by: Sasu Ristimäki and Kim Weckström
As we are in the fourth week of the Nordic corona crisis and the third week of restrictions in Sweden and full lockdown in Finland, there is a sense that people are adjusting to the circumstances. While things are far from normal, we can already get a sense of how the world is shaping to be.
Social Responsibility in a new focus
As brands have rapidly reframed their communications agenda, it has become clear that the focus for consumers and corporations alike is now on corporate Social Responsibility. The broader ESG-agenda has been bubbling under for the last few years, but COVID-19 has suddenly shifted the pointer from Environmental Responsibility (the “E”) to Social Responsibility (the “S”).
Consumer and citizen sentiment emphatically expects corporates to take care of all their stakeholders. A Kantar global survey of 35.000 consumers (as reported by the Data and Marketing Association of Finland) says that 80% of respondents considered that the key priority of brands was to take care of their employees, 74% and considered that brands should not take advantage of the current situation, and 78% thought brands should primarily focus on helping customers on a daily basis.
Governance (the “G”) is a responsibility, particularly to internal stakeholders, while Social Responsibility is more about external stakeholders. Employees that are under duress will expect that management actions are transparent, justified and perceived to be fair. Upholding these principles will be key to maintaining morale across the enterprise.
The question is whether attention will revert back to the Environmental question after the crisis. When we reach a new normal, there is a possibility that a full ESG agenda will prevail and set the tone for the New Normal.
Consumer behaviour patterns not yet clear
Early figures indicate that the impact of social distancing and lockdown reduce overall retail demand fairly consistently by -25% to -35% from previous trend levels. This estimate applies to the Nordics, with Sweden initially being slightly less affected, and the rest of the Nordics slightly more affected due to the severity of national measures taken. Food retail is an obvious exception. Chinese Jan-Mar figures indicate +10% growth sustained even beyond the initial hoarding phase and we would expect Nordic food retailers to perform at least as strongly.
Retail engagement has obviously polarised in most markets. Physical (off-line) engagement has become the virtual monopoly of local supermarkets. Interestingly, while retail has not been compelled to close, most stores are practically empty. The supermarket has become a focal point of daily life for many, and it should allow for an extension of the scope of engagement with customers, beyond the necessities of the Restricted Living phase we are experiencing at the moment. So far, grocery retailers have understandably been focused on the core challenge of maintaining their supply chains and keeping staff and shoppers safe.
Ecommerce should be the prime beneficiary of the crisis. However, early UK and US data, and some anecdotal evidence from China, indicates that Ecommerce demonstrates roughly the same decline as the underlying categories (Within, RetailX, Glimps, Amperity). The exception seems to be Amazon, which continues to rapidly increase its share of online spending.
Eating at home, combined with restaurant premise closures and supermarkets struggling to meet home delivery demand, suggest perfect conditions for food delivery services. Reports from the UK indicate the opposite and that orders have fallen sharply (according to the FT). China’s food delivery leader Meituan Dianping this week warned that its Q1 revenues would actually be down year-on-year!
Consumer behaviour remains in a highly disturbed state and no new normal has yet been established. Communicating with customers remains essential, but the messaging still requires great sensitivity.
On the joys of WFH
The novelty of working from home (WFH) has probably vanished for all of us. People who spend their days in back-to-back video meetings testify that moving cooperation online is both intense and often inefficient. At the office, small things can be handled with a quick chat at the coffee machine. Now everything requires a video meeting with everyone invited. With everyone online all the time, there is no clear start or end to the working day.
In this new WFH world, how will we judge performance? Will we reward those who literally never log-out, who attend every video call, who keep speaking up the most? Or will we find alternative ways to evaluate contributions?
When we add home-schooling, child care, increased housework, etc. to the endless stream of video-calls, many people are likely to feel that they have never before had so little free time, or opportunity to recover. Whereas these are our employees and colleagues, they are also customers. On the one hand, reaching people with addressable messaging has seldom been easier. On the other hand, those people have seldom been in as fraught a mood as now!