New Behaviors Update


We’re back at it

2021 is on the horizon and 2020 is almost in the rearview window. Back in May we released our New Behaviors report, our perspective on the different strategies available to brands in the face of COVID-19. In the 7 months since, so much has changed but also it feels like so little has? And with a vaccine likely to be widespread by mid-2021, we finally have an end in sight, or at least a new chapter. So we thought, as an exercise in reflection, we’d take a look back at the strategies we explored in the New Behaviors report and see how they held up.

Adapt

We defined this as embracing the situation. Many brands and businesses have found themselves in this situation. Consumers changed their habits and businesses likewise had to modify their products and practices in order to keep business. We predicted that the golden opportunity here was to retain and grow those new demand sources as core business pillars rebound. And when we look at how many brands have fared, that seemed to be the best strategy.

One of the scenarios we explored was the most common: part of your business is struggling, but another is thriving. Nike is a fantastic example of this. After watching how their business went in China, they were able to develop a “pandemic playbook”, which included a sharp pivot to digital sales and building out their fitness app. Meanwhile, they slowly and strategically reopened physical stores. And it paid off. They recently announced a $11.2 billion quarter, up 9% year over year, that almost matched their 2019 numbers.

In the report, we talked about how for some brands, adapting could also mean accelerated timelines for changes that were anticipated, but thought to be many years down the road. For a medium that had already “blown up”, podcasts continued to do just that during the pandemic. Overall downloads of podcasts in the US have increased by 150% in 2020, according to data from podcast measurement company Chartable. A huge part of this was that podcast production wasn’t delayed like it was in other mediums. This growth was likely to have happened regardless of COVID-19. Spotify, for example, was making moves towards the podcast business before the pandemic even started. But since the beginning of COVID-19, Spotify has continued to buy companies and sign deals with podcast behemoths like Joe Rogan and Michelle Obama. In October they reported an all-time high of 144 million paid subscribers worldwide.

Disrupt

This category was for brands whose business was uniquely positioned to see the new pandemic habits that are here to stay. The challenges facing these brands were all variations on the same theme: how to retain and fuel these new audiences and occasions as the crisis fades. 

We talked in the report about the difficulties of keeping up with the new demand. Mishandling that could really tarnish a brand’s reputation. Nugget, manufacturer of furniture that doubles as children’s play structure, avoided that problem with an ingenious marketing ploy. The saving grace of many working parents, their couch was in high demand, but stock was limited. Instead of a typical back order announcement, Nugget created a weekly lottery. For a brand with a devoted consumer-base (60,000 members in its Facebook group), this created a lot of hype while managing the expectations of sparsity. The first week saw nearly 100,000 people reportedly enter…for 5,000 Nuggets. Rough odds.

Meanwhile, Etsy tried a different tactic. Instead of funneling consumers, it spread the love. With more traffic to the site for handmade masks and twice as many new sellers, Etsy could have doubled down on the new category. But Etsy was able to redirect visitors to other non-mask vendors, resulting in a 93% year-over-year increase in the sale of non-mask products.

Recover

For some brands, there was little recourse other than waiting out the storm. The probability that consumer habits would eventually resume was high, but certain brands could only play a waiting game. Our recommendation for those brands was to recover lost demand as quickly as possible. And when we revisited this category, it seems like that advice is paying off.

One of the scenarios we covered in the report was just to make your products and services as available as possible in order to maintain your position in your audience’s mind. The Gap seemed to have followed that very strategy. The Gap wasn’t doing too well when the pandemic started, but they (like every new seller on Etsy) started selling face masks. They sold to consumers and then to businesses in large quantities. It was a desperate act, but it paid off: Q2 brought a 13% sales increase for The Gap. 

Meanwhile, the airline industry has arguably been hit the hardest by the pandemic. US airlines saw their lowest passenger numbers since the war-era 1950s. But the industry has found an inventive way to recover some funds that has some scratching their heads: flights to nowhere. Alleviating months of monotonous quarantine and predicting that travel habits were deeply ingrained, some airlines have started offering flights that take off and land at the same airport, usually with a sightseeing component. Australian Airline Qantas announced a seven-hour flight to the sky and back down. It sold out in 10 minutes with tickets selling between $600 and $2,700. In a global pandemic, you often have to take what you can get and we’re just here to cheer you on. And overall they’re making bigger changes to how people fly, cutting fees that have plagued customers for years and rethinking the experience for a new reality.

Reimagine

Our last category called on brands to forge their own paths. The pandemic may have forced many audiences to suspend or change their habits, but it has also revealed new ways of thinking and working. For certain brands, this once-in-a-lifetime global pause offered a rare opportunity to reposition and reimagine.

Worker rights and working-from-home were hot topics even before COVID-19, but the pandemic only further highlighted inequities. During this time, many organizations have answered the call and changed their practices. Twitter announced that WFH would become permanent, projecting remote flexibility as a norm for many. And Walmart has raised their wages (the federal minimum wage has stayed the same for the past 11 years). While Walmart was able to afford this because their profits soared and many competitors closed, the wage increase does raise the standard for other retail employers and helps workers everywhere.

In the original report, we talked about how it can be hard to find the groundbreaking idea, but sometimes the biggest inspiration can come from the standards of your industry. For BP, oil is their main trade. And yet this year they announced they will drop 40% of their oil production, lowering carbon emissions by more than 30%, and increasing low-carbon energy spending by 1000% by 2030. And for big pharma, an industry standard is aggressive first-to-market practices. The first to release a COVID-19 vaccine will certainly corner a truly global market. But nine pharmaceutical CEOs publicly pledged to not rush the process and to ensure that all testing is done “in accordance with high ethical standards and sound scientific principles”. Both of these examples show possibilities previously unheard of that could very well set new paths forward.

So long, 2020

We don’t think anyone will honestly say 2020 was their favorite year, but it did reveal a lot about audience behaviors and how brands can meet them. Our initial New Behaviors report explored strategies available to brands and seven months later, we are pleased as (holiday) punch to see our strategies used successfully by brands. Each of the brands we covered found themselves in the same storm as all of us, but they used specific tactics relevant to their strengths and position. When we look across the board, we see brands from all different industries and of very different sizes. But what unites them is their strength in using their clear positioning to guide them through the tumultuous waves of 2020. By staying true to their brand personality, like how Nugget made a game out of grabbing one of their play couches, or by finding new ways to share their signature offerings, like Nike’s embrace of digital, these brands have shown that the HOW or the WHAT aren’t as necessary as the WHY. The storm isn’t over yet, but we see the light at the end of the tunnel and we hope you do too.