Bracing for Lockdown 2.0 — What Brand Marketers Need to Know
December is shaping up to be the new April, and brands should prepare for many media and consumer trends to re-accelerate
December is the new April, judging by the way things are going. With new Covid-19 cases sharply climbing nationwide, some states such as Washington and New York have already reinstated some restrictions that were previously put in place to encourage social distancing and curb the third wave of outbreak.
Unfortunately, the timing couldn’t have been worse, given that it’s the season of holiday parties and family get-togethers. About 40% of Americans surveyed say they plan to gather in groups of 10 or more people this holiday season, and nearly 33% say they will not require friends or family to wear masks at Thanksgiving gatherings, according to a national survey commissioned by The Ohio State University Wexner Medical Center. The promising news of effective vaccines gives reason for hope, but since they won’t be distributed at a meaningful scale until at least March, social distancing precautions still need to be in place for winter.
So yes, if the data from the aftermath of Canadian Thanksgiving celebrations last month is any indication, we are more than likely looking at another round of strict lockdowns and stay-at-home orders in the U.S., just when many people are on winter break. Call it déjà vu, but a lot of the trends observed in spring during the first wave of outbreaks will likely repeat themselves, possibly with new twists given that there is more free time and no additional stimulus check. As we brace for an unprecedented holiday season, here are what brand marketers should keep in mind.
Cord-Cutters Turning to vMVPD Services for Sports
Live sports content has long been the main reason for people to keep their pay-TV subscriptions. So it’s no surprise that cord-cutting accelerated earlier this year when most sports events were put on pause. According to the latest estimate from MAGNA GLOBAL, about 7 million U.S. households will cut the cord this year, and nearly 29 million households will drop their cable subscriptions over the next five years.
Now that sports have restarted and returned to TV, those viewers that have parted ways with pay-TV are not returning in droves. Unusual conditions have led viewership for most live sports to see deep declines since the covid 19 hiatus.
Instead, viewers are turning to cheaper Virtual Multichannel Video Programming Distributor (vMVPD) services, such as Sling TV, YouTube TV, or Hulu’s Live TV, for their sports fix. Over the holiday season, more people that have ditched cable for streaming services may try out vMVPD services for live sports content.
Cord-cutting is showing no signs of slowing, and the disruption in sports programming this year, coupled with economic uncertainty, have given more people than ever a reason to cut the cord and change their viewing habits. To stay ahead of this trend, marketers and brands need to reconsider their media mix and start exploring ad opportunities on OTT services today.
More Holiday Gaming Time with New Consoles
Gaming is one of the media categories that have received a significant boost this year. Deloitte reported 34% of U.S. consumers had tried a new gaming activity during the first round of lockdown, and time spent on gaming increased by 45% year-over-year in March, per Nielsen data.
Heading into the holiday season and facing another round of lockdown, coupled with the arrival of highly anticipated new gaming consoles (despite shipping delays and inventory shortages) time spent on gaming will likely see another major boost and keep the growth momentum going well into next year. U.S. consumers are projected to spend $13.4 billion on gaming equipment and software this holiday season, according to a recent report from NPD Group,
For brands and marketers, this means it is time to invest in gaming as a marketing channel, leveraging in-game content and broader partnerships to organically integrate into popular video games, and reaching audiences via game-streaming sites such as Twitch, which has over 26 million daily active users and on average over 2 million viewers at any given time. Notably, Twitch also recently started beta-testing a new interactive ad unit, which follows up an ad with a poll that awards participants with virtual goods to boost engagement and recall.
It is also important to recognize that gaming is quickly becoming a mainstream cultural force, most recently demonstrated by congresswomen Alexandria Ocasio-Cortez and Ilhan Omar live-streaming themselves playing the viral hit game, Among Us, on Twitch and attracting around 5.2 million viewers in aggregate. For brands seeking to be part of the cultural conversation, gaming is one media category that should not be overlooked.
Virtual Experiences As an Escape from Holiday Blues
Related to the growth of gaming is the rise of interactive virtual experiences that are typically activated inside popular multiplayer online (MMO) games such as Fortnite and Roblox. They allow people to come together to partake in shared experiences, such as the Travis Scott’s Fortnite concert in April that was attended by 45 million players, or Lil Nas X’s recent live shows in Roblox that amassed 33 million views across two days. Going into the holiday season, this type of virtual experience — as well as their less-immersive cousins conducted over Zoom — will likely see another boost as they offer a welcome escape to people stuck at home.
Taking advantage of the vacuum left by the cancellation of in-person events, MMO games are aiming to become a new third place where people congregate and socialize. In July, Roblox launched Party Place, a private venue for virtual birthday parties and other meetups. Similarly, Fortnite launched Party Royale in May and proceeded to host a series of virtual events. This week, Fortnite also enabled video calls in Fortnite via a Houseparty integration to further strengthen Fortnite as a social channel.
As more people become accustomed to these interactive virtual live experiences, whose value has been amplified this year, they present plenty of brand opportunities for marketers to explore. Although no brands other than Disney have leveraged these virtual venues to host official in-game events yet, brands like Wendy’s and the NFL have found creative ways to engage with Fortnite audiences via branded livestreams and digital goods.
Last-Minute Holiday Shopping in Online Malls
In our recent piece on how this holiday shopping season will likely shake out, one of the key trends we noted was the accelerated shift of holiday shopping, and shopping in general, to online channels. Last year, U.S. holiday ecommerce sales grew to $137.6 billion, accounting for 13.6% of the $1.01 trillion total holiday retail sales in 2019. It wouldn’t be too surprising if that percentage were to exceed 20% this year, especially if another round of lockdowns and store closure prevent shoppers from shopping in person. Thanks to an early start to holiday shopping, Walmart already reported better-than-expected third-quarter earnings as customers continued to embrace online shopping services.
In response, retailers need to brace for an influx of online orders and the resulting strain that it may put on their ecommerce and logistics operations — a holiday “shipageddon,” as one New York Times headline calls it. Estimated data from ShipMatrix shows the “current capacity shortfall could average as much as seven million packages a day between Thanksgiving and Christmas.” Retailers without a robust ecommerce presence will be at a great disadvantage, but even the ones that do should take precautions. Hopefully, after ten months of relentless retail transformation, most retailers are ready to take on this challenge.
With holiday shopping accelerating online, new opportunities also emerge to reimagine the brand experience in online channels. Using live video to showcase best-selling items and offer curated gift guides could be a great way to spark gifting inspiration and drive consideration, whereas AR-enabled virtual try-ons could imitate the fun of browsing and sampling products in-store. Social commerce may also see a major lift, given the recent rollouts of various shopping-friendly features across Facebook, Instagram, and TikTok. It is time to get creative to emotionally connect with at-home shoppers searching last-minute gifts.
Cook Yourself a Merry Little Christmas
Food plays a central role in many holiday festivities, and this year will be no exception. However, the way people shop for groceries and order takeout also underwent a major digital transformation this year, which will likely show some re-acceleration in December. 78% of U.S. shoppers surveyed said they made a change in where they shop for food: 40% shopped at fewer stores, and 28% shop more online, per a FMI study released in June. Grocery delivery services like FreshDirect and Instacart, as well as food delivery services like DoorDash, Postmates (acquired by Uber in July), and GrubHub, all saw significant growth this year, and would see another round of usage spike if on-site dining were to become temporarily prohibited again.
Given potential stay-at-home restrictions, restaurants and food brands need to take proactive measures to meet shifting consumer behaviors. For example, some restaurants are shifting their offerings to include fresh ingredients for home cooking. More restaurants should update operations to include things like on-demand delivery and contactless payment options, as well as updating menus to cater to changing consumer demands of off-site consumption and family-sized meals.
From a media perspective, digital and social video has become a great way to engage with food. Food has always been a key component in our shared holiday experience, and food brands can leverage digital tools to recreate the food experience online. Whether it’s partnering with an influencer or food expert like Bon Appetit to create engaging videos that showcase your products, or creatively using teleconference tools and live video to produce unique online experiences around food and cooking with a tie-in to online orders, brands should aim to facilitate a connected home dining experience fit for this unusual holiday season. For example, HelloFresh is enlisting comedian Mindy Kaling for a sitcom-style digital series on quarantine cooking with Kaling referencing HelloFresh recipe cards to solve problems.
It’s always darkest before the dawn, so we should hold on to hope as we stare down another seemingly inevitable round of lockdowns. It is also important to note that not all consumer behavior changes forged this year will automatically revert back. Some new behaviors born out of necessity will continue thanks to the convenience and superior user experience they enable. Most of the aforementioned trends fall under that category, which means they are worthy territories that brands should explore and invest in with a long-term vision.