As governments begin to signal a gradual emergence from lockdown, NAMs need to plan for the action required on the Monday morning following release…
We leave it to other commentators to explore questions like ‘How bad will the effects to control the virus be on economies, companies and individuals?’, ‘How long will the disruption last?’, and what other unexpected after-effects might there be? Our focus has to be on the ‘here and now’ from the NAM perspective…
Unprecedented degrees of uncertainty have caused confusion and uncertainty. However, following four unprecedented weeks away from the fire-fighting, with the ‘luxury’ of time to think, we can be certain of the following:
- The emergence of the super-savvy consumer (see this recent NamNews article)
- There will be no return to the ‘Norm’ of 2019 (see Seth Godin Blog: Is everything going to be okay?). We need to define our own ‘Norm’ as ‘ok’ i.e. work with, and instead focus on the question: “What are you going to do about it?”
The full extent of ‘normal’ is obviously too much to explore in this editorial. Better to focus on how you might define your ‘norm’ and the action required in key trade sectors…
Patently there are already significant question marks over the very future as we know it, of the on-trade, most foodservice/hospitality, travel retail, fashion retail, in fact most sectors that fall outside the government’s definition of ‘essential’ retail. Those dependent on these ‘non-essential’ routes to consumer need to factor in reductions of between 25% and 50% and re-engineer their offerings appropriately, if possible.
This really leaves the financially healthier companies in Food and Health & Beauty retail… (Companies that have been struggling with weak financial fundamentals for the past ten years will not survive… Think how long it is taking for the government to implement their bailout of even profitable companies facing cashflow issues. Moving online may provide a temporary respite, at least until fully costed within a super-savvy consumer and Amazon context).
Given the inevitable bumps in supply chain availability following the imposition of lockdown, the UK’s sophisticated availability systems have recovered well, and most categories have benefited in terms of significantly increased turnover in supply and retail, with financial benefits for key stakeholders. The GCA, with your help, can be on top of any potential abuses of the resulting increased power by major players, so we have to assume that we are in a relatively level playing field, whilst insisting on our fair share of investment and reward.
However, key aspects of the pre-coronavirus environment remain: Discounters and Amazon. Both models were ‘made’ for the new Norm and are already demonstrating the results in terms of increased growth in market share. However, even they will have to cope with the inevitable transition from flatline demand to recession, but with discounters probably benefiting more than most from increased emphasis on value for money.
But it is the emergence of the super-savvy consumer that has to form a key piece of your new ‘norm’ jigsaw… Consumers were just about coming to terms with, rather than making sense of the past 11 years (!) of financial, economic and political turmoil. However, four weeks of lockdown thinking time has helped them to develop increasing confidence in their common sense when making purchasing decisions. And those who still have jobs are working longer and harder, and probably for less money, possibly distracted by these ongoing concerns with just living…
But for sure they are becoming super-savvy. This emerging super-savvy consumer has evolved from the combination of the mobile, social, cloud and big data developments in most markets. They have developed a healthy cynicism, a heightened sense of right & wrong, and an innate appetite for fair-share…along with social networking skills to help them spread news of their dis-satisfaction with any encounter with brands, be it supplier or retailer.
Defining your version of ‘norm’ means factoring in your new post-lockdown customer mix, your unique mix of relative competitive appeal within your definition of categories, but especially your appeal to super-savvy consumers in a radically changed recessionary landscape…
Your success will be determined by your ability to realistically and flexibly engineer an offering that meets the needs of consumers within your new norm, marginally better than the competition, the numbers add up, and the package delivers more than it says on the tin, on the morning after ‘unlockdown’.
All else is detail…
NAM Implications going forward with the benefit of hindsight:
- Key is our naivety in thinking the worst was over, when most of the damage was still in the pipeline…
- Lockdown gave us time to think, realising that exploring ‘Why’ means going down a rabbit hole.
- Better to focus on Lockdown fallout, the damage done, ‘the here & now’, and looking for ways of dealing with a business problem.
- It took longer for the ‘super-savvy’ consumer to affect demand…
- …and only then, under the extra pressure of the ‘sky-high’ inflation that eventually emerged from the pipeline.
- Going forward, your success in this still-changing norm will be determined by your ability to deliver more than it says on the tin, every time, the only reality…
