Tuesday, Jun 18, 2024

Mad Ave. Insights



In the early stages of Covid, the conversation revolved around the “new normal.” Will there be any lasting effect from the lockdown and other regulations, or will consumers revert to their pre-Covid lifestyle and habits?

Sufficient time has passed to allow for evaluation as to whether or not there is a new normal, and if so, if it is here to stay. The ramifications, of course, cover a broad number of work, lifestyle and economic categories.

Early on, I expressed an opinion that once the lockdown was over, the majority of workers would prefer to go back to their offices. Social interaction is a human necessity. However, it appears that a substantial number of employees are not leaping at the opportunity to go back to the office. There are many reasons: Biden’s fiscal handouts. Covid, to some degree, is still a threat that many take seriously. But there’s also a shift in the attitude towards working for someone versus being independent. Workers are seeking more than a check. They are seeking a purpose in their lives.

All this has ramifications as to the future of the workforce, economic growth, purchasing decisions – which can be summed up as follows: Workers are seeking a value proposition in exchange not just for their skills, their time, their independence, but their lives. How the choice of whether to be employed or not plays out remains to be seen.

But there is a significant amount of data that has been filtered, digested, and analyzed, with conclusions being reached by major research companies. Given the importance such conclusions may have, I am sharing thoughts from major thought leaders on post-Covid issues that affect business, very possibly yours.


The pandemic upended lives and livelihoods across the globe, forcing consumers and businesses to adopt new digital behaviors. Homebound consumers abandoned ingrained shopping habits, hurtling ecommerce into hyperdrive and compressing a decade’s worth of digital adoption into 100 days. Businesses responded to the digital-first marketplace by quickly pivoting and innovating to find new ways to connect with new customers.

What does this mean for business leaders? Technology has conditioned consumers to believe that they can get whatever they want, whenever they want, within minutes. Meeting these lofty expectations requires real-time analytical horsepower to process massive amounts of granular consumer data. Only then will you gain the 360-degree view of customers needed to serve their unmet needs and deliver the wow factor with an astonishingly personalized experience.

Four major consumer shifts are reshaping the consumer landscape and how CFOs should respond.

Consumer spending revving up

Americans are beginning to spend again, with some 51 percent of consumers reporting a desire to splurge and indulge themselves in a fit of post-pandemic revenge spending. Higher-income millennials look set to outspend all other groups on apparel, footwear, travel, and experiences such as dining, concerts, and spectator sports. This comes on top of a summer of 2020 acceleration in discretionary spending, particularly on home furnishings.

E-commerce accelerates to a next horizon

Credit and debit card data revealed a nearly 20 percent increase in online spending since January 2020, and this pandemic-induced surge in ecommerce was no hiccup. The digital future is here to stay. Some 92 percent of consumers who tried online shopping in 2019 became converts, cementing an emergency response into an indispensable habit. Ecommerce also redefined convenience, with even traditionally tactile shopping experiences such as grocery shopping enjoying a notable surge.

Rebalancing of the homebody economy

Consumers forced to work and spend most of their free time at home for a year boosted the homebody economy and took it mainstream. Some 28 percent of consumers invested in amenities such as home theaters, gyms, or studios to make the lockdowns bearable, and 30 percent more plan to continue spending on their homes post-pandemic. But even the happiest homebodies are once again eager to spend time and money outside the home on dining, entertainment, and travel.


The shattering of brand loyalty

The pandemic ushered in an unprecedented level of channel switching and brand loyalty disruption. A whopping 75 percent of consumers tried new shopping behaviors, with many of them citing convenience and value. Fully 39 percent of them, mainly Gen Z and millennials, deserted trusted brands for new ones. That restlessness is reflected in the fact that many younger consumers say that they are still searching for brands that reflect their values.

Covid’s impact on consumers around the world has dramatically changed both their behavior and their demand. Many of these changes—for instance, the unprecedented growth of online shopping over the past year and shifts in brand loyalty—have critical implications for the many industries. Meanwhile, supply-side adjustments have limited new-product introductions. As the industry starts to emerge from the pandemic, the big questions now are which behavioral changes will stick and how businesses should accommodate the new customer requirements.

  • The pandemic made global brands pause new-product launches. Meanwhile, the industry concerns moved toward assuring the availability of products for consumers. Companies shifted their priorities for the products they did launch to ensure that those products stood out on shelves and were more relevant to changing consumer preferences.
  • An uneven recovery.Despite growth in overall consumer spending, different sectors are performing on different levels. A spectrum of winners and losers has clearly emerged, ranging from sectors of continued decline (for instance, theaters and amusement parks) to sectors experiencing sustained elevated growth (such as products for the home). As the market readjusts to a more normal state, and leisure travel, in-person dining, and entertainment return, some of this disruption will fade. Demand for away-from-home products will start to rise. But will it ever return to pre-pandemic levels?
  • The homebody economy persists.As the pandemic led many consumers to work remotely, homes became the new coffee shop, restaurant, and entertainment venue. The direct consequence has, of course, been a strong shift to at-home consumption. After the pandemic, this trend of home nesting is likely to stick and to go on bolstering at-home demand. However, the policies of employers will influence its degree of persistence.


Will old habits die or return?

It is expected that most habits will return to normal. However, it is inevitable that some habits will die because the consumer under the lockdown condition has discovered an alternative that is more convenient, affordable, and accessible. Examples include streaming services which are likely to switch consumers from going to theatres. This is similar to ride sharing services such as Uber which is more user friendly than calling a taxi service. Due to coronavirus, consumers may find it easier to work at home, learn at home and shop at home. In short, what was a peripheral alternative to the existing habit now becomes the core and the existing habit becomes the peripheral.

There is a universal law of consumer behavior. When an existing habit or a necessity is given up, it always comes back as a recreation or a hobby. Examples include hunting, fishing, gardening, baking bread, and cooking. It will be interesting to see which existing habits that are given up by adopting the new ways will come back as hobbies. In other words, will shopping become more an outdoor activity or hobby or recreation?

Modified Habits

In most cases, existing habits of grocery shopping and delivery will be modified by the new guidelines and regulations, such as wearing masks and keeping the social distance. This is evident in Asia, where consumers wear masks before they go shopping or use the public transit systems. Modified habits are more likely in the services industries, especially in personal services such as beauty parlors, physical therapies, and fitness places. It will also become a reality for attending museums, parks and recreation centers, and concerts and social events, just to name a few.

New Habits

There are three factors that are likely to generate new habits. The first is public policy. Just as we are used to security checks at the airports after 9/11, there will be more screening and boarding procedures, including taking one’s temperature, testing for the presence of the virus, and boarding the flight. All major airlines are now putting innew procedures for embarking and disembarking passengers as well as meal services. As mentioned before, government policy to discourage or encourage consumption is very important to shape future consumptions.



People are social animals, and they will resume going out, getting together, and traveling as soon as they can. This is already evident in places where restrictions have been eased or lifted. This is likely to result in a burst of activity in the short-term – finances permitting. At the same time, some of the virtual experiences created during the crisis will become part of the permanent work, school, and leisure landscape.

Consumer shopping behavior and Covid-19

Perhaps one of the biggest and potentially longest-lasting changes that has resulted from the pandemic is an accelerated shift to online shopping, as well as alternative forms of delivery. Store closures initially forced the issue, but newly developed habits will keep the momentum going. Brick-and-mortar stores and restaurants innovated during lockdowns by offering take-out, drive-through, and delivery services. Delivery services and the like will remain popular, especially if they are free; indeed, 39% of Americans expect this from online retailers and 25% from offline retailers. In addition, 25% expect stores to offer curbside (a.k.a. click-and-collect) service, and 36% expect to keep using grocery/takeout food delivery services such as Instacart and Uber Eats.

At the same time, a growing share of Americans say they shop equally in stores and online for most of their needs, up sharply from a year ago. In other words, omnichannel shopping is here to stay.


The unevenness of the recovery is widespread

The recovery is also uneven within advanced economies. Employment is still relatively weak in the United States, but is already higher than its pre-pandemic level in the Euro Area. At the same time, United States GDP has recovered faster than Europe’s. Different protection models mean different challenges looking ahead.

The labor market is imbalanced. Many people are struggling to find jobs, yet businesses in a number of sectors have difficulty recruiting workers. The skills demanded in the wake of the crisis are not necessarily the same as before.

A shortage of workers in some sectors also reflects a decline in labor force participation rates in most OECD countries. Participation is expected to normalize as the effects of the pandemic wane, increasing labor supply, helping to keep wage growth moderate.

Imbalances also remain across industries, with sectors dependent on interpersonal contact such as travel, tourism and leisure continuing to suffer, while demand for consumer goods has been strong, especially in the United States.


Strong goods demand faces supply bottlenecks


The rebound is losing some momentum as the surge in demand for goods has met bottlenecks in production chains. Inflation pressures have emerged in all economies, as:

  • disruptions in energy, food and commodity markets have pushed up prices
  • high energy prices and fuel shortages are limiting manufacturing of key materials and intermediate goods
  • bottlenecks in production chains are spreading to more generalized shortages of goods.

The renewed inflationary pressures risks lasting longer than was expected a few months ago. Rising food and energy prices are hitting low-income households in particular.


75% of U.S. adults say the pandemic will drive long-term changes in their behavior.

Just 16% of Americans believe they will revert to a pre-pandemic sense of normalcy after the pandemic is over.

Life after Covid

It remains to be seen how all the changes in consumer behavior that Covid has wrought play out in the long term. The pandemic has not fundamentally changed what people do – work, play, shop, etc. What it has done is change how we do things. Crises highlight human flaws, but also ingenuity. The next step is to build on the innovations generated and lessons learned.

In a CNBC Business Round Table with CEOs, Shane Grant, CEO of Danone North America, summed it up for all CEOs: “As we move ahead in 2022, I think it’s this theme of just volatility, and it’s not one particular type of volatility. It’s enormous volatility in our supply chain. It’s everything from input availability, capacity, transportation, labor, it’s Covid adaptations by ways of working adaptation. It’s this accordion economy of sort of stop-and-go and the adaptations required,” Grant said.

“The theme going forward is just volatility in everything.”

Welcome to the “new normal.”



Interested in developing your creative thinking skills to grow your business? Maybe even disrupt your business category? Subscribe to my “Unleash Your Creative Thinking” free email course. Email bullseyemarketing1@gmail.com, with “Creative Thinking” as the subject.



Chanina Katz has over two decades experience in major Madison Ave. ad agencies developing highly successful strategies and award-winning campaigns for such blue-chip clients as Colgate, RJ Reynolds, Hilton, Home Depot, General Mills, KFC and many others in a wide variety of package goods and services businesses. He provides marketing services for a range of businesses, from start-ups to major corporations. He lectures on marketing and creativity. He can be reached at Bullseyemarketing1@gmail.com.



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