The Great Covid Crunch

This report is part of Rival Spark, our collaboration with Attest and the marketing faculty at Imperial College to understand what makes successful challenger brands. You can see all our Spark reports here.

The Great Covid Crunch

A public that has been waiting for their ‘post pandemic’ lives to start is rapidly discovering that the pandemic isn’t going to end, but instead fade. The starting gun to signal the shift to ‘post’ pandemic has already fired, but many will feel like they weren’t told. Many consumers are still experiencing lingering anxiety about the pandemic while already creating their post pandemic daily routines – making choices daily on how to socialize, return to work, shop and travel.

The silent shift to emerge from Covid is poised to create a ‘Great Crunch’, as the daily routines of the last few years crash into aspirations for how post Covid life could be and how its already being constructed. Rapid shifts in behavior, as well as quick decisions on how, if and when returns to work, socializing and travel occur are poised to disrupt the landscape of many sectors, creating clear opportunities for brands looking to challenge the current status quo. Considering key tensions in this crunch, such as Freedom and Security, Caution and Experience or Home and the World can help make sense of a brand’s best strategies to position, adapt or recover from the impact of the pandemic.

The Never Ending Pandemic

Source: Rival Spark Survey – April 2022 – US / UK n:1000 – Powered by Attest

Despite waning prominence in cultural discussion & consumer’s lives, global searches around coronavirus have decreased by 75% relative to this time last year – concern around the pandemic is still present amongst a majority of the US & UK population. This lingering concern, even in the face of news coverage talking about an increasingly mild virus, highlights how the impact of the last few years won’t quickly fade away. Despite the world opening up, and a change in tone around Covid’s risk, the population still faces worrying uncertainty when it comes to the pandemic.

Source: Rival Spark Survey – April 2022 – US / UK n:1000 – Powered by Attest

Further, easing of restrictions alone, doesn’t look to reassure the public or help to accelerate the end of the pandemic in their minds. As the UK government does away with Covid restrictions and moves to a strategy of ‘learning to live with the virus’, the population has yet to fully share its view. Only a minority of the UK (36%) believe that the pandemic has already ended or won’t end – instead fading away to become a part of our life with time. The majority of the population see the end of the pandemic as still coming, with a post Covid life on its way any time over the next year or more.

The difference in UK opinion on how the pandemic ends is important, especially in a country that is actively moving beyond Covid in policy, because it highlights a variety of approaches in how consumers are planning their lives ‘post pandemic’. As the world attempts to reopen and move beyond Covid, despite much of the population still in the midst of concern about it, individuals are left to decide when and if they construct post pandemic routines.

Recovering From Covid’s Impact

Source: Rival Spark Survey – April 2022 – US / UK n:1000 – Powered by Attest

Covid’s impact is varied, but general themes have emerged in how it broadly affected our lives. Across the US / UK, our Spark research highlights that in any given area, a majority of the population were unaffected relative to their pre-pandemic lives. However, amongst those who reported an impact, personal financial situation, social groups & health were the three areas that show the largest disruption – creating a need for greater financial security, socialization & health in a time where the pandemic that created these challenges is still a concern.

Source: Rival Spark Survey – April 2022 – US / UK n:1000 – Powered by Attest

Looking ahead, Covid’s impact has shaped our plans for the next year – with saving more, improving health, better diets and increased family time as key areas of improvement. Plans to fix our fitness, finances and family life aren’t in response to the pandemic’s specific personal impact – instead it appears there is a widely held Covid guilt, driving everyone, better or worse off due to the pandemic, to think about planning for a healthier, financially better future.

Source: Rival Spark Survey – March 2022 – UK n:500 – Powered by Attest

The shift to this healthier, more responsible and well socialized post Covid individual continues when analyzed through the lens of pandemic behaviors. Greater budgeting, healthier eating and home improvement look to continue for those who engaged with them during Covid, while investment, delivery and pet ownership decline. Those who saw positive changes during the pandemic plan to keep them, while those who didn’t, plan to start.

The Great Crunch

The Great Crunch of the pandemic will play out individually, as each person’s risk profile, Covid impact and future plans come together – creating contradictions to be resolved and challenges to be addressed. Spurred on by a combination of government and work policy, the return of socializing in person and a displacement of Covid from the news in many countries – the population is being pushed towards crunching together our plans on how we want to recover and the reality of how we actually will.

This crunch doesn’t just impact consumers, but also the brands that have adapted with them throughout the pandemic. The healthier, financially responsible homebody is the post covid ideal consumers want to create, not the reality – giving an opportunity for brands to consider how they can help close the gap between post Covid aspirations and emerging Covid reality.

The adaptations made by each brand to survive or grow during Covid all require re-evaluation. Brands such as Peloton or Dettol, both key players in more isolated lives will need to consider what their role in a new landscape is. Travel, lifestyle and entertainment brands, who’ve been awaiting the return of a more external world are looking to make up for lost time, considering how to apply their existing business model to a world they hope looks like it used to.

Niall Mcgrath – Cali Cali – We’re not Talking about the Pandemic, We’re talking about its Impact

Considering how to navigate the Great Crunch is individual to each brand and sector, but we believe there are three key tensions, brands can leverage to help challenge and change post Covid market dynamics.

Tension: Freedom vs. Security

The need to live and work how we want is increasingly countered by the need for security in a world still feeling the disruptions for Covid socially and economically. The way we work and spend post pandemic is rapidly being defined, with implications for employers, financial institutions and beyond.

Implication: The Great: “Resignation”, “Renegotiation” or “Remain”

Source: Rival Spark Survey – March 2022 – UK n:500 – Powered by Attest

How we work has significantly changed due to Covid, but not as expected. Despite the narrative of the ‘Great Resignation’, data in the UK show that as many people renegotiated conditions at their current job as those who left due to the pandemic. Further, a significant part of the UK workforce remained unchanged due to the pandemic – especially amongst an older, more defined working demographic. The disruptions to the labor market globally cannot be underestimated even today, but it is worth noting that for every story of someone who left, changed or lost their job during Covid, a relatively larger number feel nothing has changed.

Linda – Omnipresent – How People Work and will Continue to Work due to Covid

Resigned, Renegotiating or Remaining workers all create different opportunities for employers and brands within the market – mirrored in different company working policies, products & even advertising. A need for greater freedom in work has created, at one extreme, a digital nomad and redefinition of work movement – reflected in challenger travel brands such as SafetyWing or Outsite, remote working policies persisting as a recruitment advantage and advertising focusing on freedom in professionally focused messaging.

Alternatively, renegotiated or remaining workers have seen brands focusing on work from home ‘prosumer’ products, getting the most out of hybrid work environments, return to work discussion & conversation about how to return to the office safely. For these workers, freedom can mean a new router with an increased radius as much as it means decamping to Portugal.

Implication: Buying into the Post Pandemic World

Source: Rival Spark Survey – April 2022 – US / UK n:1000 – Powered by Attest

The post pandemic budget, especially relevant to seeking financial security, persists as an opportunity for financial brands in the coming year. Consumer spending has been disrupted continuously by Covid, from wholesale changes in retail spending during the pandemic and employment insecurity, to fears of recession looming now. Making sense of how to budget as consumers create more permanent spending habits and how to follow that budget stand as clear value brands can provide.

Niall Mcgrath – Cali Cali – Consumer Confidence and Covid

As testing regimes and travel restrictions continue to loosen, the ability to travel and travel further than before, is becoming a prominent focus for consumers. The freedom travel brings to explore the world will be contrasted with the need to save more money, as nearly a quarter of those in the US / UK are aiming to do both. As consumers attempt to rebudget how to travel and save, new ways to travel, accommodations and additional value will become increasingly important in the sector.

Tension: Caution vs. Hedonism

The plan to ‘make up for lost time’ in how we socialize, travel and enjoy ourselves has been a consistent cultural conversation during Covid. However for every ‘hot girl summer’ post that was created in 2021, there were Covid waves to meet it. As Delta, Omicron and others fade from the public’s mind, the tension in how much we enjoy ourselves and how we keep safe looks to be a key force shaping how we create our lives in 2022 and beyond.

Implication: The Rise of Healthy Hedonism

Concern around how to keep healthy is prominent within the UK, despite a complete relaxation of restrictions and an end to free testing. 51% of Britons are currently against the end of the government’s free testing scheme but only 26% saying they would pay for their own test. While more than half of the UK (56%) say they still plan to isolate if they have Covid symptoms, a sense of confusion on how to determine if you have Covid, and what to do if you do will fuel long term lingering health doubt, even as Covid is seen to become more endemic (IPSOS, 2022).

Source: Rival Spark Survey – April 2022 – US / UK n:1000 – Powered by Attest

Lingering Covid concerns look to contrast a need to socialize while keeping healthy. Our Spark research data show that socializing, improving health and improving diet are three of the most popular goals respondents in the US / UK hold for the next year. As social circles shrunk during Covid and personal fitness was felt to suffer, making up for lost progress in both looks to be a contradiction that brands and new products are poised to help resolve. Non-alcoholic drink brands such as Seedlip and Lucky Saint, currently launching a partnership with exercise tracker Strava, are well positioned to help consumers balance social expansions and health.

Tension: Home vs. World

As the world expands and opens up, a focus on the home increased by Covid doesn’t look to go away. Home fitness and home improvement, as well as consistent interest in delivery services that exploded during the pandemic look to keep the home an important piece of consumer’s lives, even as they return to the world.

Source: Rival Spark Survey – March 2022 – UK n:500 – Powered by Attest

Implication: Fit at Home vs. Fit in the World

Shifting health and socializing attitudes look poised to not just change how we keep healthy, but where we keep fit. A continuing easing of restrictions in many countries has begun to permanently reshape the fitness industry, cutting the headwinds home-workout challengers such as Peloton enjoyed over the last 2 years.

As their most recent community campaign shows, with the world reopen, home workout needs to find a way to counter or complement more social fitness alternatives. Our data shows 66% of US / UK respondents are planning to workout at home as much in the future as they do now, but 54% say it is unlikely or very unlikely they would see themselves using current home workout brands in two years time. As with many Covid success brands, the data show there is category openness, but a lack of brand relevance – only solved by clarifying a new role in a shifting landscape.

Implication: Ordering in, in an Age of Going Out

As Netflix announces a decline in subscribers for the first time in 10 years, it’s easy to assume that the change driven by Covid for in-home brands will reverse.However, life outside and inside of the home will never be a zero sum game. While post Covid socializing looks to recapture consumer interest, home behaviors created during the pandemic look to adapt and stay – such as Covid’s acceleration of online grocery shopping & delivery, as a majority of UK residents say they consider it likely / very likely they will regularly use such services in the future.

The growth of the pipeline into the home, through both larger retailers maintaining delivery options and emerging rapid delivery service challengers doesn’t look to shrink, instead it becomes more important that home based brands understand when they can be most valuable. Whereas delivery was a lifeline to everything during Covid, it will shift to be a complement to doing more post Covid. Cutting shopping time, helping fuel spur of the moment plans (a rapid delivery of ingredients for a YouTube recipe) or socializing (promoting novel social experiences in home) look to give delivery clear roles from the transactional to creating new in-home experiences.

Crunching Down the Way Forward: Actions to Consider for Brands

1.) Recognize There’s No Going Back

Just as consumers can’t ‘return’ to how things were before the pandemic, neither can brands – with both on a journey towards somewhere new. A brand’s role will change with the post-Covid landscape, evolving with the new lives and routines consumers create. For brands that caught pandemic headwinds (e.g. video conferencing, delivery, home work outs, etc.) the next few years are a question of how to maintain growth when the opportunity becomes more competitive. Alternatively, for brands damaged by regulation and changing behavior (e.g. travel & leisure, restaurants and bars) the focus is on recovery and resurgence, emerging back into the market with the consumers they hope to capture.

2.) Find a Role in Easing the Crunch

Linda Wang – Omnipresent – The Role of Brand & Authenticity in Helping Consumers

As brands survey the shifting post Covid landscape, finding a new and clear role to play is increasingly challenging. However, the three tensions facing consumers in the Great Crunch: Freedom vs. Security, Hedonism vs. Caution and Home vs. the World are all difficult to reconcile on their own – instead, brands can find a role in helping consumers balance both and minimize Covid dissonance.

Does your brand help consumers find more freedom in the face of a return to daily routine or are you a reassuring force creating security in a still uncertain world? Do you help find enjoyment and hedonism or are you a source of health and safety while people enjoy themselves? Do you live more in consumers’ homes, bringing the outside world in or are you out in the world, ready to greet consumers as they emerge and go further?

3.) Consider Who You’re Helping & Who You’re Heroing

As product consumption behaviors shift during the Great Crunch, so will who and what consumers aspire to. Identifying what functional needs you meet, and how they’ve shifted during and after the pandemic can keep your product relevant. However, identifying how the aspirational consumer, those who embody your values or ideals, has changed will additionally help clarify who you want to hero to your audience.

While ‘digital nomads’ and ‘the great resignation’ may have captured a lion’s share of cultural conversation, for those seeking more security – an aspirational ideal may come more from career progression and traditional employment. For every discussion around the return of FOMO inducing parties, consumers with a greater health focus will hold more home based or safe aspirational ideals.

Recognizing that the pandemic has affected every brand and consumer differently is the first step in identifying who, how and where to operate in a post-Covid landscape – escaping the worst of the Great Crunch to emerge in a different, stronger position.

Further Reading:

Zheng, X., Ruan, C., & Zheng, L. (2021). Money or love? The impact of the COVID-19 pandemic on consumer life goals and subjective well-being. Journal of business research, 137, 626-633.

The researchers studied how the COVID-19 pandemic affected the life goals and well-being of consumers in China. Over a series of three surveys conducted during the course of the pandemic, they found that the threat of the pandemic increased the importance that consumers placed on both material and relational goals. Material goals include wealth and the acquisition of goods, whereas relational goals relate to connections with family, friends, and the community. COVID-19 caused consumers to feel uncertain about their personal finances and placed them in a scarcity mindset; this increased the importance they placed on material goals. At the same time, lockdowns and social distancing restrictions led consumers to realise the importance of their connections to others. The researchers found that the greater importance on material goals was a detriment to well-being, while more emphasis on relational goals improved well-being.

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