From prediction to preparedness: navigating the next normal (whatever that is)
Put your hand up if - at the start of lockdown - you predicted that in a few short weeks we’d all be experts at virtual pub quizzes, supermarkets would be completely out of flour, and priests would be baptising people with water pistols?
The impact of COVID-19 has completely changed the way we have lived over the last few months. The behaviour changes we’ve seen are way too many to count, and the marketing literature is full of articles and opinion pieces about the ‘new normal’. Some of these new behaviours are sure to stick, most of them probably won’t. The question is, which ones—and among which people, and to what extent? If you’re a brand, getting all of these guesses right is impossible.
Even if we could predict all the changes, prediction isn’t enough—we need to figure out what to do about them in order to grow. So let’s forget about making perfect predictions, and concentrate instead on getting better at identifying and responding to signals of opportunity. That requires a change in the way that we think about and plan brands.
Understanding the opportunities presented by COVID-19
There will be many behaviour changes resulting from COVID-19. Some have happened already, some haven’t. Some will offer temporary opportunities for brands, some sustained. The first step in understanding the potential opportunities is to identify which are which. We need to make sense of the patterns in what people are doing now, to see which are likely to translate into lasting opportunity (for years), and which should be exploited in full during a limited window of opportunity (for weeks or months).
Broadly there are two types of changes happening in category behavior:
REPLACEMENT BEHAVIORS: Finding new ways to do the same things
Think socialising via Houseparty, ordering groceries online, doing PE with Joe Wicks, releasing blockbuster movies straight to on-demand rental, and yes, even priests baptising babies using water pistols.
DISPLACEMENT BEHAVIOURS: Finding alternative things to do instead
These two types of behaviour differ in how easy they are to predict, the factors that impact whether they will sustain, and how clear-cut the response is from a brand perspective.
Predicting and responding to replacement behaviours
People are ingenious at finding new ways to fulfill basic needs while observing various social distancing and ‘stay at home’ guidelines. But the key thing is that what we’re doing hasn’t fundamentally changed, only how we do it.
In many ways, these ‘replacement’ behaviours are relatively easy to predict. If we can’t get on a plane to go to a meeting face to face, it’s not a huge mental leap to assume that meeting will probably be replaced by a video call. Similarly if gyms are forced to shut, it presents a relatively obvious opportunity for at-home fitness solutions. In these cases, there is a clear brief for what replacement alternatives need to achieve, and relatively clear constraints they need to operate within.
So which replacement behaviours will stick once the original alternatives become available again? This becomes a relatively straightforward equation of reward vs. cost. How well does the substitute behaviour’s experience compare to the original one? Is it cheaper? Less risky? If the experiences are equivalently rewarding, then the comparable cost and risk benefits of the alternative will determine whether I keep it up. But where there is an experience gap, it becomes a trade-off—how much extra am I willing to pay, or how much extra risk am I willing to endure, for a better experience?
Using this framework it’s easy to see how some solutions are more likely to persist than others—and how some categories might change as a result. I imagine there are groups of people who have tried shopping online for groceries for the first time during this pandemic, and actually discovered that it’s not just quicker and easier, but less risky too. If they can put up with the effort required to learn the new skills they need to do it (which COVID-19 has more or less forced), then why go back to the grocery store?
The degree to which categories will change varies for different segments of consumers in a category. Perception of reward versus cost is a very personal thing; and even for the same person the same trade-off might have different outcomes if it’s motivated by different occasions.
Depending on how these play out, we could potentially see big changes to the dynamics of categories. For example, if large businesses ban or heavily restrict international business travel, then airlines would lose most of their most lucrative opportunities, and need to fly more passengers to break even, driving the airline industry down a path of cheaper prices and more bums on seats. Whereas if we see much more defection of low-priced travellers, with people who would usually go to Europe choosing instead to vacation domestically, we may end up with a premiumisation of air travel, reserved for only those occasions where the cost and risk are really ‘worth it.’.
As a brand affected by replacement behaviour, your job is simple: how do you engineer that value equation to your benefit? If you are winning in the short term, how do you make new behaviours stick? You need to reinforce their value, and create habits. If you are losing in the short term, how do you win people back when you’re able to? You need to remind people of why they did it this way in the first place, and make it easy and rewarding for people to switch back.
If I were advising Zoom right now, I’d be probably be telling them to talk about how online meetings can help companies meet their CO2 reduction targets. Give businesses a reason over and above cost-cutting to encourage continuation of a behaviour that’s currently being forced on them. Whereas if I were Virgin, I might be considering putting my ‘Let it fly’ creative back on air, reminding people of the impact and importance of the in-person pitch. How a brand responds depends on whether they are trying to get people to switch, or revert back, and the assets they have at their disposal to tip the value equation in their favour.
The job for brands in categories that have been disrupted by replacement behaviours is to:
Understand perceptions of the trade-off being made
Identify your assets in the value equation
Find the occasions and segments with whom you can win most easily
Predicting and responding to displacement behaviours
In contrast to the relatively simple trade-offs involved in replacement behaviours, it is much harder to predict what activities are going to pop up as ‘displacement’ activities—things that people choose to do with their time that they wouldn’t normally do. Some of them, like cycling and outdoor exercise, have been actively encouraged by authorities, so are less surprising. But others, like the boom in bread baking, would have been much harder to anticipate. People didn’t suddenly start baking to replace shop-bought bread, they started baking as an activity to do with their new-found time at home.
For someone to have predicted that a nation-wide order to shelter at home would result in sustained flour shortages in supermarkets, they would need to have identified that people would be looking for entertainment options within their own home (easy enough to do); predicted that baking would prove a popular antidote to stress (again, a relatively easy leap); predicted the attraction of bread in particular (harder); anticipated this might lead to yeast selling out and becoming a rare commodity (a logical step, but not that obvious); seen sourdough emerging as an alternative (requires some lateral thinking); noticed the capturing and sharing of sourdough starters on Instagram becoming a ‘thing’ that amplifies the trend (more unpredictable); and anticipated that people’s emotional investment in having to care for their starter daily means the behaviour is more likely to stick even when the initial panic is over. Not impossible to predict, but not exactly self-evident.
But just because displacement behaviours are harder to predict doesn’t mean we can’t anticipate what they could be, or be ready to jump on them when they arise.
Displacement activities, where one thing is replaced by something entirely different, are just more complex trade-offs, which means you can’t look at them through a standard functional replacement lens. With replacement, you are trying to do the same activity in a different way; with displacement, you are doing a different activity to achieve the same underlying goal.
This means completely different categories are now competing with each other for the same chunks of consumer time. Baking and tennis are competing for people’s leisure time. Disney+ and jigsaw puzzles are competing as options to keep kids entertained.
Against this backdrop, it means that as brands—and particularly brands in categories seen as optional, or discretionary—we are no longer competing for a share of specific activities, but for their share of consumer time. And often competing at a category level, rather than just between relatively homogenous brands. So ‘winning’ in these scenarios involves thinking beyond just your own brand and category.
There are three ways to gain from displacement behaviours:
1. Anticipate new category opportunities, don’t wait for them to be forced on you
Think beyond your category and more in terms of human needs. Which needs are you—or could you be—fulfilling?
Think about when people choose not to engage with your category. What else do they do instead? And vice versa—are there any alternative needs you could be a solution for, but you’re just not thought of in that moment?
Sometimes getting to this level of thinking is relatively straightforward. Ryvita were clear early on that they weren’t competing with other diet crackers, or even other snack foods, but with other things people might choose instead of a snack, if they were looking to lose weight. Hence identifying that one of their key competitors is actually Diet Coke. Likewise, chewing gum has successfully been marketed to smokers trying to quit, to give them something to do with their hands.
But sometimes anticipating displacement involves thinking more fundamentally about why people might engage with a category at all. What is the need you are fulfilling, and what is it that makes you the answer?
Marketers need to evaluate new behaviours in light of motivations. Has the increase in cycling come from people not having access to gyms and wanting to stay fit, or has it come from a feeling of freedom in a world where viable transport options are limited? These different needs would have very different implications for the likely longevity of the behaviour in a world where gyms do re-open, but the threat from the virus persists.
2. Move from thinking about ‘Category Entry Points’ to ‘Category Opportunity Points’
Stop thinking about how your brand wins in its category, and instead how you can help the category win against others in moments of decision
Anticipate new ‘Category Opportunity Points’—occasions where consumers make an active choice between engaging with the category or not—and wargame what could sway their decisions one way or another. Think about what it would take to win in new occasions - and conversely, how could other brands or categories steal occasions from you? How might you start to understand your category’s salience, and strength of associations with critical opportunities? How do you maximise your share of salience at Category Opportunity Points? What nudges or prompts might make someone more likely to engage at one Opportunity Point versus another, that you could incorporate into your activation?
3. Understand how your brand wins
In occasions where a category has new potential opportunities, understand your assets as a brand and the best way to win your share of them. There are several ways in which brands can gain advantage at Category Opportunity Points:
Win by winning
The first and most obvious way to win a greater share of occasions than anybody else is to be the biggest brand in the category. The more opportunity the category has, the more you benefit ahead of anyone else. Subscriptions to all streaming platforms have gone up as a result of increased video consumption during lockdown, with the obvious and biggest beneficiary being Netflix, who added nearly 16 million subscribers in Q1 this year—more than double what they had forecast under normal scenarios.
Win through product difference
If you’re not the biggest brand, however, one of the easiest ways to win more than your fair share of scenarios is to have—and promote—relevant product differences that make you more suited to that specific occasion. Disney+ for example, found themselves in an unexpectedly lucky position of launching in many markets with a platform primarily dominated by children’s content, at a time when children all over the world were quarantined in their houses, and not at school. In this context, whilst people might ordinarily think paying for an extra subscription on top of Netflix, Amazon Prime, and whatever else they subscribe to already may be a step too far, suddenly with hours of children’s downtime to fill, £5.99 per month seems incredibly cheap compared to employing a real-life Mary Poppins.
Win through short-term promotion
Similarly to replacement behaviours, if you think what you’re seeing is only a short-term, temporary advantage for your category, and you’re not the market leader, then it’s viable to use promotions as an opportunity to try to create new habits and increase penetration and trial of your product. For example, the sudden boom in at-home, internet-streamed workouts becomes a huge opportunity for a brand like Peloton, not to sell more of their relatively expensive equipment purchases (although they quickly sold out of all stock when it became apparent that commercial gyms were going to be closed for a while), but for their app-based instructor-led workouts, covering everything from yoga to running to meditation. With immediate competition from the many gyms and instructors offering online content for free during this time, Peloton decided to make their app free for 90 days to trial at home, leading to 1.1m new downloads (and presumably a huge increase in trialists) in a six week period.
Win through association
Sometimes it’s OK to jump on a trend! In situations where you see new opportunities arising for the category, then often being the first to build associations with the occasions and need states that it is servicing can drive short-term gains. The success of the Houseparty app coincided almost exactly with the realisation for many during lockdown that you could still have a drink with friends on a Friday night, just without the bother of leaving your own home. Prior to the pandemic, Houseparty was a purely Gen-Z hangout (ninety percent of users were under twenty-four), and a mid-tier player in the video-calling leagues. Its strong association with socialising, and differentiating itself from the (arguably functionally better) platforms that many of us are spending our lives on during working hours, propelled it to success. The app gained fifty million new users in a single month, and became the virtual living room to Zoom’s virtual office.
When you can’t predict, prepare
We can’t always predict the future. But we can prepare ourselves better for opportunities it may present. None of these require fundamentally new skills, it just reminds us to think beyond our current status quo and evaluate the alternatives in terms of behaviours and needs, not just through the lens of traditional category dynamics. This is just good planning. But planning is an under-used resource. Ask more of your planners by setting them the task of finding category opportunity points, understanding share of occasion, and building strategies to grow share by winning at those points.