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How Consumers and Brands Behaviors Change During a Pandemic

Posted by Gerson Menchu on May 26, 2020 at 8:57 AM

Purchasing Behavior Changes During A Pandemic

Normally, we as consumers change our purchasing behavior gradually.  However, these days are not normal times and the pandemic has forced us to immediately drive change to the way we prefer to purchase items. It is in these moments that we truly can show our appreciation for technology, since consumers are opting for options for online purchasing and home delivery more than ever before.

In addition companies and brands are noticing this dramatic change and creating strategies to not be left behind, with some seeing higher sales than ever before, and others edging closer to bankruptcy. In this blog, Hollywood Branded discusses consumer and brand behavior changes during the Covid-19 pandemic, and how some businesses are standing out.


How Consumers and Brands Behaviors Change During a Pandemic

A Time Of Change

As a response for the COVID-19 spread into the United States, the majority of most states and local governments shut down all non-essential businesses, leaving a major gap in consumers’ lifestyle. The impact has been seen in younger generations such as Gen Z and Millenials who have immediately altered their purchasing behavior by minimizing their expenses, stocking up in essential supplies and cutting spending in entertainment.

Even the older generations, including Gen X and Boomers, have dialed back their expenditures, and limited the amount of time they interfaced with others.   In a survey by the Association of American Advertising Agencies, the results showed the following: 

  • 49% said they are not going out to eat
  • 27% are ordering food delivery and/or takeout
  • 44% are not comfortable going outside for non-essential items
  • 37% are buying items online, but not going in-store.

Only 15% of respondents said that the Coronavirus is not impacting their daily routines.

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"Survival Of The Fittest" 

Younger generations will definitely have different feelings towards brands after this pandemic. Gen Zs and Millennials tend to pay importance to social obligation from brands, including the advertising industry. In fact, the same survey by Association of American Advertising Agencies shows that out of 1,000  consumers who took the survey 56% of respondents want brand advertisers to help the community during Covid-19.

Those companies who have the ability to help, and do so, are far more likely to be in a winning position, as not helping at all will leave permanent negative brand recall to their consumers, impacting sales far into the future.

stand out Marketing with Covid-19


E-Commerce Brands Are Finding Success

Taking all those percentages above into consideration, it is not hard to imagine why companies who have little to no online activities are looking for ways to quickly jump into the e-commerce boat.  

NBCUniversal

NBCUniversal is showing sympathy to small businesses who have no online distribution. In April the communication company launched NBCUniversal Checkout, which is an e-commerce platform which facilitates turning brick-and-mortar businesses into a business that is able to sell through the e-commerce industry. Customers only need to click into an advertisement of their preference and they will be immediately be directed to a checkout in which they can purchase the item instead of being redirected to other sites. 

NBCUniversal Checkout Commerce Platform helps small businesses

Amazon

One big winner is the leader of the e-commerce industry, Amazon, and a brand who has won in a major way during Covid-19 lockdowns.  In fact, the company experienced in a single quarter a 26% increase in sales compared to last year.

If somehow, years or even months ago you had never heard about Amazon online store, by now you would probably be more familiar with it - and likely using it. Although the company did not struggle in sales it did get hit from the point of the company's cost expenses driven by social distancing in the workplace needs and hazard pay to employees, among other expenses.

Amazon sells more during Covid-19

 

Nintendo Switch

The gaming industry is also gaining new customers as consumers are looking for new entertainment methods, bored with the walls of their home. In fact the new console Nintendo Switch sold out almost immediately and is now being sold in online marketplaces by third parties for extravagant prices. 

Nintendo sales high during Covid-19


Two Brands That May Not Make It

With the stay at home orders and lockdowns due to Covid-19 came lack of sales for brands who did not have massive footprints online or a way to still make money.  Two industries have been harder hit than others:  Fitness gyms and movie theaters.

24 Hours Fitness

A big loser is the fitness industry specifically is 24 Hour Fitness, who since April 20th has been considering filing for bankruptcy.  Gyms and fitness centers like this company have suffered massive losses due to customers staying-home policy enforced by local governments. 

24 hour fitness may go bankrupt due to Covid-19a ...

 

AMC And Regal Theaters

Theaters are not having any luck either, in fact two of the biggest cinema chains (AMC and Regal) have banned Universal movies from their theaters. This is due to Universal, in a desperate move with theaters closing during COVID-19, decided to release their film Trolls: World Tour on video on-demand (VOD) versus a first run in movie theaters.  

The on-demand rental sold almost $100 million in the first three weeks, and while this is a lower amount made than the $153.7 million they made in the same window from the first "Trolls", it is actually the same profit amount they kept after theatrical distribution fees were paid.  

This move by Universal turned out to be lucrative, and Universal stated they would continue releasing first-run movies on VOD after theaters reopen - thus the ban.  Time will tell what will happen, but there are a few good buyers waiting in the wings for AMC to admit defeat and go bankrupt.

AMC Theatres may go bankrupt due to Covid-19


The Aftermath

There are brands doing it right. And brands that are destined to fail through no fault of their own.  The takeaway here?  These are hard times and we are all in this together.  The only way to overcome this situation will be by helping each other. And by brands leading the way.

The brands who have more technology and who have been able to flow with the swift river of Covid-19 have more likelyhood of withstanding these times, as are those who have figured out how to better connect with their customer base.

Check out some of the recent blogs our team has written on COVID-19 and marketing.

Interested in staying up to date on what is going on in the world of marketing and business? Then sign up for our weekly podcast Marketing Mistakes (& How To Avoid Them).

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