This week’s podcast from full service marketing agency Bigeye focuses on COVID-19’s impact on consumer research, travel, and dining over the past three months.
IN CLEAR FOCUS this week: Full service marketing agency Bigeye’s podcast takes a look at the impact of the coronavirus pandemic on consumer research, travel, and dining. Research executive Mike Klotz of Cint, Professor of Marketing Dr. Yael Zemack-Rugar of UCF, travel management expert Ben Scott, and culinary PR professional Holly Kapherr reflect on how consumer behaviors have dramatically changed during the crisis – and predict which newly-formed habits might “stick” in a post-COVID world.
Adrian Tennant: You’re listening to IN CLEAR FOCUS, fresh perspectives on the business of advertising, produced weekly by Bigeye. Hello, I’m your host, Adrian Tennant, VP of Insights at Bigeye. An audience-focused creative-driven, full-service advertising agency, we’re based in Orlando, Florida, but serve clients across the United States and beyond. Thank you for joining us. With the aim of providing insights that can help inform advertising and marketing strategy, IN CLEAR FOCUS has been tracking consumers’ constantly shifting sentiments and behaviors during the past three months of the pandemic. So today, we’re going to reflect on some of the things we’ve learned during this season of IN CLEAR FOCUS. In mid-April, I spoke to Mike Klotz of Cint, who joined us to comment on how COVID-19 has been impacting marketing research. I asked Mike what consumer research could most helpfully study during the crisis.
Mike Klotz: So in early March we started looking at what the potential impact of the pandemic could be on research and with three basic hypotheses. The first is that people’s purchasing or consumption behaviors could change. The second was that people’s demographics could change. And the third was that people’s participation levels in research could change. And there’s an underlying unknown that makes each of these really difficult. We don’t know how long this crisis will last and we don’t know what the magnitude of the effect will be.
Adrian Tennant: Okay, well let’s take each of those in turn. First, you mentioned changes to consumer purchasing and consumption. What are Cint’s recommendations here?
Mike Klotz: Our key premise on this is to continue to track behaviors over time and look for changes. First of all, track for incidence at a category level. This is something most brands are already doing, but if you haven’t been doing that you can look at data that’s available from reliable providers who observe trends in the category. For example, I worked for NPD in the past, specifically focused on the video game industry. We published sales trends and player behavior information and we could measure how large events impacted that purchasing and playing behavior. Actually, probably a really interesting area to be looking at right now, because with more people spending more time at home, they’ll likely be playing more games. Secondarily, you can track brand usage and look for changes which could impact the research you’re doing. For example, if you normally track brand affinity for 10 brands in your industry, you may want to ask some unaided awareness questions to ensure you’re tracking the most important brands. With the world in flux, loyalties can shift really quick, especially in, you know, some of the responses that we’re seeing from companies. That’s going to have a big impact on some of these feelings that people have towards the brands that they’re affiliated with. And that leads to another point. If you’re conducting tracking studies, you may want to take some time to reevaluate your tracker design from both a survey perspective and a sample perspective.
Adrian Tennant: How does the fact that people’s demographics might change due to loss of income or work impact research?
Mike Klotz: Right, so there’s a large percentage of the population whose demographics will change due to this crisis. At this point, it’s unavoidable. The most obvious one, as you mentioned, is change of income and net worth. As we’re seeing the unemployment rates spike and in an unprecedented manner. Residences and household structures will likely be changing as well. The challenge here is that for a lot of research, the sample needs to be representative of the known population. As things are moving quickly now, people may not be conscious of how the demographics are changing or even if they are, they may not be able to provide an accurate assessment of the impact that they’ll feel.
Adrian Tennant: It seems logical that people’s typical participation levels in research studies might change during the crisis. What does that mean for researchers and for the reliability of the data collected?
Mike Klotz: So the participation level of respondents is a question that’s popped up through many recent crises. So looking at like 9/11, and Katrina, and the recession of the late 2000s, there was a thought that people will turn away from things like survey participation and really focus on their lives and, you know, what’s important to them. And while it may be true that people are focusing more on their lives, we’ve seen that people continue to take surveys during these periods. We don’t have a real rational explanation for that, but we’ve seen it happen throughout history and similar to how we’ve seen crises impact demographics, it’s just looking at the data and seeing that this is what we’ve seen before. So a key piece of information to keep in mind during these times is to be sensitive to people’s situations and be careful on how you ask them questions. I’ve heard some people say, “you don’t want to ask a respondent a question that you wouldn’t ask mother or your friend’s mother.” So you really need to be respectful of people’s situations right now.
Adrian Tennant: Continuing with the theme of research, Dr. Yael Zemack-Rugar, Professor of Marketing at the University of Central Florida, joined us at the beginning of May to discuss consumer psychology during COVID-19. At the time, toilet paper was still very much in the news… Recent research from Kantar, conducted in Canada, examined consumers’ reactions to finding many major CPG products being out of stock at the supermarket. In the study, over a third of shoppers reported being forced to try a different brand of toilet paper than usual, and over half said they will consider purchasing the new one even when the pandemic is over. Diapers are often considered to be a fiercely loyal category, but almost four in ten shoppers had to try another brand and over half claimed they’ll consider switching permanently to the new brand. Pasta saw a similar percentage of forced trialists, but three-quarters said they may consider the new brand they bought. So for brand marketers, this situation represents either an opportunity to reinforce positive behaviors or disrupt unfavorable ones. What are some of the psychological principles that we should be considering in the upcoming months?
Yael Zemack-Rugar: This is a really interesting phenomenon in terms of asking ourselves what’s going to stick and what’s not going to stick. So we have to look at the underlying motivation and let’s take a step back. A lot of this switching is happening due to market unavailability. So the first question we want to ask ourself is, “Why is this stuff unavailable?” And it turns out, and I’m sure you’ve read as well, there’s not actually a shortage. There’s enough eggs for everyone. There’s enough meat for everyone. And there’s enough pasta for everyone. But people are hoarding, people are stocking up. And we’ve actually run our own data that we’ve been collecting. We’ve recently applied for an NSF grant as well, where we’re looking at these consumption patterns and how they’re related to control. And what we’re seeing is that people are hoarding as part of the way to exert control. So when you have this uncertain situation, if you feel psychologically uncertain and you don’t feel like the actual health actions are satisfying your needs to feel in control, then you engage in these consumption actions, which further make you feel certainty. Right? So if I have a lot of toilet paper, I feel in some kind of way protected. I feel like I’ve done something. I feel like I’ve taken control of the situation. So it’s control that gets us to this place where we’re all switching brands and buying whatever we can find because there’s these fake shortages because of the hoarding and now it’s control that will determine how we come out of this situation. Because if I switched only because I had to, the first thing I’m going to do is switch back the moment that I can. Because that will be me asserting my freedom of choice. Now if I switched because I had to and I suddenly discover this is much better than what I had before, then there might be some factors that I can compromise on and that will override my need for control. So I will somehow psychologically rationalize that now this is my new choice. But it has to feel like a choice. I mean it has to be a choice for as long as we’re choosing these brands because we have no other options then marketers should be careful before they celebrate their rise in market share.
Adrian Tennant: At the time we recorded this interview, it was starting to become apparent that in the hardest-hit areas of the country, social distancing measures might need to remain in place indefinitely, including the wearing of face masks in public. I asked Yael what she thought the impact would be on consumers.
Yael Zemack-Rugar: So I think this is really interesting. I was reading the other day that JetBlue is the first airline to require passengers to wear masks. And this, after reading some article about a flight to New York where a woman was recounting how 60-70% of the passengers did not wear masks and how she was basically terrified. And I thought to myself, “Some people might think that JetBlue is creating some kind of disadvantage for itself because other airlines don’t require masks and they do require masks and they’re creating some kind of hurdle for consumption.” But I actually think they might be creating a competitive advantage for themselves because if I need to fly somewhere now I’m going to fly JetBlue because I know everyone will be wearing a mask. And so, for certain target segments such as myself, that tends to be more cautious maybe, right? This is a great targeting strategy and it creates a competitive advantage. So we should always remember that there’s different customers, first of all. So some customers may think that wearing a mask in a restaurant is a terrible idea and completely detracts from their enjoyment. But other customers may say, “I’m only going to go to restaurants that require this because this is the only place that I feel safe.” So, first we want to think about segmentation and how people respond to this because different customers will respond differently. And then we want to think about regulation. At the point where market equality is created, for example, there’s an executive order that all restaurant servers must wear masks then now there’s competitive equality. There’s no advantage or disadvantage. This is just the new status quo. Then we’re asking will consumers adjust to the new status quo? Have consumers adjusted to wearing seatbelts? Have they adjusted to using child seats? Have they adjusted to TSA checkpoints when flying? All things that didn’t exist at one point in time that were considered huge inconveniences. But that really didn’t change the industry whatsoever in terms of demand, because what’s easier – to deal with a server with a mask or to never go out to eat again? We have to ask ourselves, “which is more likely?” And it feels like it’s more likely that consumers will just accept this as a new status quo and try to go back to as close as prior consumption as possible. That would be my guess.
Adrian Tennant: Let’s take a short break. We’ll be right back, after this message.
Dana Cassell: I’m Dana Cassell, Bigeye’s Senior Strategist. Every week, IN CLEAR FOCUS addresses topics that impact our work as marketing professionals, often inspired by data points reported in consumer research studies. At Bigeye, we put audiences first. For every engagement, through our own research, we develop a deep understanding of our client’s prospects and customers – analyzing their attitudes, behaviors, and motivations.
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Adrian Tennant: Welcome back. We’re taking a look at how COVID-19 has affected consumers’ sentiments and behaviors over the last three months. In May, travel management expert Ben Scott joined us on IN CLEAR FOCUS to talk about potential changes to business and leisure travel in the wake of the pandemic. I asked Ben if he thought the “new normal” for many – of working from home and connecting with coworkers via Zoom – would result in a temporary reduction in business-related travel – or prompt many businesses to reevaluate and modify their operations in the longer-term.
Ben Scott: Wow. The million-dollar question, right? In the long run, I’m definitely bullish about the industry for the simple reason that in-person human interaction matters. We are social animals after all and it’s really hard to build a relationship strictly around a Zoom meeting. But having said that, obviously in the short term that’s all anybody’s doing and in the medium term companies will be asking employees who say, “Hey, I need to go travel to X city,” you know, “Hey, Zoom seemed to work well during the shelter in place efforts. Why can’t it still work?” I think they’ll figure out pretty quickly that it’s not a good long term solution because relationships matter. I do think we’ll see a bump of pent-up demand hit us once things hit the all clear button. But that’s really the rub, when are we going to get a clear “all clear?” Just as there was a post-9/11, pre-9/11 dichotomy in how people view the world, that will definitely be there. But again, I would never bet against human-to-human, face-to-face, in-person interactions.
Adrian Tennant: JetBlue announced that it now requires passengers to wear face masks. In what other ways, if any, do you foresee airlines changing key aspects of the traveler experience?
Ben Scott: Absolutely. I mean, just that comment I made earlier about the pre- and post-9/11, there will be a pre- and post-COVID-19 as well. And it doesn’t mean that it will all be bad by any stretch. It will just be a new normal. And frankly, a lot of what we’re going to see is already rolling out. And I think about that first principle of automation: let’s reduce unnecessary human interactions that could pass the virus around. And again, this is all to make people feel safe. I personally haven’t bought a paper ticket to the airport in years. I just use my phone, but even if I do, I’m still the one that’s putting it down on the scanner. We’re going to see, and I saw this in the last year from United Airlines, they’re investing heavily and I’m sure the others are as well to put physical barriers up to replace the gate agents and will all be biometric-based. So it’s not just your phone, but it might just be your fingerprint like you have with the Clear, the way to get through TSA faster through the Clear company you use biometrics. We’re just going to see more and more and more of that. Baggage drop is already largely do-it-yourself. We’re going to see a way that humans aren’t there at all to receive the package. The airline lounge experience is going to be different – say goodbye to buffets in crowded bars and hello to pre-packaged and wrapped sandwiches. Will that be permanent? I don’t know. But for at least the short/medium term, that’s the new reality. The hard part for me in all of that is how do you – how do you get rid of those long TSA lines? I know that Montreal, the way that they tried to deal with it in the past is just to set up appointments for you to go through. So it’s staged and it’s easier to socially distance. I just look at the Minneapolis airport, which is an incredibly busy airport and see these mile-long lines. I really wonder how they’re going to deal with that. But that kind of leads me to my second point. They’ve got to get rid of unnecessary people in the airport. LAX has already done this. You can’t get into the airport unless you have a ticket. I’ve flown to India several times in multiple airports in that country and you’re not allowed inside the terminal without showing your ticket. I think that will certainly last through the medium term and that may be a new normal and it’s exciting in this sense that you could totally rethink the environment of an airport. If you include, say the garages, maybe your car is scanned on the way in, all your luggage there and it was already scanned and you go right into the airport from your car. That’s your TSA scan. So there are changes that we’re gonna see, but if it’s getting rid of unnecessary people, then it’s ensuring healthy people are flying. I know back in ’08 I went to China, in 2010 I went to Russia. In both cases, I had somebody pointing a thermal reader gun at me as we were on the airplane. We weren’t allowed to get off – honestly it felt a little invasive at the time, but I hadn’t been through a pandemic at that point. And this is what I mean by that pre- and post-9/11 thinking. Maybe in the future we’re not going to feel safe unless we’ve had a thermal scanner on the way onto the aircraft. And frankly, some of this stuff is already out there. They’ve got thermal scanners at some airports, but they’re hidden. I did read, and this was pretty interesting, the head of Gatwick airport said, “You shouldn’t even be allowed at the airport unless you’ve had a compulsory virus test 48 hours before departure.” Will something that draconian happen? I don’t know whether the public would be willing to accept that or whether they’re going to demand that, but that’s where we could go. And I guess my final point would just be about keeping it clean. You’ll hear a lot as the industry opens back up about fogging. They’ve been doing it since February on inbound flights from Asia, but those fogging machines, they go in there and after every flight and certainly at night and try to get rid of the virus.
Adrian Tennant: What are the kinds of changes you foresee in the hotel experience as a traveler?
Ben Scott: Yeah, so you do hear things like, “Oh, they’re going to shut down spas and gyms permanently.” And I don’t believe that at all. There will probably be new protocols. There might be a limited number of people in there. There’ll be wipe-down periods where you just take a break and for the next hour we’re going to do nothing but clean and then we’ll open it back up. What we’re seeing in New York I don’t think is sustainable, where you have only one entrance into the building, you’ve got thermal screenings, you’ve got strict social distancing. Over time, that will be eased. What I do think is that you’ll see a lot of is plexiglass barriers. I mean, you see him at the supermarket right now. More and more of that will go up. They will reconfigure their open areas for six foot social distancing. Everybody hates the resort fee. I do wonder if, to pay for all these additional costs and staff to clean in order to make you feel safe so that you do come, that they’ll start putting a special cleaning fee on there ‘cause they’re gonna recoup their costs some way.
Adrian Tennant: Yeah, great point. Now, thinking about how we get to our hotels and resorts, do you think anybody’s going to want to sit in the middle seat of an aircraft ever again?
Ben Scott: Nobody wants to sit in it now. But yeah, that is a problem. You’ve seen the airlines already blocking out those middle seats. Once the airlines start to build their capacity back up, and there is the demand, people are going to have to go there but they’re only going to go there if they’ve got the reassurances that I mentioned earlier. The most inventive thing that I did see that I really – I think that I liked, we’ll see if I have to experience it – but having the middle seat face the other way and then have those plexiglass barriers up between people. And again, that looks weird to me now, but post-COVID-19, that may be my post-9/11, “Oh yeah. That’s just the way things are.”
Adrian Tennant: Staying with airlines, if travelers have a lot of frequent points built up, do you think they should be worried about them?
Ben Scott: No, not at all. I mean everybody in the industry knows that this is the quote, “lost year.” I know, for example, I’ve gotten from my hotel – and I’m a Delta guy ‘cause I’m based out of Minneapolis – notes saying, “look, we’re going to take your Platinum status and extend it a year.” So no, they’re going out of their way to make this lost year for what it is. Just, “Can we just erase this and move forward kind?” of approach.
Adrian Tennant: From travel, now we turn to dining. In April, culinary Public Relations expert Holly Kapherr talked to IN CLEAR FOCUS about the unexpected opportunities and innovations she was seeing in the restaurant industry in response to COVID-19… A Harvard Business Review article published earlier this month cited a national survey of small business owners. Among restaurant and bar owners, 70% said they expect to go out of business if social distancing orders last into July. Do you have any examples of particularly creative or inspiring things local restaurants or businesses have been doing to stay afloat during this pandemic?
Holly Kapherr: Sure. So I think one of the greatest things that’s come out of this pandemic is the creativity that we’re seeing and especially in the restaurant space. And part of it is due to desperation. Certainly, restaurants operate on the lowest margins of any industry, usually between seven and 9% and so this is a lawless time for restaurants. And I tell my clients that, “If you ever wanted to try something, this is the time to try it.” So yeah, we’re seeing a lot of really cool, creative ideas that may not seem cool or creative now, since we are about a month and a week into this pandemic. But before this was happening these things didn’t exist. For example, family meals. A lot of the restaurants that were, in the past, more of an adult-focused restaurant, a fine dining restaurant, or upscale dining restaurants, they’re really focusing on things that make it easy for people to feed their family. And that could be things that are more one-pot so you don’t have to clean a bunch of dishes like a lasagna or like a fried rice or something like that. And then adding sides and adding drinks, I think that’s really innovative in this space and I think people really are taking advantage of it. There are really big sellers among my clients especially, which are located anywhere from Winter Park, which is a much more adult-focused community, to Lake Nona, which is really a family-focused community. So I think that that’s been really creative. We’ve also seen really cool things like Black Rooster Taqueria is doing Margarita-grams. For $20, you can send your friend a Margarita-gram, which includes the margarita mix, the tequila, some salt, and some cut-up limes with some instructions on proportions, which is really cool. Of course they check IDs upon delivery, but I think that that’s adorable. We’re seeing a lot of really cool things with alcohol delivery truly and I think that’s also because we’ve never had that option before. And I don’t want to make it sound like this is a great thing for the restaurant industry cause certainly isn’t, but I think there is a silver lining here and that silver lining is that restaurateurs and chefs are getting to be more creative than they ever have in the past. And from that, we’re going to see a lot of great developments going forward. We may see new restaurant concepts from somebody who you never would have thought to do. Like for example, if you have an Italian restaurant, but you’ve always wanted to try a ramen popup. You know, we have seen that. We’ve seen people pivoting to delivery when they first concepted their restaurant, they were like, “Our food isn’t going to really travel well and I don’t really believe in the third party delivery system.” But they’ve had to pivot really quickly and so they’ve made it work and the reality is that money is money and people need to eat. I think that we’ve seen a lot of really cool things come out of this. And while it is certainly a tragic blow to the restaurant industry – and I don’t want to underplay that at all – that there will be a lot of cool creativity that comes out of this and I think a lot of learnings that will improve the restaurant industry in the long run.
Adrian Tennant: What are some of the things that you’ve seen small businesses doing that have had the most impact either on the business themselves or the broader community at large?
Holly Kapherr: I think alcohol, like I mentioned before, is one of the biggest things that has made a difference. And I think that there’s a real sense of fervor behind supporting your local businesses. And so people are more willing to spend money where they wouldn’t have before. Like for example, on bottles of wine that are now 50% off, or on batch cocktails, or on single-serve cocktails. So I think that’s something that’s really working for restaurants if they can hit the right balance. I think also the family meals are doing very, very well especially if you hit the right price point and offer a family meal for either two people or four people or six people depending on how many people you have in your household and being sensitive to how many people that you know are living at home currently. I think also something that’s been really successful has been GoFundMes for restaurants and GoFundMe has been a really good partner to the restaurant industry so far. So GoFundMe has announced that they are not taking any commission off of any fundraising effort and you can withdraw from your GoFundMe at any time without penalty. And those two things were not in the rule book before all of this. So GoFundMe made those two big changes and the restaurant industry has embraced that. And at least for our clients, we have been working to set up fundraisers and these fundraisers can go to wherever the restaurant wants. So it would be $10 would feed someone at the homeless shelter or $300 would feed the entire shelter for one meal. You know, $15 goes to Thrive, Winter Park, or to feed Winter Park Fire Department. And these GoFundMes, they not only do good for the organization that the restaurant is working with, but they also keep the restaurant employees working. Because the more money that’s coming into the restaurant, no matter if it’s from delivery or from pickup or from GoFundMe, this money is going to make food. And so in order to make food, we need people who are going to work in the kitchen. And, and in order to deliver those things, we need people who are delivery driving. So I think that GoFundMe is a multi-pronged success. I currently have a client that launched a GoFundMe in partnership with a homeless shelter. And within three days, they had raised over $6,000, which fed the homeless shelter the entire month of May for one meal, which is incredible. So we’re seeing a lot of success with that. There are other things that have been really successful for restaurants. For example, one of my clients recently launched a series of virtual wine dinners that was just a rip-roaring success. Last Friday was their first one. They partnered with a local wine market. The chef put together a three-course menu, partnered with another local business, the wine market. The person who owns the wine market, they paired the wines. And then you could come in for $125 per couple. So for two dinners, you got three courses, two full, 750-milliliter bottles of wine, two really great wines, one Bordeaux and one burgundy and then you went home, you had your instructions, put together your plates. They encouraged people to share on social media their plating and tag the restaurant and tag the wine market and tune into Instagram Live where the owner of the wine market and the chef of the restaurant would talk about the food and the wine pairings. And it was a great time. And honestly, Adrian, I don’t know if it’s because I’m just starved for human interaction or if it was just a really fun evening, but we had a great time and it was really successful monetarily and attendance-wise for the restaurant.
Adrian Tennant: It’s clear that the COVID-19 crisis will continue to affect how we work, travel, dine, and shop for some time to come. My thanks again to all the guests featured in this special episode of IN CLEAR FOCUS: market research senior executive Mike Klotz, Professor of Marketing Dr. Yael Zemack-Rugar, travel management expert Ben Scott, and culinary Public Relations professional Holly Kapherr. You can find a transcript of this episode along with links to resources on the IN CLEAR FOCUS page at bigeyeagency.com under “Insights” – just click on the button marked “Podcast.” To ensure you don’t miss an episode, please consider subscribing to the show on Apple Podcasts, Spotify, Google Podcasts, or your favorite podcast player. And, if you have an Amazon Echo device, you can use the IN CLEAR FOCUS skill to add the podcast to your Flash Briefing. Thank you for listening to IN CLEAR FOCUS produced by Bigeye. I’ve been your host, Adrian Tennant. Until next time, goodbye.