Are you agile enough to move with the changing consumer?

COVID-19 has changed customers’ values and behaviors, their experiences and their expectations of brands. How companies respond will determine their success in recovery.

COVID-19 is first and foremost a humanitarian tragedy, and is impacting people on a deeply human level. For many people, it has changed priorities around what’s important, while others face ongoing financial uncertainty. Consumers are changing how and when they shop, with many using multiple, digital channels on a greater scale or for the first time. Many of these behaviors will stick. When the world reboots, we’ll have a new operating system.

Brands and organizations must keep a finger on the pulse of these new needs, putting humans at the center of their response, while embracing technology at speed and innovation at scale.

Adapting operations

Within just a couple of months, we’ve seen global lockdowns push customers to adopt digital channels at a faster pace than might otherwise have been anticipated. Pizza Hut took the first e-commerce order in 1984. Despite 36 years of explosive digital growth, e-commerce penetration of the grocery market in January 2020 was just 5.8%. In March 2020, this had risen to 7.4% and by April to 10.2% - almost doubling the market size in just a few months. Many companies have been unprepared for this rapid shift,¹ and even those with established digital channels have been challenged to take sales and service delivery entirely online.

With most companies reliant on a strong physical presence, they must work out how to deliver sales and services across a wider range of channels – face-to-face, outsourced, automated and self-service.

The pandemic has also driven customers to rethink – and raise – their expectations of how organizations behave in a crisis. People expect organizations to respond in a positive way and to share what they are doing.

Adapting operations to meet these challenges includes several key actions.

1. Create the best digital touchpoints for each step of your customer journey, from acquisition to conversion to loyalty. Digital touchpoints have become more important during lockdown conditions but will remain critical for organizations to stay relevant during a prolonged period of recovery. Businesses can prioritize their investments in technology and transformations by developing customer journey maps to identify where physical touchpoints can be replaced by digital ones to add the most value to the customer experience.
2. Build remote and virtual sales/service models to keep customers engaged. You need to design and implement ways of working that support this approach. This might include creating a central help desk, equipping people with better collaboration tools, and producing content that helps customers solve problems themselves.
3. Create relevant brand messages that are consistent with your values. Articulate your response to the crisis and deliver it across a prioritized set of channels. Companies will need to be mindful of ensuring communication is strong and consistent to mitigate the risk of brand damage while balancing the challenges of new operating cost restraints.

Building resilience

Organizations must be able to track and measure deep and dramatic changes in customer needs and sentiment and be ready to respond through quickly rethinking how they offer and deliver products and services. The legacy of COVID-19 will drive significant changes to operating models – customer-facing models may be less effective even once conditions normalize. Organizations will need to consider key changes to build greater resilience:

• Develop new ways to improve your customer focus. Build ongoing customer insight platforms that help you identify opportunities on product feedback/listening.
• Scale new services created through e-commerce/digital channels. They could be stand-alone or sell-with propositions that create more value from the products you sell already. Think about accelerating a move to sell direct to the consumer (D2C). In New Zealand, EY worked with an alcoholic beverage company to go live with a new D2C e-commerce platform in seven working days. Create new products and services that meet emerging customer needs. For example, Heineken saw its consumers were missing live music so began livestreaming DJ sessions into people’s homes. 
• Equip your teams with tools that help them to collaborate effectively. The “virtual culture” in your organization needs to reflect your purpose, ethos and “in-person” culture. Support new ways to work through building project and employee onboarding programs.