Consumer insight can help firms through crisis

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THE Covid-19 pandemic has upended entire industries and caused huge disruption for consumers. While Government intervention has been able to mitigate some of the damage, as the Chancellor has warned, such levels of public expenditure can’t be sustained indefinitely, besides which support grants and even the hugely popular furlough scheme are pretty blunt instruments. Businesses are having to adjust rapidly to these new circumstances and re-evaluate future plans. Ann Hodgson, Income and Expenditure Manager at Passport, reported: “As a consequence of the Covid-19 outbreak, global consumer expenditure growth is set to slow to 0.7 per cent in real terms year-on-year in 2020 (down from 2.5 per cent in 2019)”. Sectors such as hospitality, tourism and events, which had been growing steadily, have seen revenue evaporate, while for a select few, consumer demand has seldom been stronger. According to Euromonitor, food and nonalcoholic beverages are predicted to outstrip other sectors as the fastest-growing category in 2020. Kantar found grocery sales hit a record high in March as consumers spent an extra £1.9 billion, girding themselves with cupboard staples, ahead of a Government lockdown. How can local food firms best position themselves to follow a similarly strong trajectory? Data could prove an important tool, mapping changing demand and patterns of behaviour. The data suggests people aren’t just buying hand sanitiser, loo roll and pasta.
Sales of products like almond milk soared (up 350 per cent in the eight weeks to the end of April, according to Nielsen) while plant-based meat alternatives and unusual meats such as bison saw big increases in sales. According to Kantar WorldPanel (2020), it is estimated that there will be 503 million more in-home meals per week consumed during lockdown, suggesting that people worldwide are cooking more than ever. This trend is creating the opportunity to support aspiring home cooks by developing new offerings around pre-prepared meal kits and allowing restaurants to continue to provide a high quality dining experience to customers in their own homes. Challenges around the social side of food are also being overcome with the creation of virtual dinner parties, wine clubs, cheese clubs and cook-a-longs, to name a few. Due to uncertainty about the future and job security, consumers are likely to be more cautious over discretionary spending.
However, items relating to cooking, cleaning and/or preening are amongst the most likely areas where we will witness discretionary spend. Concerns relating to spreading any infection has meant more people are going cashless, using contactless payments (Euromonitor, 2020). However, one of the biggest shifts in behaviour, which will likely continue postpandemic, is the demand for purchasing products and services online. In the last week of April, Tesco surpassed one million online delivery slots across the UK while prior to the pandemic, the retail giant said just seven per cent of groceries were bought online. The online grocery market offers many opportunities for emerging food businesses as three quarters (74 per cent) of consumers said that shopping online allowed them to discover new food brands (Mintel, 2020). Hot on the heels of Brexit and its customs conundrum, the current pandemic creates yet more uncertainty for NI companies, therefore data-backed research into consumer behaviour, in relation to the foods they buy, will give evidence to help them to make important decisions around the future of their businesses. Consumer Insight expert Professor Geoff Simmons, who has recently joined the Food & Drink Business Development Centre at Ulster University Business School, stated: “The Northern Irish food and drinks industry is dominated by small firms with limited resources and access to shopper data presenting a key challenge to understanding how to respond to consumer demand in the midst of Covid-19.” Simmons goes on to highlight the significant role Big Data such as Tesco Clubcard (Dunnhumby) research can play in sourcing this type of insight for our local companies: “Over the past 10 years my funded research, supported by Invest NI and DAERA, has provided Tesco Clubcard insight to many NI firms. Using this information results have led to new product innovations, new listings with multiple retailers and other successes for large and small firms alike, including Dale Farm, Irwin’s Bakery, Mash Direct, Genesis Bakery, Wilson’s Country, Doherty and
Gray, Finnebrogue, Cloughbane and many more”. Funding from the Government and food industry bodies could allow smaller firms access to Big Data consumer insights and the expertise to help them make sense of it. The richness and precision of these insights is typically beyond the reach of small Irish food companies. However, at this critical juncture it could be the key ingredient for ensuring their survival and future success in the face of Covid-19 and its economic fall-out. Professor Simmons’ research, published in Harvard Business Review, highlights how insight from Big Data can be used to develop the marketing and new product development capabilities of firms. At a precarious time for many smaller businesses, access to this sort of information could help them to better understand the changing consumer landscape and take advantage of the opportunities this brings.