How were relations between customers and brands during COVID? A new study by McKinsey reveals the reasons why South African customers broke up with their usual retailers, stores and websites during the pandemic.
The COVID-19 crisis led to new shopping behaviours in South Africa. It increased the use of restaurant delivery, drive-thrus and click-and-collect buying. Surprisingly, most consumers report that they intend to continue their new shopping habits after the pandemic. These findings could be bad news for brands hoping to get back some love from customers who deserted them during the pandemic.
If your customers broke up with your brands during COVID, don’t adopt a ‘wait and see’ approach or hope that things will work themselves out. You need to win your customers back by taking immediate action. To win back your customers, you must understand why you lost them in the first place.
In this article, you will find out why your customers left you in the first place and how to get them back.
Your consumers need convenience, value and product availability
79% of consumers changed the stores, brands or the way they shop during the COVID-19 pandemic in South Africa, according to the study. Most consumers cited convenience (76%), value (59%) and product availability (22%) as the top three reasons why they chose to change to different retailers, stores, websites and ways of shopping.
#1. Your consumers want convenience
Customer convenience is any action a business takes to make life easier for its customers. Convenient customer experiences save customers time and effort. It often increases customer satisfaction.
Based on the study, most consumers prefer convenient shopping experiences where:
- products are more easily accessible from home (37%),
- there is less crowding and shorter queues (37%),
- all the products are in one shop, i.e., “one-stop-shops” (20%) and
- the stores have delivery or pick up options (18%).
The fact that an individual could order from an online retailer and have the products delivered to their home was a major factor for most consumers. Today’s customers clearly value being able to shop at any time of day. They value not having to deal with traffic, crowds or long queues. Convenience is king in today’s fast-paced world. Convenience means offering an easy way to buy your products and ensuring the payment process is safe and quick.
#2. Value is important to your customers
Simply put, customer value is the perceived worth of a product or service compared to your competitors’ choices.
According to the McKinsey study, most consumers prefer shopping experiences that offer value through:
- better prices or promotions (40%),
- Enhanced value (19%) or
- Superior shipping or delivery costs (15%).
In some instances, consumers thought that prices charged by online stores were cheaper than those in physical outlets. This perception would explain the 150% growth in consumers who purchase online for most product categories in the study. And why 90% of those consumers intend on using online post COVID-19.
Pricing is an important factor that influences decisions about who and where to buy from. You don’t need to always be the cheapest option but if your prices are perceived as being higher than your competitors’ then there needs to be a good reason for this. For example, if your product comes with added service benefits not offered by others or if you offer better after-sale support.
#3. Product availability matters to your customers, make sure their favourite products are in stock
High product availability attracts customers. But, low availability can result in lost sales and low customer retention.
The McKinsey study revealed that most people turned to online shopping for alcohol, snacks, personal care products, groceries, over the counter medicine and tobacco. There was a 90% – 145% growth in consumers who purchased these products online. Early during the pandemic, some essential products were not available at physical retail outlets, forcing consumers to go online.
When your brand has continuously low product availability, your customers lose faith in you and look elsewhere.
#4. Other reasons customers switched brands during COVID: purpose, quality and hygiene
- The study also showed that 20% of consumer changed brands for purpose reasons. They wanted to support local businesses or companies that treat their customers well.
- 17% switched to other brands for better quality or brands offering natural and organic options.
- Lastly, the last group of customers (13%) switched brands in favour of a cleaner one that has better hygiene measure.
Conclusion
What can small businesses learn from the McKinsey study? The key takeaway here is that your business needs to be accessible. It needs to be responsive to customers’ needs. Consumers have a lot of options, even during a major crisis. Hence, they did not mind switching brands during COVID.
Businesses need to listen to consumers and respond accordingly. A few loyal customers may stay with your brand during hard times. But, most customers leave when they can find a better alternative elsewhere.
