As the coronavirus continues to wreak havoc on lives and economies the world over, trends are emerging that could change consumer habits well beyond the timeframe of the pandemic. When their favorite brands are out of stock, consumers are increasingly turning to store brands and generics to meet their needs.
Consumers still have their primary needs, they still need soap, milk and toilet paper, but they are less concerned about secondary considerations, such as brand names. Bounty paper towels may be the brand of choice during times of plenty, but when one finds off-brand paper towels available when none others are, consumers are snapping them up without batting an eye.
Store brands and private label products have already been increasing their market share over the past few years, with companies like Trader Joe’s, Costco and even Walmart giving them more prominence in their stores and advertising. These brands and products have become ways for retailers to differentiate themselves through quality offerings instead of just value options.
The question of how this crisis will impact brand loyalty looms large. Brand loyalty is something that is built during the good times to hopefully serve your business in hard times. During the 2008 financial crisis, brands that fostered loyalty suffered less than those that didn’t.
During times like these, brand elasticity also comes into stark focus. With consumer spending taking a nose-dive amid record unemployment, brands will have to grapple with how to drive purchasing. Marketplace estimates that the consumer economy represents up to 70% of all economic activity.
With fewer people making discretionary purchases either because they cannot afford it or because they are simply not available, how habits change once the crisis is still not completely understood due to the unprecedented nature of the predicament.
It remains to be seen how the consumer economy rebounds from the pandemic, but brands and marketers need to operate under the assumption that some old habits may not return and some new habits will be hard to break. In this new world of consumer behavior, businesses will be entering previously uncharted territory and may have to learn to walk all over again.