Enders Analysis/IPA report reveals new rules of engagement for marketers

The report, on the theme of ‘living with the pandemic in October 2021’, analyses the economic and structural changes relevant to consumer behaviour at this stage of the COVID-19 journey and is linked with the IPA TouchPoints data on media consumption and industry sources, to help marketers increase the relevance of their communications and better assess their channel preferences.

Key report findings:

Changing UK mobility:

• The much deeper reduction in mobility in cities, which are more reliant on public transport than suburbs and towns, is driving segments of the population to re-evaluate their urban lifestyle,
• The pandemic has created a two-tier recovery, divided between large cities which have retained income levels and accumulated savings, but have ongoing reduced mobility, and smaller cities and rural areas, which have seen a bounce back in mobility. The part reversal of WFH will, however, perk up mobility in city centres in the coming year.

Changing household incomes:

• Households able to leverage WFH for all days of the week are saving on average 25-30% of their weekly disposable income on expenditure on transportation and out of home service activities (ie services primarily for the commuter such as city gyms; hairdressers; takeaway food; cafes, etc), widening the income distribution with workers required to travel to work.
• Low-income households (the bottom 40% of the distribution), however, including essential workers required to travel to work, furloughed workers, and the unemployed, are more likely to have seen their savings fall during the pandemic, due to reduced earnings and, particularly in the case of key workers, ongoing costs of travel to work.

Changing consumer purchasing behaviour:

• The online channel allowed consumers in lockdown to supply themselves with the full panoply of goods, despite initial supply bottlenecks. Many consumers rapidly transformed their homes into offices, also expanding their capabilities to replace out of home services with in-home delights.
• There was a structural increase in the online channel, contributing 25.5% of retail sales (excluding fuels), in both July and August 2021, thanks to a doubling of food and drink sales. Comparing August 2021 with August 2019, which is the last normal pre-pandemic reading of retail sales, online food sales are up close to double over the same period, while offline food sales are down 0.9% (online food and drink sales peaked in February 2021, which marked a 145% increase from February 2019, the pre-pandemic normal).
• Benchmarked to the pre-pandemic time of normality in August 2019, when the share of online in retail stood at 18.1%, the new figure of 25.5% share attained in July and August 2021 remains a huge leap up for the online channel. This could be a new baseline for the online channel, and thus associated marketing mechanisms.
• A major trend during the past 18 months has been the wider and deeper engagement of older consumers with the online channel, mainly due to necessity during lockdowns, but also due to their exposure to pandemic risks prior to the successful vaccination campaign.
• The embrace of ecommerce by older and wealthier consumers implies an increasing need for brands to engage in an even better understanding of how online channels can drive discovery and brand-building objectives. It also explains booming expenditure of marketers generally to the online channel to encourage discovery and purchasing.
• Other implications of the structural shift to ecommerce include direct-to-consumer (D2C) marketing and distribution on the open internet, including associated advertising media, or distribution via Amazon.

Changing media consumption habits:

• During the pandemic, as a result of WFH and spending more time at home, engagement with mail was higher than ever, reaching 96% (up from 91% the year before) according to JICMAIL. The increased engagement with mail was actively recognised by consumers, with 88% of people reporting paying as much or more attention to mail during lockdown (Trinity McQueen for Royal Mail).
• The gulf between the media touchpoints of the 'young' (25-34) and those of 'older' (50+) audiences, centred on live broadcast TV, has never been larger.
• Marketers still have the opportunity to stimulate brand building in the conventional video style of TV ads.

Ongoing implications:

• Surveying consumer confidence regarding whether we will 'return to ‘normal', the majority do not expect this to be imminent, and just over a quarter of consumers are 'not sure' when their life will return to normal, according to the ONS.

Says Janet Hull OBE, IPA Director of Marketing Strategy and Executive Director IPA EffWorks: "As the evidence from this report reveals, the UK’s journey through the pandemic continues to wreak profound changes to the way people live, work, shop and consume media, with the majority of consumers expecting the old normal to be postponed for at least six months to a year, perhaps never to return. As the population continues to modify behaviours in response to changing times the onus is on marketers to use evidence-based decision-making to adjust marketing and communication strategies to stay ahead of the curve."