How did the pandemic influence big FMCG shopper marketing strategies and budgets?

In 2020, the retail industry experienced rapid and widespread changes as consumers chose to stay home due to the health crisis and turned to e-commerce for their everyday needs.

Today, retail marketers are forced to consider these changes and come up with scalable solutions for the marketing strategy of the near future.

Opinion written by Roxana-Elena Stefan, Client Service Director Mediascope.

Campaign budgets have been drastically cut since March 2020. In the first months of the pandemic, many brands were afraid to invest in trade campaigns, the feeling coming mostly from the uncertainty of the context imposed by the pandemic. Many projects were put on hold, as well as many product launches. During the summer we saw a slight recovery, but budgets have not yet returned to the pre-pandemic stage. Brands are and will remain careful of their expenses.

However, according to our market analysis, brands which chose not to step back are the ones that had something to gain. Maintaining a constant level of investment has translated into higher volumes compared to the previous period, since the competition for consumers’ attention has dropped. In other words, investment rates like those in the pre-pandemic period have ensured a significantly higher visibility in the last year, which has led to increased sales.

Mediascope works with a lot of businesses from the hospitality industry. From your perspective, how has the HoReCa industry in Romania changed in the last year?

We have noticed several fundamental changes in consumers, and the most important feature is “sense and sensibility” – a shift of paradigm in consumers’ relations with brands. And the key word in this approach is trust.

Firstly, we are talking about emotional trust, the connection that people want the feel with the brands they buy, the fact that these brands understand them and communicate in the most direct and humane way possible (especially now, when distance and inability to relate have let to anxiety), and at the same time, they offer them relevant products suitable for their actual needs.

The second side of trust is functional, the safety-related one: quality of the product and a fair price, which tackles the need for financial security in a volatile environment.

Looking back at the last year, we can talk about certain trends in terms of consumer behaviour that have taken shape quickly. The consumer developed a series of motivational strategies to cope with the new context, which translates into actions and behaviours. The three most important trends that we have noticed in the last year are:

  • Staycation

    The restrictions which have defined much of 2020 have shaped a new habit of “going out”. Now we invite friends to our homes, a habit which led to a premiumization of typical consumption. Firstly, because of the desire to impress our friends and, secondly, because of the emergence of a disposable income generated by the price difference between products sold in stores and prices in the HoReCa locations.

  • Responsible consumption

    We see a revitalization of trends related to the environment and pollution, motivated by the need for efficiency: less time spent in stores or the need to cut on expense by only buying what they need.

  • Regaining control

    At a time when much of everyday life is controlled by imposed external rules, consumers want to be able to regain the security of their own decisions, both emotionally and functionally. For example, they don’t want to lose money on booking a vacation they can’t enjoy anymore.

Brands reacted to these changes

Considering these, Retail brands have adapted to the new requirements of consumers. What I noticed in many cases were the voucher prizes offered to consumers by companies in this sector, so they can buy anything they need based on a virtual ticket. In this way, several criteria were met: if the campaign stopped due to pandemic, the vouchers were no longer purchased; therefore, the loses were 0. The consumer could also buy various goods and the brand could set the amount, thus responding to their need of regaining control over their decisions.

Moreover, we’ve seen a growing demand in special projects and experiential activations in the last year. The brands wanted to be seen, and at the same time, they wanted to strongly differentiate themselves from the competition through innovation. At the same time, due to the limited possibilities to explore, to experiment, consumers responded very well to such activations because they were an escape from everyday life, a special experience integrated in the usual context, responding to some needs which would otherwise be more difficult to meet.

The last part of the year brings many promotional periods, such as Back to School, Black Friday, or Winter Holidays. It is interesting to see if these periods still represent a point of interest for brands. We believe they will. The consumer is more prudent now in his purchases, as the quality of the products becomes extremely important, but he also remains very sensitive at price changes. Efficiently managing budgets in the pandemic is a must.

However, a strong presence, both online and offline, as well as a clear communication, can positively influence consumer journey.

Recommendations for brands

Although e-commerce has taken off in the last year, physical stores remain an important meeting point for consumers, and brands should consider these locations in their marketing strategies. Presence at the shelf is essential. Sales in physical stores can be influenced by out-of-the-box communication materials, whether we refer to shelf stoppers and products display or large materials, such as alley placements. These should encompass a total experience of the senses.

Also, the presence of brands in-store must be based on two fundamental principles: creativity – give consumers a great experience, help them escape from everyday life, and relatability – speak the language of consumers, show them that brands understand them. It takes two to tango.

The future will be for brands that will no longer talk about physical stores versus e-commerce. From actual sales to promotions or brand experiences, we believe in online-offline integration. This principle influences people’s behaviour in everyday contexts and it is important to activate the two components in trade marketing strategies.

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