The shift from working, shopping and living to online during this corona period has resulted in adoption processes of digital resources gaining momentum. But what shifts does this development entail for budget, marketing activities and consumer behaviour, among other things? And what changes do we take with us to the period when this crisis is over?
From one day to the next, a large part of the Netherlands works from home, we spend more time in and around the house and consumer behaviour has demonstrably changed, according to a study by ING. The picture is twofold, because while some markets can barely keep up with growth, other sectors are struggling to keep their heads above water and are being pushed out all the way to survive.
What all sectors have in common is that Digital Adoption processes. For digital transformation, these are accelerated. Where providers previously had to think long and fore about decisions about digitization, the corona crisis makes it necessary to implement changes quickly. Providers with both on- and offline sales are looking at creative solutions. Hema uses a number of stores as distribution centers to deliver orders on time.
The smaller retailer, but also restaurants, clothing stores and other local entrepreneurs are quickly focusing on online in order to meet customer demand. Creative solutions are also being devised for this. For example, local Amsterdam pizzeria Nnea has quickly put a webshop online to offer their artisan pizzas frozen as an alternative to the supermarket frozen pizza. Through the Haarlem initiative Eattogether.nl one can eat out ‘together’ from home via video calling and collectives such as #supportyourlocalsNL emphasize how important the support for the local entrepreneur is during this difficult time.
Unfortunately, the rapid switch to online often leads to problems
Unfortunately, the rapid switch to online often leads to problems – especially at the inexperienced, traditional retailer. The increasing online consumer demand is hardly logistically difficult to keep up with. Meanwhile, with the current measures, offline stores are having an extremely difficult time continuing to generate sufficient turnover.
More commitment to performance
Many advertisers have reduced their marketing spending to virtually zero. But whether campaigns are delayed or not, media companies and publishers are seeing ad revenue drop dramatically. Research by Marketing Week shows that 57 percent of marketers cut back on offline media. As much as 32 percent of digital media cuts budgets. On the other hand, almost a quarter of marketers indicate that they spend more. Many organizations now go for short-term strategy and adjust their marketing activities in addition to budgets to achieve more immediately demonstrable results. That is why they use cheaper and flexible and measurable media and channels, so that one has more control to adjust. As a result, many advertisers bet much less on branding, but instead put more time, energy and money into performance. For example, many B2B brands increase their spending in digital media to compensate for the leads they normally bring in at trade shows, conferences and events.
The real grocery store is back
The real grocery store has come back from that. In this day and age, it is important to think about questions such as: which channels, media and budgets are most effective and efficient in this day and age? Where are opportunities in the customer journey to increase relevance? To answer these questions, monitoring, adjusting and optimizing (online) marketing campaigns is extremely important. Only in this way do you notice the opportunities to be optimally and relevant in the funnel as a brand.
Consumer behaviour completely shifted
Consumers shop more online in this day and age, according to research by Thuiswinkel.org. On the one hand, for safety reasons, on the other hand, the consumer now also has more time left now that commuting, social obligations and sports activities are largely not possible. In any case, normative consumer behaviour has completely changed. Purchases in segments such as food, education, sports, office and DIY through webshops have therefore grown considerably, ranging from a number of percent to even double digits. PostNL saw its turnover increase and delivered 11 percent more parcels in March compared to a year earlier.
In addition to the sharp increase in sales via webshops, the number of resellers on online platforms such as Amazon, Bol.com and Thuisbezorgd is also increasing. By contrast, tech giants Airbnb, Booking.com and Uber are struggling because of the restrictions the lockdown entails. Demand for products from the travel sector, such as accommodation, holidays and transport, has fallen sharply abroad. Holidays at home seem to be gaining ground quickly.
Because people are forced to make online purchases, they now discover all the conveniences of online shopping. Online shopping becomes much more obvious. This is expected to be reflected in the relationship between online and ‘physical’ spending even after the corona crisis.
Quick action necessary
While many sectors, such as the hospitality industry and the events and travel sectors, are currently in severe weather, consumer demand in other markets remains the same or is even rising. Here, too, a significant shift to online is visible. This means that organizations have to adapt in order to continue to serve customer demand in a relevant way. We need to act quickly to anticipate the rapidly changing market.
Many companies that normally spend months or even years setting up their processes for digitization sometimes achieve this within a few days or weeks. For example, contact with the customer at the big banks is increasingly via video calling.
ING expects customer service to further digitise in the near future
For example, ING expects customer service to further digitize in the near future. The same goes for Ikea, which has accelerated its e-commerce plans in recent weeks as it sees what kind of resort it has taken online. Ikea also wants to process 60 per cent of all online orders from its branches now that its brick-and-mortar stores are open again – a decision that would normally take years. In GP surgeries- where digital contact through e-consultation, image calling and digital results requests was initially unthinkable – this is now being embraced by patients. The corona crisis therefore ensures that, in order to survive, we can use all our creative capacities to satisfy the needs of customers and to continue to live up to expectations – regardless of whether certain working methods were unthinkable before the crisis. “Need breaks the law,” an old saying teaches.
The initial triggers are ultimately the changes in customer requirements
The initial triggers of all these developments are ultimately the changes in customer wishes. It is therefore essential that we continue to empathize with customers; that we delve into their questions and needs and the phases in which they sit. Especially in this day and age, these wishes are changing faster than ever before. In order to comply with this, certainties within bureaucratic internal processes and procedures – from procurement and marketing to logistics and customer service – need to be relaxed. If you do that well and add value to the customer in this day and age, customers will always come back to you – even if this crisis is behind us.
Flexible collaboration redefined
Now that working from home is the norm, everyone, without distractions from the office garden, turns out to be able to work much more efficiently. It also turns out that being physically present at the office 40 hours a week does not have to be necessary. Especially for productive tasks – provided this can be done undisturbed at home – this turns out to be a very efficient measure. Yet there are also challenges. By not seeing each other physically, spontaneous conversations at the coffee machine are missing. Taking a pulse height to see how colleagues are doing has become more difficult due to the distance. And how do we ensure that we continue to work effectively in addition to being efficient?
How do we ensure that we continue to work effectively in addition to being efficient?
Working independently of the place requires structure and overview. Because of the literal distance, it is more difficult to keep each other informed and inspire each other. Clear expectations, planning and agreements ensure that everyone can work together in their strength. This commands us to take a good look at our working methods. Methods such as agile working and other forms of efficient collaboration can remotely guarantee the progress of projects in quick decision processes.
Yet it is often precisely the unplanned, spontaneous conversations at the coffee machine that give us energy and create a bond. It is precisely because of this that we get to know each other better (unconsciously or not). The atmosphere, culture and personal relationship with colleagues often form outside of outlined tasks. That is why it is important to maintain this remotely. A challenge, because in a digitally structured world there is little room left for humans. What binds us, other than working on the same tasks? Therefore, also remotely, ensure (planned or not) coffee conversations with colleagues, but also with business relations. And then focus not on work but on the personal relationship between them. Connectedness is more important than ever right now.
Connectedness is more important than ever at the moment
Many Dutch people expect to take the above changes in their travel behaviour and work situation to the ‘new normal’ – even after the corona crisis. A quarter of people who have started working from home more often and a third of people who meet more often remotely expect to continue to do so in the future. Employers also see this as a permanent part of the work culture. This is evident from the research carried out by the Institutefor Mobility Policy(KiM).
Critically looking at physical meetings
If there is one thing that the current situation teaches us, it is that, as a rule, we are able to adapt quickly. For example, our creative abilities have made working from home, shopping online, online shopping and video calling a new reality. If the measures are relaxed, we can – with adjustments – resume our lives with much more knowledge about the digital possibilities at our disposal. What is permanent is that we always look critically at physical meetings, including consumer behaviour in stores. Online presence has therefore also become essential for local entrepreneurs. But other forms of business meetings such as conferences and physical meetings will also take place less in the future. This has accelerated digitisation not only for consumer behaviour, but for all manners in our society.