COVID-19 as a Trend Accelerator
Key consumer trends that this pandemic is accelerating, and what they mean for brands
Disruptions don’t happen overnight, since the late majority tend to drag their feet long after early adopters have eagerly embraced new technologies and behaviors. But when a global crisis like COVID-19 occurs, it has the power to change behaviors at an unprecedented large scale, thus removing barriers to adoption and forcing existing trends to accelerate in ways that they normally would not have.
Challenging and disruptive as COVID-19 has been, it is also shaping up to be a cultural reset that will lead more consumers into the digitally driven economy of the 21st century. Like the Nile that floods its delta annually, which alters the landscape but also brings nutrition-rich soil onto its banks and grants the bounty of the harvest, this pandemic has also unleashed a great flood that has swept away our daily routines and habits, pushing us to adopt new tools to deal with our new reality — out of necessity now but ostensibly out of preference going forward.
It is also important to differentiate between ongoing trends that are being accelerated by the pandemic versus new trends that are popping up purely because of the special circumstances caused by COVID-19. The former may look boring and uninspired compared to the novelty of the latter, but they will have much more staying power when life goes back to normal. Sooner or later, people will return to the movies and bars and international travel, but social distancing introduced several trends that will likely live on beyond the pandemic.
Digital Culture, Accelerated & Expanded
After three weeks of social distancing, one thing has become evidently clear — this situation could have been so much worse if it had happened without video calls and online shopping. We are all quickly realizing how much of our life, both personal and professional, is now dependent on technology and digital tools.
Taking shelter at home, our need for social connection has only been heightened, resulting in us living out our lives online, even more so than pre-COVID. Social media is already a primary news source for about half of U.S adults before the pandemic hit; it is also how we keep up with the world outside our immediate social circles, which are being sustained by group texts on messaging apps and regular video calls. Comcast says internet traffic from voice and video calls has risen 212% on its network over the past month. Part of that spike is also due to more people than ever being introduced to the joy (and headaches) of remote working. Popular conference call applications such as Zoom and Slack have all seen significant increases in usage and stock prices. Once you’ve witnessed your boss turn herself into a potato in the middle of an online meeting, there is no going back to the boring phone-based conference calls.
And it’s not just working adults; kids are spending more time online too. Sure, they were already hyper-connected before COVID-19 hit, but now with almost all U.S. states closing schools until at least the end of April, most children ages 6–12 say they are spending at least 50% more time in front of screens daily, according to new data from SuperAwesome. Part of the increase in screen time could be attributed to online classes, but some of that is no doubt due to “screen-as-a-babysitter” time that many busy parents are resorting to. No one seems to be worried about limiting screen time any more.
As a result of living our lives fully online, the boundary between our physical and digital selves starts to melt. Walmart has seen a spike in sales of tops, but not pants, presumably because more people are working from home and only bothering to dress up their top half for the video conferences. What we wear below the waist no longer matters as we are all becoming the legless avatars that Facebook envisioned for its VR social space Horizon. Neighbors congregate virtually on Nextdoor to share tips and latest information on dealing with the pandemic, and dating apps like Tinder and Bumble have seen a significant increase in usage, resulting in surging numbers of video and audio dates.
Our content consumption and cultural conversations were already heavily influenced by algorithmic recommendations, but now that we derive most of social interactions through online channels, algorithms are exerting even more control as digital culture takes over. The endless barrage of Tiger King memes on social media and group chats makes it feels like everyone but you has seen this outlandish docu-series on Netflix, so you feel compelled to watch it too, if only to keep up with the cultural discourse during a time of social isolation. When we live our lives online, all culture becomes digital culture, which naturally spurs two by-products: democratized creativity and virtual experiences.
Now that we derive most of social interactions through online channels, algorithms are exerting even more control as digital culture takes over.
Democratized Creativity Boosts the At-Home Economy
As we explained in our Outlook trend report this year, the rise of digital tools and productivity software has demonstrated content creation for anyone who can afford a smartphone. As major parts of the emerging and democratized digital economy, SoundCloud rappers, influencers, and meme accounts were already changing our culture. Now that COVID-19 has shut down the offline channels that many people’s livelihood depends on, more people than ever are turning to digital channels and creative tools to connect with their audiences.
From barbers to pastors to fitness instructors, people of all professions that used to make money via in-person services, are now turning to online platforms to make money using their expertise, often through live video. Chefs of Michelin-star restaurants are broadcasting cooking lessons online in hope of reaching new audiences and, sometimes, promoting their delivery services. Book Larder, a food-focused bookstore in Seattle, is offering virtual shopping trips, in which a bookseller walks a customer through the store via FaceTime and helps them select the right books.
Sure, bonafide celebrities are also turning to live video to maintain their relevance, and they can host free concerts on Instagram Live and organize corny, pseudo-uplifting singalongs all they want. Without the help of a professional team, however, their production value is suddenly at the same level of, if not worse than, a regular YouTuber. After all, YouTubers, podcasters, and social media influencers already knew how to produce quality content at home.
As a result, creative platforms are seeing a major uptick in sign-ups. TikTok has reportedly seen a surge in U.S. downloads in response to the shut-in orders. (And now YouTube is reportedly working on a new format called “Shorts” to compete with TikTok.) Patreon says that 30,000+ creators signed up for its service in the first three weeks of March, which nicely pairs with a surge in people willing to pay. Similarly, Twitch has changed their rules to allow musicians to unlock Affiliate status faster so they can start monetizing their live streams, and Adobe extended its Creative Cloud trial period to 2 months, giving more people the tools to expand their creative pursuits.
All the creative talent and services that are distributed via offline channels under normal circumstances have suddenly shifted online and adopted new formats to reach audiences who are stuck at home. Even after the pandemic passes, many will likely sustain their online presence and continue to display and monetize their talent and expertise on digital platforms.
All the creative talent and services that are distributed via offline channels under normal circumstances have suddenly shifted online and reached new audiences.
In the long run, this accelerated democratization of digital creativity will continue to diversify the already dynamic UGC (user-generated content) space, further fragment audience attention, and reprioritize category-specific expertise over generic attention-seeking as the key skill for influencer marketing. Therefore, smart brands should make an effort to support digital creators with the right tools and brand assets, thus enabling loyal fans to become brand advocates.
For example, in response to social distancing, whiskey brand Jack Daniel’s cobbled together a new ad spot from user-generated footage all shot from home, showing how people are adapting to their new reality of socializing while apart. As we learn to live our lives online, we are also increasingly embracing virtual experiences, especially social gaming.
Virtual Experiences Accelerate Social Gaming
The experiential economy is a fast-growing multi-billion dollar business. According to a 2017 McKinsey report, consumer spending on experiential services — such as attending spectator events, visiting amusement parks, eating at restaurants, and traveling — was growing more than 1.5 times faster than overall personal consumption spending and nearly 4 times faster than expenditures on material goods. None of those real-life experiential services are available now in the time of coronavirus, and in the void they left a myriad of virtual experiences has emerged, especially those that facilitate social interaction via games.
Let’s face it, FaceTiming friends and family has become somewhat of a chore. Under normal circumstances, our social life does not only involve chatting endlessly while sitting down. When we socialize with friends and family, we go see movies together, we go on hikes together, we eat together and play board games with each other. In short, we do things together, physically. Shared activities are what people often bond over, and that is a crucial element missing from most video chat apps today, rendering some virtual hangouts as boring as forced small talk. Worse still, because everyone is stuck at home, there is only so much we can talk about before the conversation inevitably turns to the pandemic and its uncertain outlook. While commiserating has its emotional benefits, fun is hardly ever one of them.
Therefore, it is not difficult to see why many people have turned to apps like Houseparty or games like Fortnite and Animal Crossing to fulfill our need for social connection. Houseparty, a group video chat app that was already popular with teens, stands out from the likes of vanilla video chat apps like Google Hangouts, Skype, or FaceTime, because it natively integrates simple party games such as Trivia or Heads Up! for group chat participants to play together. Unsurprisingly, Houseparty has seen user numbers skyrocket in the past three weeks — from around 130,000 downloads a week in February 2020 to around 2 million downloads last week, according to data from App Annie.
This unique combination of socialization and online games may be what led to Houseparty being acquired last year by Epic Games, creator of the smash hit MMO (massively multiplayer online) game Fortnite. We have written about Fortnite’s conscious efforts in becoming an immersive online social space, as well as its long-term ambition to build a metaverse. This social dimension of MMO games like Fortnite, but also Roblox and Minecraft, are becoming increasingly crucial to the future of online interactions, whether you play games or not today.
Then there is Animal Crossing: New Horizons, the latest installment in Nintendo’s popular life simulator franchise that was opportunely released on March 20. The game essentially gives every player an island to build and manage, and while it is not an MMO game like the aforementioned titles, players can visit each other’s islands once they connect online via Switch codes. With relaxing, low-stakes gameplay and cute, retro design, it offers a much-needed sense of normalcy and control for many players under lockdown. Naturally, some players are already using Animal Crossing as a way to celebrate special occasions like weddings and visit friends they can’t see in person.
Gaming is already enjoying a “stay-at-home” boost even without the social aspects, but in times of social isolation, games are quickly becoming a key channel for delivering shared virtual experiences to substitute our normal social activities. Even NBA stars will soon be playing video games on ESPN. But at the end of the day, it’s less about the games themselves, and more about the virtual spaces they create for people to socialize and explore together.
In times of social isolation, games are quickly becoming a key channel for delivering shared virtual experiences to substitute our normal social activities.
This accelerating trend means that, besides the usual tactics brands employ to reach their audiences in games or social media, they could be better served with a more holistic approach that incorporates the social elements of online gaming into other activations across channels. Unlike traditional media channels, online channels are a two-way street that allow audiences to offer real-time feedback, and brands that can successfully tap into that inherent interactivity baked into online games will win future audience engagement.
Omnichannel, Now More Than Ever
As consumers turn to online channels during social distancing, companies without a robust online presence, cloud infrastructure, and an omnichannel strategy suddenly find themselves at a great disadvantage. Some industries, such as air travel or healthcare, have been resistant to embrace digital tools and reform their business practices to meet changing consumer demands, either out of inertia, distribution dynamics, or regulatory concerns. For them, the impact of COVID-19 serves as a wakeup call to modernize their enterprise infrastructure, update their distribution strategy, and finally give the customers what they’ve been asking for.
For businesses that still rely on brick and mortar channels for distribution and sales, it is time to consider leveraging stores or other physical footprint as a jumping-off point to build out logistics to support online sales. Restaurants, retailers, and luxury brands all need to leverage online impressions, earned or paid, to direct audiences to order online, and leverage existing offline infrastructure to deliver the products in a timely manner. For example, some clever restaurants have turned their dining rooms into pop-up markets and Dig Inn and Juice Press have expanded their produce box delivery options.
For those in the food industry, the slow shift towards online grocery shopping is being accelerated by COVID-19, further underlining the importance of establishing an omnichannel strategy. According to data from Apptopia, downloads for grocery delivery app Instacart increased by 215% between February 14 and March 15, while downloads for Walmart’s grocery app increased by 45%. In a way, online grocery shopping could serve as a stepping stone for many late-adopters to embrace ecommerce in other categories. Walmart has announced it plans to retire the stand-alone grocery app and merge it with its general app, further consolidating its online channels to spread ecommerce interests in one category to others.
Online grocery shopping could serve as a stepping stone for many late-adopters to embrace ecommerce in other categories.
Scaling last-mile delivery operations has also become a challenge during this pandemic for many businesses. Last year, ecommerce sales accounted for 11% of all retail sales in the U.S., which means that 89% of sales still happened via offline channels. With even a fraction of those offline transactions spilling into online channels as consumers hunker down at home, retailers are facing a wave of online orders that could easily overwhelm their logistics operations. In response, existing trends in this space, such as automation (Mayo Clinic has reportedly started using autonomous vehicles to deliver coronavirus tests and medical supplies), or alternative pickups (like curbside pickups or Amazon Locker delivery), could be accelerated to address this issue by minimizing in-person contact.
For brands in more service-oriented industries such as personal finance, insurance and healthcare, now is a great time to update communication channels to ensure that service is available to customers seamlessly via offline and online channels. Some services may be hard to replicate for an online environment, either due to privacy concerns or inadequate online infrastructure, but online channels such as investment apps and telemedicine services can nevertheless serve as important customer touchpoints to maintain contact and offer services.
Just because COVID-19 has thus far rendered offline touchpoints less important doesn’t mean brands should completely abandon them and switch to an online-only model. For digital-native brands, especially the direct-to-consumer (D2C) brands who should have been less impacted by disruption caused by the pandemic, life isn’t so rosy either. For one, because many heavily rely on the global supply chain to handle outsourced manufacturing and logistics, their operations are also just as severely impaired by the pandemic as others. In addition, many of them have already maxed out the lower funnels of customer acquisitions and are now competing with legacy brands and market incumbents for upper-funnel attention.
In conclusion, the impact of COVID-19 is accelerating our ongoing socio-cultural shift of embracing the online world and all it has to offer. But the digital economy doesn’t exist in a vacuum and, for many industries, it needs to be supported by strong offline infrastructure and a seamless transfer between the two worlds whose boundaries are fast blurring. The smartest brands know that, to prepare for a post-COVID-19 world, it won’t be enough to keep up with the trends like before; instead, brands will need to accelerate their innovation efforts to make sure every part of their businesses, from marketing strategies to distribution channels, are staying ahead of the curve.
Want to Learn More?
We’re staying close to the disruptions that are being created and accelerated by COVID-19. To keep up with our latest news and insights on COVID-19’s near-term and long-term implications for marketers and brands, please be sure to subscribe to our Floor 9 podcast, now with new episodes weekly.
In addition, we have created some presentations on the business impact of COVID-19 across industries that are available for clients that would like to start a deeper conversation on how to weather the pandemic and prepare for a post-COVID world. If you’d like to learn more, please reach out to Josh Mallalieu, our Group Director, at firstname.lastname@example.org.