Demand-Side Changes

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How buyers and the buying of research will evolve in a post-COVID-19 world

Many agencies agree that COVID-19 represents such an upheaval to markets that it will prompt a complete rethinking of corporate strategy, and implicitly this should provide opportunities for market research companies during the recovery. Marketing budgets have typically been directed towards campaigns, and while ‘marketing’ is still expected to receive the majority of spending, in the shorter term, research could see an increase in its share of the marketing budget, as corporations are now less sure about their target audiences and how best to reach them.

Asia Research Media has obtained the views of a range of supply-side organisations on how they think clients and their demand for research will change going forward.

Regardless of how much budget corporations decide to give to research, they will rely more heavily on their insight departments to help them through the crisis and the recovery. This will increase the status of insight departments in the longer term, and it is a golden opportunity for clients to promote the benefits of research and consumer insight within their organisations. Could we see a new type of CIO on the Board of Directors: the Chief Insights Officer?

The other issue is how soon clients will feel confident in moving forward with new marketing. Mike Sherman comments that clients could be slow to re-engage with their markets, but he highlights that brands who invest more during downturns emerge disproportionately stronger in the recovery.

A business survey conducted by BVA BDRC in Singapore in May shows that corporations will focus more on existing markets post-lockdown, and scale back business development in new markets. GMO Research concurs and says that many industries will focus their campaigns on targeting existing clients to let them know that they are appreciated. Such campaigns will forge a stronger and longer-lasting relationship on the recovery.

Theoretically, clients should start by redefining their markets through segmentation research, online tracking, and, ultimately, programmatic marketing. But they might make the mistake of rushing into new product development (NPD) and concept and ad testing research without first redefining their markets.

But regardless of whether clients redefine their segments, COVID-19 has already paused product launches, so there should be a surge in NPD research during the recovery. ABN Impact | InSites Consulting comments that clients will need to innovate in terms of both products and communication.

GMO Research has pointed out that there will be changes in the housing market. Firstly, in location – demand for housing will shift to the suburbs as people will work more from home and will not need to commute to business districts; in fact, commuting itself will be discouraged. Secondly, with consumers spending more time at home, there will be changes to the home environment. Ad spending (and research) in internet services, e-commerce, home offices, and home entertainment will increase.

Who will the buyers be?

Opinion is somewhat divided on which clients will have the most appetite for research. Some sectors have weathered the storm quite well and will therefore have more budget to spend. Those most adversely affected, such as the travel and tourism sector, will probably need more research to assess how markets have changed and how best to adapt to a post-COVID-19 world. But lack of revenue also means lack of budget, and research has been cut, along with most marketing-related activity in this sector.

2CV says that technology clients will be some of the first to increase spending on research after the crisis, as this is where the demand will be. YouGov adds that supermarkets, food delivery services, and e-commerce have done well in the crisis and will seek ways to sustain their business when the “competition of normality” returns. Those companies with deeper pockets will seek to gain “data advantage” (e.g. having greater insight on the recovery).

The crisis has also brought about a change in consumer behaviour and attitudes, for example in relation to value and associated price sensitivity. GlobalData points out that food and beverage markets, which have also fared well in the crisis, will need to change emphasis – for example, fewer consumers are buying on-the-go snacks, home cooking is increasing, bottled beer sales are up, and many consumers will continue to avoid bars and pubs even when some reopen after the lockdown.

BVA BDRC is currently surveying the retail market in Singapore and reports that 54% of consumers have increased their online purchasing during the lockdown (including 3% of consumers shopping online for the first time), 50% have started using retailers that they had not shopped with before, and among these, 42% have used dedicated online retailers (with no stores). 33% of consumers state that they will continue to buy online more than they did before the lockdown.

That said, people are also looking forward to shopping again, with the key motives being to evaluate products better in store than online, the general fun of shopping, to get out of the home, and even to find air-conditioned environments elsewhere! Mike Sherman points out that, while traditional retailers are seeing more people buying online, they will also need to find new ways to entice people back into stores by making traditional retail more compelling and exciting.

BVA BDRC says that there is also expectation from consumers for retailers and even eating outlets to start anew. Based on the BVA BDRC retail survey, around 25% of consumers will be “seeking something new” in both retail shops and eating outlets after the lockdown, which will demand more innovation. The recovery could give a sense of ‘renewal’ to people, allowing them to find things to be more optimistic about. They will seek out new products and menus in order to feel more positive in a post-COVID-19 world, even when there is lingering negative economic fallout.

IBM Services states there is pressure for corporations to reduce headcount and costs, but they will invest more in AI and automation, meaning that customers will need to self-serve more in the future. ABN Impact | InSites Consulting concurs that many sectors, including financial services and some consumer goods, will see greater acceleration in digital and self-serve channels, but if customers want to use these services, then corporations will need to optimise their online service channels though more UX research.

What is clear is that the market research industry will be ‘rebooted’ in many new directions, and supply-side organisations will need to adapt or die. Our next feature on Supply-Side Changes shows how this could be done, the likely winners and losers, and the potential new contenders coming in to serve the new market with consumer insight.

By Piers Lee LinkedIn, Deputy Editor of Asia Research