Round 2 Outlook
Only time will tell if there’s a COVID-19 second wave but, for now, some brands and local merchants are pretty confident about the future based on the results of a recent study by Morning Consult, a global intelligence and research firm.
The study of 4,400 adults from the U.S., conducted in late April, revealed that 71% believe they’ll return to the same brands they patronized before the pandemic. Another 64% said they expect to use the same channels and platforms. What was encouraging for local shops and producers was that 50% said they expect to frequent local restaurants, while another 59% expect to buy more locally produced products.
What’s not surprising is that consumers have been spending more online. The survey reported an increase between 28 to 37 percent, the higher numbers coming from high income and higher-educated groups. Much of that pattern is expected to continue as only 20% of respondents said they expect to resume shopping at malls.
Online spending in six categories measured by Morning Consult turned upwards the third week of April after seeing declines They included meal-kit services, relation type products, microwave or ready-made meals, non-alcoholic drinks, snacks and junk food, and personal care goods. The last two categories showed the biggest increase at 7% each. This gives further cause for some brands to feel optimistic that many of these consumers will continue to buy online.
Direct to consumer brands, on the other hand, didn’t experience much of an increase. The survey found that sales remained fairly flat among the DTV chains with sales even dipping a bit at Poshmark and Wayfair. On the other hand, baby and beauty products firm The Honest Company, reported a rise in sales since the pandemic. The difference between them and Poshmark may be because of The Honest Company’s stated mission of delivering clean and safe goods while consumers may have been apprehensive about buying at second-hand marketplaces like Poshmark.
As things return to some form of normalcy, DTC brands will need to elevate their focus in providing exemplary customer service and experiences, high-value goods, and continued significance to their target audiences. This will help build on any momentum that began during the pandemic. Wayfair, for example, reported acquiring almost a million new customers so far this year but the average sale per customer dropped.
Morning Consult also measured consumer confidence of seven DTC brands every other day from early March till early May. The question explored the issue of trust consumers had that each brand was doing what was right.
For that period when the pandemic was officially declared on March 13 till the end of the study, six of the seven had either maintained or improved their consumer confidence levels. Only one, Wayfair, saw a decline. Chewy, an online pet food and pet supplier, and Stitch Fix, an online women’s tailor, showed the most gains.
Maintaining good and personalized customer communications and continuing to nurture that relationship will help ensure that the consumers will stay loyal. What may help immensely is learning what the brand could do to play an even bigger part of their consumer’s lives and becoming a more compelling part of it.
Ronn Torossian is the CEO and Founder of 5W Public Relations. 5W PR is a leading digital pr and influencer marketing agency.
