build stronger emotional connect with their customers by going beyond the usual transaction-based promotions and communications. Research in behavioural science and consumer behaviour has proven that these non-transactional engagements serve as building blocks for long term brand loyalty. 

 

Campaign Ideas : 

These campaigns are heavily context and content-driven so don’t worry too much about getting the technicalities right. A simple video shot on a mobile phone will do the trick if the story and content is engaging. Just be mindful of toning down the sales pitch and instead, focus on delivering helpful content.

 

  • DIY videos and webinars are a great place to start – brands can communicate a range of useful and educational content around upcycling (Fashion & Apparel), repairs (Appliance & Electronics), recipes (QSR & Hypermarkets), beauty tutorials (Cosmetics) etc  
  • Curate ideas on optimizing WFH schedules, staying fit and other styling advice
  • Gaming has also become a viable medium for brands to connect with their customers
  • Offer free home trials of products, or leverage immersive technologies like AR to help customers visualise a look once they enter their basic body size parameters like chest, waist etc.
  • Serve as a source of trustworthy information and even inspiration amid widespread uncertainties about public health and the pandemic’s economic consequences

 

Example  : B Bounce by Burberry

 

 

Burberry has launched an engaging and playful game in which players race a deer-shaped character to the moon, using supercharged Thomas Burberry monogram puffer jackets. Players compete for special B Bounce prizes, and winners are awarded custom made GIFs and virtual Burberry puffer jackets edited onto a digital picture of their choice. With this campaign, the British fashion house intends to maximize digital share around its latest collection of down jackets.

 

  • Support a cause and provide an avenue for your consumers to engage with the community

 

Cause Marketing creates a win-win situation for the brand, the consumer and the charity. Across the world, consumers increasingly expect the companies they buy from to act responsibly and stand up for issues that matter. A survey by Havas found that meaningful brands that take a stand more than double the performance of stock indices on average.

 

Campaign Ideas : 

 

If your finances permit, consider giving a percentage of each sale to an organization working to fight the Covid-19 crisis. This allows consumers to support the brand they love while also supporting those working to alleviate the impact of the epidemic. Here are some other ways to run a Covid-19 support campaign

 

  • Make donations shoppable – select a charity helping those affected by the virus, then add an option to ‘buy’ the donation in your catalog.
  • When customers “purchase” the donation, you can reward them with exclusive loyalty program perks
  • Allow customers to use their loyalty points/birthday vouchers to donate to a specific fundraiser with brand matching the donation amount
  • If financial contributions are not an option, consider letting out warehouses to host vulnerable sections of the society, or repurposing factories to produce hand sanitisers and face masks.

 

Example : Feed the Daily Wager by Zomato

 

 

Zomato launched the campaign to support the 450 million daily wage workers in India who have lost their livelihoods due to the lockdown. The brand has managed to raise USD 3 Million through donations and has distributed more than 100,000 ration kits. The campaign was widely circulated on various social media by Zomato employees and consumers and raked massive engagement in the digital universe. The Covid-19 clearly showed that customers prefer connecting with brands that go beyond their business model and work towards the larger good of the community. It’s notable to see that Zomato as a brand simply served as a platform for this campaign while all the donations have come from consumers and employees. 

 

Wrapping Up

 

As you go about using these strategies, it’s important to remember that while business stability might be the primary focus for you, your customers are facing physical, emotional and financial strains during this time. In such troubled times, it is best to over-communicate rather than under-communicate. Much of the problem in the current crisis is uncertainty and the associated anxiety. Try to alleviate it by being in touch with your customers on social media and other communication channels. Send personalized messages to your customers to check in on them and share any uplifting or inspirational news about your brand as and when it happens.

 

Most of all, stay safe, and please feel free to reach out for anything.

How Covid-19 is forcing a Change in Retail Ordering Behaviour

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In a sense, the Covid-19 pandemic has changed the way we work, shop and communicate with people  more than any other technology in the recent past. As more people start working from home, they are sticking to basics, stepping outside only to buy essentials and are constantly worried about the risks of getting infected in crowded places like malls and supermarkets.

 

Being associated with Capillary Technologies, which works with the majority of retail brands across India, South East Asia, Middle East and China, I was able to witness these shifts in  consumer behaviour and retail trends from close quarters.  

 

Covid-19 Epidemic is Creating a Paradigm Shift in Consumer Behaviour

 

Spurred on by a trifecta of smartphone penetration, cheaper 4G networks and increasing consumer wealth, the Indian ecommerce market was expected to grow to US$ 200 billion by 2026. 

 

That projection was based on customer and market research in a pre-Covid 19 world. But in the last 2 months, both the market landscape and consumer behaviour has altered beyond recognition and there is clear indication that the industry will hit the US$ 200 billion mark much sooner.

 

Some of the key consumer behaviour changes,  according to a survey by NRF 

 

  • 9 in 10 consumers have changed their traditional shopping habits.
  • More than 50% of consumers have ordered products  online that they would normally purchase at the store
  • Nearly 6 in 10 consumers say they are worried about going to the store due to fear of being infected

 

While some of these changes are no doubt temporary, others will be permanent. As the community moves beyond the ‘survival’ mode, the digital-adoption momentum is likely to carry forward and become permanent. This inflection point will be primarily shaped by two major shifts in customer behaviour – the reluctance to mingle in crowded public places and higher propensity for digital adoption.



 

As the recent Mckinsey study in China suggests, consumers are likely to opt for online shopping  even after the outbreak ends, especially for categories such as groceries and personal care. This trend is likely to continue long after the lockdowns are called off as people would still be apprehensive to visit crowded areas like malls or supermarkets.

 

A survey by eMarketer revealed that nearly 60%-85% of internet users across China and South-east Asia have avoided crowded public places to mitigate the risk of contracting the virus.

 

 

In short, the Covid-19 outbreak and 2020 will mark a tipping point for the adoption of ecommerce and mobile commerce platforms.

 

The Emergence of a New World Order in Retail

 

We believe retail is at an inflection point – and this is the start of a  “A New World Order” in terms of how consumers shop and the way the retail industry operates. Retailers will need to be agile in adapting to this zeitgeist, since the prognosis for brands that miss inflection points is not great —cases in point, Kodak and Nokia.

 

Under this New World Order, retailers across diverse categories cannot rely entirely on their offline presence even after the lockdowns are called off. They will have to inevitably adjust to the new norms of online buying. This will become even more relevant for categories like groceries and personal care where previously the propensity to buy online was low. 

 

  • The Leaders, Survivors & Laggards in this Retail New World Order 

This “New World Order” as we envision it, could force every retailer to embrace omnichannel ecosystem and converge the operations of their online and offline stores. Not doing so, will mean suffering huge loss in revenues. So who will be the leaders, survivors and laggards in this New World Order?

 

The leaders would be agile retailers, who upgrade to an omnichannel ecosystem and constantly introduce innovative shopping experiences by analyzing the new buying behaviour. They would be closely followed by the survivors –  pure-play digital platforms who have their own e-store and are sell on major online marketplace platforms. 

 

The laggards in this race would be the pure-play offline retailers who are still waiting it out with the hopes that old buying habits and the demand will be restored post the lockdown period.

 

  • What Retailers will Need to Rethink in this New Scenario

Prior to the Covid-19 epidemic, traditional enterprise retailers were focused on driving growth, and acquiring market share with physical stores as their epicentre. Increasing traffic to their online store was not a major focus and took a backseat compared to driving footfalls to their physical stores. Brands had made peace with the volume of online orders and the reduced margins from online aggregators as long as the orders kept flowing in.

 

Historically for omnichannel retailers with both online, offline and marketplace orders (who serviced orders across a physical store, their own e-store and the marketplace) the average orders and the % margin distribution for online orders looked something like this.

 

*These numbers are based on our research data from our top 10 retail customers across China, South-east Asia, India and Middle east. We have assumed a common 30% commission for marketplace orders and the common margins observed by retailers.



Approximate Online-Offline Split in Buying Trends for Traditional Brands before the Covid-19 Slowdown

 

Type of e-orders Volume of Orders  Margin/order
Offline orders  90% 70-80%
Online orders mainly serviced by aggregators  10% 40-50%

 

As the consumer behavior changes, retailers will witness  an increasing dependency on the online orders. Projecting on some of the behavior and channel mix we are witnessing in markets like China, the volume mix will look something like as depicted in the table below. As dependency on the marketplaces increase (and hence their clout), so will the possible margins being charged by them.

 

Expected Online-Offline Split in Order Volume and Margins in the New World Order 

 

Type of e-orders Volume of orders Margins/order
Offline Orders 60% 70%
Online + Marketplace orders 40% 50-60%

 

Retailers will have two options. They can continue to fulfil orders via online aggregators and hence lose a higher chunk towards margin, and affecting bottomline. Or they can set up their own brand.com in order to restrict the revenue bleed (not to mention also reaping other long lasting benefits viz. fostering brand loyalty etc.). Nike pulling back from selling on Amazon to focus more on its direct-to-consumer business being a case in point.

 

  • Will this spell the end of Offline Retail?

As much as I claim that the New World Order will be ruled by online buying patterns, we also realize being innovative with different store formats can become a differentiator for brands competing in similar categories.

 

For instance, an omnichannel retailer can  differentiate itself from online aggregators by transforming few of the stores into experience zones to offer an experiential buying experience. We will see more of such strategies being deployed by brands on the lines of omnichannel furniture retailers like Urban Ladder and Pepperfry, but in more diverse sectors 

 

In these times of crisis, retailers are increasingly using physical stores as fulfillment centers to turn inventory over quickly and cut losses. Omnichannel retailers, who innovatively utilize their physical store space will inevitably be the winners of this new world order.

 

How Retailers can Quickly Adapt to this New World Order

 

With continued uncertainty, I predict that brands that are currently the most receptive and agile in adopting these new norms of customer behaviour will prevail than those who wait it out. So, what can retailers do to cope with these constantly changing buying patterns and quickly cope with the new world order. 

 

  • Digitization should become a priority

Based on data from our clients in China, the Covid-19 crisis has clearly favoured omnichannel retailers when it comes to minimization of the negative impacts. Therefore, offline retailers must approach the lockdown period as an opportunity to build a strong online presence. 

 

Retailers with an online presence, must capitalize on the recovery trends by introducing innovative ways of fulfilling orders – be it establishing an Online-to-Offline(O2O) platform or building sophisticated digital logistics and payment reconciliation capabilities to be in the lead in this race to recovery.

 

  • Focus on improving the visibility of own e-commerce website 

The only way retailers can combat the increasing order volumes and diminishing margins from their online aggregator counterparts would be to focus on improving the visibility of their e-store. 

 

 As part of these efforts to improve online visibility at a reduced cost, brands should also capitalize on their existing customer data to drive traffic to their own online website.  This involves using robust retail CRM and marketing automation systems to take control of existing customer data.

 

  • Become innovative with personalized engagement 

Brands will need to improvise and capitalize on online personalization efforts to differentiate themselves from their competitors and online aggregators. Personalized engagement will play an important role especially in selling essential category items (groceries, medicines and personal care/wellness items) as consumers seek increased communication and trust about the quality of these products. 

 

Brands can deploy personalized engagement beyond discounts or offers by keeping their consumers posted about their internal developments – be it about the store operations in their nearest neighbourhoods or even to just convey words of empathy and care about the current situation. For instance, restaurants can actively communicate about the hygiene steps they’ve taken to increase confidence amongst customers.  Personalized engagement platforms can enable brands to also communicate about shifting their operations online and reallocate some of the store credits that can be redeemed online.

 

To sum it up, we all knew the world was turning digital. A new order was being established. But for all we know, the pace has suddenly increased exponentially. It is at our doors, knocking down the traditional walls right now, as opposed to by 2030 as we all were expecting. This New Order will require a paradigm shift in strategy from brands. Only the agile ones will survive. Only the ‘Truly Omnichannel’ ones will prosper.