Marketers must gear up for a new era of consumer engagement, sparked by – surprise, surprise – the coronavirus, on the back of ONS research which shows most consumers do not expect life to return to normal anytime soon, and just over a quarter not sure whether it will ever come back.
According to new analysis from Enders Analysis and the IPA, published at the IPA’s Eff Works 2021 Conference, the reduction in mobility of the UK population, due to Covid-19 restrictions, is the key factor driving consumers’ new ecommerce and media consumption habits.
The report, on the theme of “Living with the Pandemic in October 2021”, analyses the economic and structural changes relevant to consumer behaviour at this stage of the pandemic and are linked with the IPA TouchPoints data on media consumption and industry sources, to help marketers increase the relevance of their communications and better assess their channel preferences.
It finds that the much deeper reduction in mobility in cities, which are more reliant on public transport than suburbs and towns, is driving segments of the population to re-evaluate their urban lifestyle.
Moreover, the pandemic has created a two-tier recovery, divided between large cities which have retained income levels and accumulated savings, but have ongoing reduced mobility, and smaller cities and rural areas, which have seen a bounce back in mobility. The part reversal of working from home should, however, perk up mobility in city centres in the coming year.
Households able to continue WFH for all days of the week are saving on average of between 25% and 30% of their weekly disposable income on transportation and out of home service activities – including services primarily for the commuter such as city gyms; hairdressers; takeaway food; cafes, etc) – widening the income distribution with workers required to travel to work.
Low-income households (the bottom 40%), however, including essential workers required to travel to work, and the unemployed, are more likely to have seen their savings fall during the pandemic, due to reduced earnings and, particularly in the case of key workers, ongoing costs of travel to work.
The report goes on to detail how the online channel allowed consumers in lockdown to supply themselves with the full panoply of goods, despite initial supply bottlenecks. Many consumers rapidly transformed their homes into offices, also expanding their capabilities to replace out of home services with in-home delights.
There was a structural increase in the online channel, too, contributing 25.5% of retail sales (excluding fuels), in both July and August 2021, thanks to a doubling of food and drink sales.
Comparing August 2021 with August 2019, which is the last normal pre-pandemic reading of retail sales, online food sales are up close to double over the same period, while offline food sales are down 0.9% (online food and drink sales peaked in February 2021, which marked a 145% increase from February 2019, the pre-pandemic normal).
Benchmarked to the pre-pandemic time of normality in August 2019, when the share of online in retail stood at 18.1%, the new figure of 25.5% share attained in July and August 2021 remains a huge leap up for the online channel. This could be a new baseline for the online channel, and thus associated marketing mechanisms, the report says.
One major trend during the past 18 months has been the wider and deeper engagement of older consumers with the online channel, mainly due to necessity during lockdowns, but also due to their exposure to pandemic risks prior to the successful vaccination campaign.
This implies an increasing need for brands to engage in an even better understanding of how online channels can drive discovery and brand-building objectives. It also explains booming expenditure of marketers generally to the online channel to encourage discovery and purchasing.
Other implications of the structural shift to ecommerce include direct-to-consumer (D2C) marketing and distribution on the open Internet, including associated advertising media, or distribution through Amazon.
However, the study is quick to point out the resurgence of direct mail. During the pandemic, as a result of WFH and spending more time at home, engagement with mail was higher than ever, reaching 96% (up from 91% the year before) according to Jicmail.
The increased engagement with mail was actively recognised by consumers, with 88% of people reporting paying as much or more attention to mail during lockdown.
In addition, the gulf between the media touchpoints of the “young” (25- to 34-year-olds) and those of “older” (50+) audiences, centred on live broadcast TV, has never been larger.
But marketers still have the opportunity to stimulate brand building in the conventional video style of TV ads.
Enders Analysis head of research Dr Alice Enders said: “For marketers to grasp these changes, and their ebb and flow in terms of the opportunities for channels available to them, greater investment is required in tracking high-quality and wider sources of evidence, and that’s among the ambitions of this report.”
Director of marketing strategy and executive director IPA Eff Works Janet Hull concluded: “As the evidence from this report reveals, the UK’s journey through the pandemic continues to wreak profound changes to the way people live, work, shop and consume media, with the majority of consumers expecting the old normal to be postponed for at least six months to a year, perhaps never to return.
“As the population continues to modify behaviours in response to changing times the onus is on marketers to use evidence-based decision-making to adjust marketing and communication strategies to stay ahead of the curve.”
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