Insecurity, Transition and Recovery

January 3, 2021

In the last blog, we discussed Millennials & Gen Z. We also had some preliminary data on how consumers reacted over the first few months of Covid. While each state handled things differently, it was a trying time for everyone. As we head into 2021, let’s take a tactical pause (to quote our military strategists). What have we learned and how can we adjust going forward?

Let’s look at Covid from three perspectives: Insecurity, Transition and Recovery.

Insecurity

All of us experienced some level of personal and professional insecurity in the spring. This included health concerns, financial concerns, rising food prices, out of stocks on staple items like toilet paper & paper towels, less promotions at the grocery store and a focus on non-perishable items along with a huge growth in e-commerce. Many businesses closed due to government orders and some have never come back. Many of those businesses that have been lucky enough to survive have had to change something (or many things) in their business model.

Transition

We will enter the transition phase when cases are leveling out/decreasing, the economy bottoms out, food prices begin to fall and we see more promotions and a more stable supply chain, and consumers begin to work through all of the items that were stockpiled over the past 6 months. One of the biggest trends we saw was that consumers trips were down but their basket sizes were up. Many people thought we were in transition in September, but more recently, we have seen a spike in cases across the country which means that we are heading back to the insecurity phase. Some other facts as of November: Pre-Covid the average U.S. household prepared dinner at home 3.8 times per week versus 6 times per week post-Covid. And the average household spent $86 dollars per week on food at home pre-covid versus $155/week post-Covid.

Many experts feel we will be here at least through the 1st quarter and possibly 2nd quarter of 2021 even if we get a vaccine or treatment. So, expect these trends to continue for a while.

Recovery

When we are finally in the recovery phase, we will see some behaviors go back to the days of 2019. More frequent shopping trips, smaller baskets, increase in on-premise dining & socializing in larger public gatherings, fans in the stands at sporting events, students in the classrooms and no social distancing.

We will have few if any new cases/deaths and our optimism about the future will return. The economy will rebound and we will be in growth mode once again. As we approach 2021 and “The New Normal” having current information on your best customers & potential new customers is more important than ever.

Whether you are on-premise or off-premise business, you need to make sure that you understand this group of consumers and build your products, merchandising and marketing programs around how they live and act in the new normal.

 

It will positively impact your bottom line. And remember, Marketing is a race with no finish line.

 

George Latella teaches Food Marketing at Saint Joseph’s University in Philadelphia. Food Marketing which is the largest major at Saint Joseph’s University recently celebrated its 58th anniversary. George is also a partner in Beacon Marketing group which provides Marketing planning, research, and e-commerce/direct marketing communications for food and beverage companies. George can be reached at glatella@sju.edu or 610-660-2254.

 

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