It's not just the pandemic influencing consumer decisions on whether they switch from national brands to store brands. A new report from global consultancy firm Ketchum, "Brand Reckoning 2020: How Crisis Culture is Redefining Consumer Behavior, Loyalty and Values," found that, yes, COVID-19 has impacted consumer choices — 63% of shoppers surveyed in mid-June said they will purchase more private brand items in the future — but that the ongoing conversation around racial injustice is having an equally marked effect on their behavior.
In all, the study showed that consumers are taking a hard look at the brands they support. For example, 45% of the respondents said they have changed at least one brand preference already and 62% will be making a change permanently. Looking at that number, store brands seem to be having a lot of sway, as the study found 63% of respondents said they will permanently switch to a store brand.
Adding to pandemic-induced national brand woes, the racial injustice protests also are impacting which brands they support with their money. Nearly 75% of U.S. respondents in the study said the recent protests against racial injustice have made it more important to support businesses that improve diversity and inclusion. A number that high might help shed some light on just why brands and retailers were quick to finally pledge investment in diversity and do away with offensive branding, i.e. Aunt Jemima and some Trader Joe’s lines.
"We're living in a crisis culture that is driving people to revisit many long-standing values and behaviors – everything from the brands they buy to how they evaluate companies on their handling of COVID-19 and systemic racial injustice," said Mike Doyle, president and CEO of Ketchum. "It's a brand reckoning that is both a powerful opportunity to connect with a dramatically shifting consumer audience and a wake-up call to innovate or face irrelevance."
Other findings in the study looked at the importance of safety and supporting minority-owned businesses: 90% said it is now more important to them than before COVID-19 that businesses prioritize customer safety and employee safety; 88% maintain they communicate effectively; and 72% say it is more important to support minority-owned businesses through their purchases.