Supply-Side Changes

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How suppliers and types of research will evolve in a post-COVID-19 world

The third article in our series about how COVID-19 will change the market research industry in Asia looks at the implications of the demand-side changes for the supply side of the industry. This includes how research/insight agencies should adapt, and the research solutions they will need to deliver in a new market.

Based on contributions from a range of supply-side organisations in Asia, we have summarised the main developments that are to be expected:

  • More data/informationYouGov highlights that there will be a demand for more economic data in order to see how industries are recovering in a post-COVID-19 world, or to prepare for the economic aftermath. In addition, governments, the public, and corporations will want data on public health, some of which will have to be made available for free. Toluna says clients will want to analyse the biggest question mark in any business currently: consumer demand. When will consumers be ready to consume, what will they consume, and why?
  • More online research – This has been well established through panels and insight communities, but digital qualitative research will see major growth post-COVID-19. Due to the lockdown, clients have been ‘forced’ to use this method, and many have bought into it. Online qualitative research will see a sustained higher share of research going forward, but 2CV argues that the “rush to online qualitative” could expose flaws in this method and cement the value of doing face-to-face qualitative research. GMO Research says hybrid online quant/qual methodologies will see huge progress and will achieve harmonisation. For example, conducting online quant surveys and after identifying subjects with unique insights, continuing to probe more deeply through online IDIs or IHUTs, with live online video interviews.
  • Change to traditional project cyclesABN Impact | InSites Consulting comments that the markets have been so fundamentally disrupted that corporations will have to introduce a wide range of products. Instead of traditional ad hoc research going through a single stage of survey and analysis, more iterative research will be needed to aid product innovation. This could include continuous, programmatic, asynchronous insights (e.g. blogs, forums, diaries), as well as synchronous insights (e.g. live chats). They also say that clients will need to adapt to more continuous and iterative types of research. This could mean that clients will do more DIY research, such as Qualtrics (partly to save cost), or will develop closer partnerships with ‘Do it Together’ agencies, who empower clients to do some things themselves but who offer help in specialist areas to gain deeper insights. Toluna agrees, and states that research will be smaller ticket, faster, and more tactical than strategic, at least in the short term. GMO Research adds that brands that are successfully engaging their existing customers are steadily growing their online sales and even experiencing support from their engaged fans. As such, research methodology such as online communities that provides an opportunity to create a stronger bond between a company and its consumers will become more important.
  • AnalyticsDuxton Consulting says that there will be more emphasis on “hard data” going forward. This includes transaction data and tracking of online behaviour, all of which will become more plentiful as consumers switch more to online purchasing. They point out that organisations that have access to more online transactions will emerge stronger in a new era of “data supremacy”. But they will need new skills, different employees, and consultants to leverage this data effectively. Analytics will be more important than ever, potentially replacing many of the traditional trackers. Opinion research will still have its place, but could play second fiddle to analytics.
  • Tracking apps – Due to the crisis and the need to sign in and out of buildings, consumers have now become more accustomed to being ‘monitored’ and therefore might be more willing to be tracked, including in their online behaviour. Toluna points out that consumer spend through smartphones has multiplied, and as such we expect clients to be even more interested in behavioural research/path-to-purchase when buying online.

How suppliers have reacted

Mike Sherman points out that corporations that invest in their brands will see disproportionate benefits in the recovery. The same is true for research agencies. But similar to the corporations that they service, agencies have moved quickly to cut their costs by letting many staff go – staff they would have needed to rely on during recovery.

But research agencies have had the foresight to invest in their own research (although this could be partly due to having more time for their own R&D work) and to generate discussion points with their clients via content marketing. The clients themselves are more dependent on this content during a period when they are not commissioning any of their own work.

Mike Sherman adds that the lockdown period is also giving agencies time to reinvent themselves, as they are less busy with their usual tasks. Their focus will be on what will be the more profitable business going forward and how best to revise their product offering.

2CV points out that much of the new research will be about understanding what represents real change in consumer behaviour. From traditional Q&A research, consumers may not be able to distinguish between what they ‘normally’ do and what they have been doing differently during the various stages of the crisis. This could place more importance on measuring actual behaviour (e.g. cookies for tracking online behaviour).

Who will be the winners and losers?

We need to consider which type of agency is best placed to weather the storm, and which will be able to adapt to the new market opportunities that present themselves to the industry.

Theoretically, the larger agencies should be better able to weather the storm as they are more supported by annualised contracts such as regional trackers and have access to financing to keep themselves afloat during downturns. That said, venture capital companies may have already loaded some of these companies with debt for the purpose of paying for their original acquisition, so let’s see what happens!

If there is more demand for analytics, the larger agencies will seek this share of the market, with smaller agencies specialising in more tricky research that larger agencies are not able to deliver, or where clients are seeking the more practical applications of research for business.

Smaller agencies, on the other hand, are more nimble and can alter their teams and approaches more quickly. Much of their overheads are accounted for by the salaries of the owners of the business, meaning that they can implement high salary sacrifices without pushback from staff who are not invested in the company.

Hence, many concur that mid-sized agencies specifically could suffer the most from the crisis as, compared to their smaller counterparts, they have much larger financial commitments (e.g. leases for larger offices and fairly high headcount), but do not have the solid recurring revenue of the larger agencies. They may also be heavily staffed with expatriates, many of whom are not covered by government financial assistance, such as the Jobs Support Scheme in Singapore.

Duxton Consulting says that new players could emerge on the supply side, particularly if new demands open up and agencies are not there to serve them. Tech companies could be seen as the ‘go-to’ companies for research delivering advanced analytics and AI. Also, as budgets are cut, we could see media companies trying to offer analytics as an additional service to cover lost ad spend. YouGov concurs and says that media companies will be keen to leverage their data to provide advisory services to clients.

GlobalData points out that there have been far fewer cash transactions during the lockdown, with more transactions having moved online. Cash will make something of a comeback as retail opens up, but there will be far more data on transactions that are traceable and trackable, and organisations with access to this data will seek to monetise it. Conversely, if online transaction data is marketed at a lower cost, those that have sold traditional forms of transaction data (e.g. point of sale) could see subscriptions fall.

GMO Research says that suppliers that can help companies reinforce brand equity will be in demand – for example, those that can support day-to-day consumer communication, picking up on requests/complaints and making quick improvements to services/products to gain loyalty among consumers, all backed up by data integration and analysis.

Overall, everybody agrees that clients will have much more data available to them, and some of this will be free. While there is a demand for more analytics, the question remains as to whether clients will really be able to see the insights while being overloaded with so much information. Therefore, agencies will also need to become advisors, helping clients not only to identify the insights, but to pinpoint the marketing and business opportunities they provide.

By Piers Lee LinkedIn, Deputy Editor of Asia Research