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Why now is your chance to grow your brand

Small and mid-tier brands can benefit from changes in consumer behaviour triggered by the COVID-19 crisis. 

COVID-19 is bad for business, right? Not necessarily, say Jonathan Knowles, Richard Ettenson, Patrick Lynch and Joseph Dollens. Writing for MIT Sloan Management Review they argue that despite the challenges posed by the pandemic, the disruption of consumer spending habits presents “an unprecedented opportunity” for small and mid-tier brands (SMBs).

“In terms of purchasing behaviour, once a routine in a certain store or preference for a particular brand is established, it becomes habitual and is difficult to change.” In “normal times” it would be difficult for SMBs to disrupt these routines to challenge market leaders. But these are not normal times. Consumers are changing their purchasing behaviour – and now is the time to take advantage.


In late March, two weeks after lockdown measures were introduced in the United States, the authors surveyed 1,233 US adults, asking them about changes in their shopping behaviour and mindset.

People are purchasing products from new brands. One third of respondents declared a “willingness to try new brands” and over half said they had actually bought products from new brands. Some 85% of respondents reported having shopped in a new physical store and 76% said they had shopped in a new online store.

Product shortages, a fall in the number of status-driven purchases, a focus on function – for example, a cleaning product’s effectiveness against coronavirus – and ethical considerations such as a brand’s treatment of its employees, were all stated as reasons for this change in purchasing behaviour.

Traditionally, brands have looked to repeat purchase rate to determine a customer’s lifetime value. “A company with a 5% attrition rate will still have 77% of its original customers after five years, but one with a 15% attrition rate will have lost well over half of them.”

Customer loyalty is judged on whether a customer would delay a purchase if their preferred brand were not available. Brands don’t usually test this in practice, but “COVID-19 has set the stage for the ultimate experiment”. The result: customers are not that loyal.


“The key to success for small and mid-tier brand owners is to identify what value means to customers as they establish new purchasing routines.” To do this, focus on the four Ps of marketing: product, place, price and promotion.

1) Think solution, not just product. COVID-19 has changed consumers’ priorities. “Throughout this crisis, the brands that prove relevant to customers’ concerns about safety, security and assurance will find competitive footing.”

Pomchies, a US manufacturer of accessories like scrunchies made from swimwear fabric, now produces non-medical face masks; Hyundai has launched a version of its Hyundai Assurance programme – originally introduced in 2009 to assist those struggling financially during the financial crisis; and Beaverton Toyota, a family-owned Toyota dealership in Oregon, is offering a “no touch” repair service.

If you are operating online, make sure your products are tagged with the attributes consumers are using to search in your category. For example, “antibacterial” for cleaning products or “healthy” for food products.

2) Think access, not just place. Newspapers and social media have been filled with news of product shortages and images of empty store shelves, leading companies to focus on their supply chains and distribution capabilities to respond to demand. But the authors advise an “omnichannel perspective that includes all potential outlets and points of distribution”.

For example, the Polish Vending Association installed vending machines on the streets of Warsaw and Krakow stocked with gloves, masks and sanitiser.

3) Think value, not just price. Leading brands often rely on being able to charge a premium for their products, but in the “new economic environment” brought about by COVID-19, consumers are more concerned with value than status: “In many ways, COVID-19 has levelled the competitive landscape for smaller brands.”

In the restaurant industry, many brands have cut back their takeaway menu options to the essentials and cut prices. Other brands are enticing customers with deferred payment terms and extended warranties.

4) Think education, not just promotion. If, like many companies, you have cut your media budget in response to COVID-19, it’s even more important that you strike the right tone with your marketing campaigns.

Beaverton Toyota’s “no touch” repair service provides a solution to a problem; what’s more, its marketing of it demonstrates that the company understands its customers’ current needs, and is a source of information and education on the importance of social distancing measures.

Now is your “golden opportunity to gain attention, convince new customers of your value, and turn nascent purchasing patterns for your brands into sustained postcrisis buying behaviour.”

Source Article: Growth Opportunities for Brands During the COVID-19 Crisis
Author(s): Jonathan Knowles, Richard Ettenson, Patrick Lynch and Joseph Dollens
Publisher: MIT Sloan Management Review