Stock markets may have reacted with glee to the news that COVID-19 vaccines are on the way, but most business leaders are a great deal less sanguine, according to new research from Kantar.
More than two-thirds (69%), expect their businesses to end Q2 2021 in decline, and just under half (45%) of those say they expect business to be down 20% or less, with one in five of these leaders saying they expect business to be down by more than 40% year-on-year.
Only 23% of the 4,500 business leaders from around the world who were surveyed by Kantar said they expected their business to recover within six months of a vaccine being widely available; a more optimistic 41% expect recovery within a year. But a further 27% expect recovery from the effects of the pandemic to take as long as two years.
Kantar found that almost two-thirds of companies had slashed marketing budgets by an average of almost 37% this year; this included half of companies cutting comms and media spend by an average of almost 40%.
With such a challenging economic environment, Kantar suggests three core approaches for marketing teams looking towards rebound and recovery strategies.
One, Digital Transformation – 40% of consumer say they did more shopping online during lockdowns, with this figure rising to 48% in households with children. Most tellingly, some 45% of consumers say they will continue shopping at online stores they discovered during the pandemic. The change is not limited to simply more shopping migrating online, it is also about new buying habits and behaviour, says Kantar. Digital is part of the new normal and the most successful brands will be those that “elevate the human experience”.
A purposeful data strategy will be crucial, especially one that “discovers the power of owned data within the organisation and integrates it with trusted third-party data to understand the new buying signals and deliver that data to the decision makers within the marketing and media teams”.
Two, Purpose and Sustainability – these will really make a difference, says Kantar. People have re-evaluated the importance of these two considerations in their priorities, and 85% of consumers say it’s important to buy from brands that support causes in which those consumers also believe.
“Businesses are under pressure to play a more supporting role in giving meaning to people’s lives and position themselves on issues such as diversity, local culture vs. globalism, racial justice, sustainability and community,” says Kantar.
Three, Organisation, Performance and Innovation – Nearly two out of three business leaders say they don’t believe they have the right operating model to be competitive. During the pandemic, 20% of companies experienced growth, and these companies can offer valuable lessons, says Kantar. Well over half of these growth companies changed their business model, Kantar points out, and more than a quarter invested more in innovation. Recovery will mean drastic changes to old ways of working and significant reviews of and investment in organisational performance.
Rosie Hawkins, Chief Innovation Officer at Kantar, commented “Adapting to new conditions and being brave are key to fast recovery. Virtually every business we interviewed for this study agreed that consumer behaviour has changed for good. Whether it is how they shop, their product needs or their customer service needs, we need to reset what we know about customer behaviour in the future.”
Sourced from Kantar