Racial protests, COVID-19 are impacting brand-switching
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.
Consumer personas
Looking closer at who these American shoppers are, Ketchum also took the data and framed four types of “crisis culture personas” and how they’re interacting with brands. They are:
- Retro Reengagers (33% of consumers): They are ready to return to the world as it was. Politically conservative, they are most likely to feel very comfortable visiting shared spaces, most likely to believe face masks shouldn't be required in public, and less likely to prioritize diversity and inclusion in choosing brands;
- Open-Minded Explorers (22% of consumers): Shoppers who have new priorities as they return to a world reopening. Politically polarized, they are most likely to change brand preferences post-pandemic, more likely to be urban and educated, and more likely to be influenced by advertisers, social media and bloggers;
- Worried Withholders (20% of consumers): They are not easily influenced: they prefer their comfort zone. Politically centrist/somewhat conservative and the oldest persona, they are more likely to feel somewhat uncomfortable visiting shared spaces, least likely to have changed their brand preferences during the pandemic, and likely to consider advertising less influential now than before COVID-19 hit; and
- Cautious Questioners (25% of consumers): Consumers who keep their distance until they know more. Politically liberal, they are twice as likely as the average American to feel very uncomfortable visiting shared spaces, most likely to have an underlying health risk, and most likely to feel positive about companies prioritizing diversity and inclusion in the wake of Black Lives Matter protests.
In addition to this U.S. view, Ketchum studied shoppers in the U.K. and Germany. Go here to download the full report.