Adapting Strategy in a Post Covid World
“It is not the strongest of the species that survive, nor the most intelligent, but the ones most responsive to change”.
Charles Darwin’s quote is relevant to the situation facing us today. Recent changes in society and our industry could be paralysing for decision makers. We can become cognitively overwhelmed by all the data, insight and industry reports, unsure of where to turn and what to do. But this can also be a time of opportunity for companies who keep a cool head and adapt their way of doing business.
So how can you go about updating your strategy and optimise your company’s prospects in this new environment? A key step is to identify which consumer and shopper trends represent revolution, which ones represent evolution, and which are about continuation.
First, revolution. Big changes that are unlikely to revert. For example, hygiene will continue to be much more important to consumers, who are traumatised by what has happened. Sanitisation is now an ingrained habit and the meaning of “clean” has changed. But it isn’t just hygiene. The time that consumers spend at home has rocketed and will stay high. So, consumers eat and drink differently (quick lunch at home has doubled, alcohol at home is buoyant). Our personal care routines have changed (less going out means less deodorant, less shampoo, less make-up). We shop differently because we’re at home for deliveries - Amazon sales are up 40% and online grocery has doubled. These dynamics will not reverse any time soon.
Second, evolution, Drivers of consumer behaviour that still exist but that have accelerated or changed. Value was always important. But it is particularly important given the economic outlook. During lockdown, we saw promotions down and price inflation up, but both have now changed direction. Keen prices, compelling promotions and loyalty scheme incentives will come back with a vengeance. Food adventure too has always been important but consumers have recently realised more of their aspirations, spending more time cooking. The dishes they have mastered will stick in their repertoires, at least when time allows. We will not become a nation of cooks overnight, but there is a subtle shift in that direction.
Thirdly, continuation. The fundamental principles of success in FMCG will not change. Consumers are inclined to buy products that are high quality, easy and quick to use, healthy and sustainable. We can’t take our eye off these fundamentals, by focusing only on what has changed. Some things stay the same but still matter.
So successful adaptation to change is not about wholesale abandonment of tried and tested growth strategies. It is about watching consumer and shopper trends, and identifying what is revolution, what is evolution and what is continuation of fundamental principles. Companies that focus clearly on that question can continue to flourish despite the challenging conditions.
Jeremy Garlick is a Partner of Insight Traction, consulting with FMCG and Retail companies. He was formerly Head of Insight at Sainsbury’s, Waitrose and Premier Foods.