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Customer Experience Year Zero

CSR

18/01/2021

How the pandemic has changed the customer experience

Revisiting how business is done in the new normal

The pandemic will be remembered as a major disruptive event that has, in many cases, rewritten the rules and given rise to a sort of Year Zero. The global spread of Covid-19 and the consequent adoption of safety measures by governments have impacted everyone’s life. In just a few months, new lifestyles have taken shape, along with new eating habits, new ways of enjoying ourselves and new shopping experiences requiring businesses to respond while also dealing with the crisis-induced economic difficulties. 

The role of companies guiding customers towards a new normal

Even the most well-established companies have had to rethink and adapt their business models with the consumer playing an increasingly important part. Amanda Hicks, brand and marketing advisor for KPMG Australia, a network of independent firms that provide professional services to companies, clarifies: “During the pandemic period, customers have perhaps for the first time seen organizations put their customers and their people’s wellbeing before profit. Leading organizations have acted compassionately and sensitively to the factors that affect trust. Going into the new reality firms will need to be careful they do not undermine this newly acquired trust.”
 

The new consumer

It follows that the public health emergency has also profoundly impacted the quality of the customer experience, i.e., the set of experiences, sensations and emotions generated by interaction with a brand, offered by a company. Many companies have explored and adopted different methods and approaches to respond to consumers’ changed requirements. 
Concerns about the present and uncertainty about the future have tipped today’s consumers into a strange psychological quagmire leading to changed values and needs.

Customers are willing to pay a higher price for brands that adopt ethical behaviour

 

What has changed?
The need for safety. The public health emergency has prioritised people’s need for safety, as demonstrated, for example, through greater attention to detail: consumers are more aware of a brand’s ethics and its ability to act responsibly.

The decision drivers. The unprecedented economic slump has obliged consumers to focus on different aspects when making a purchase. The price/quality ratio is essential when selecting a product.

Digitalisation. The forced lengthy isolation has catapulted digital channels to the forefront. Customers are more inclined to purchase online and this trend is consolidating.

The swift move towards the digital world is challenging to consumers, especially at first, but it has given them more scope and narrowed the structural gap between Italy and other European countries.

The new reality and consumer trends

KPMG’s survey on customer experience gives us a clearer idea of how purchasing habits have changed as a result of the public health emergency.

The overall reduction in consumption is immediately apparent due to the decrease in disposable income and the physiological impact of Covid-19. Consumers have become more thrifty, make careful decisions and more often decide against non-essential purchases.
On the other hand, we have seen an upturn in the use of digital channels to purchase goods. Social distancing and safety measures have reduced physical purchases to the benefit of online shopping. Online touchless shopping and contactless payments have become par for the course for most consumerssince the second quarter of 2020. Physical retail stores have had to deal with a drop in their revenue while e-commerce has taken off.

Record levels of digital transactions in 2020

Another interesting aspect is local shopping, encouraged by restrictions on movements and the increased time spent at home. Around nine out of every ten consumers state that they are willing to pay more for products that support the local economy and the tendency to buy local is on the rise.

Compassionate brands

Many Italian brands have responded to the difficulties caused by the pandemic, taking an innovative and challenging approach to adapting their products and services. They have achieved this without neglecting fundamental elements such as an in-depth understanding of the customer and the ability to respond compassionately given the crisis situation
For example, during the public health emergency, Amazon prioritised essential goods for delivery and played a key role in their procurement with an extension of the timeline needed to handle them compared to other goods. 
The behemoth Apple made devices available for distance learning, which was used heavily during the pandemic. Specifically, it provided a collection of books and apps in its store to help teachers and parents assist children with online learning. The Apple Teacher program providing teachers with engaging teaching ideas is also deserving of mention.

Many brands have stepped up providing technological solutions for this crisis 

Other companies have contributed to enhancing the time of individuals in lockdown situations or affected by restrictions limiting their movements and social lives. The retail clothing brand Adidas launched the #hometeam project offering three months of free access to a training app to combat a sedentary lifestyle. World famous athletes participated in the project providing online coaching sessions for the users.

Towards a trust-based economy

Covid-19 has prioritised the aspect of trust in relationships between consumers and businesses and in influencing purchasing decisions. As trust is based on customers’ perception of safety and of the behaviour of the company vis-à-vis its local community, companies need to focus creating experiences that showcase their commitment and transparency. Over the long term, this implies revising their business models with a strategy that is not based on profit as the number 1 goal.

Companies and society at large have become more customer centric

We are living in a sort of new renaissance where people are at the heart of the world’s attention and the centre of companies’ decision-making processes. Innovations that companies had unsuccessfully endeavoured to include in their business models for years have suddenly been achieved, drastically modifying how companies work and interact with their customers. One important consequence has been that companies now acknowledge the importance of the physical and mental wellbeing of all the people involved in the production process.