Incentivising consumers after a crisis.

It’s fair to say these are tough times and the new buzz word on everyone’s lips is “unprecedented”. Brands and consumers alike are having to adapt to a new, albeit temporary, way of working.

So what happens after the fog has cleared and life in the UK starts getting back to normal?

According to a study conducted in 2009 by Philippa Lally, a researcher from UCL, it takes an average of 66 days for a habit to become ingrained. So there is a very good chance that, post-corona, consumers will have formed a whole new set of habits. Promotions will be vital in incentivising consumers back to their old shopping, buying and entertainment habits.

Promotions are also a powerful tool in restoring consumer confidence at a time when budgets will be tighter than usual. 9.73 million people in the UK say they have used vouchers or coupons, with 1.628 million Standard cross platform readers saying the same. These numbers are surely set to rise as consumers become increasingly aware of the need for a bargain.

There are four key areas where promotions will be particularly crucial to recovery – travel, bars and restaurants, gyms and shopping – for leisure not loo rolls! The roadmap to beginning to reopen society will be a welcome sight for businesses but the anxiety of consumers will outlast the restrictions imposed by the government.

Travel brands will need to incentivise people back on holiday. Reassuring consumers that it is safe to fly is one concern, encouraging them to part with their hard-earned cash when some airlines and travel companies have been less than helpful at this time is another. We’ve already seen the emergence of promotions in order to entice travellers back to destinations, with Visit Sicily offering to cover half of flight costs and a third of hotel expenses for potential visitors. Will we see other tourist boards follow suit?

Bars and restaurants, set to potentially open from early July, will need to get people back through the doors at a time of year when they are less populated as people flock to outdoor spaces and al fresco drinks. Outdoor spaces have had increased importance in this time of lockdown and Emma McClarkin, the chief executive of the British Beer and Pub association has warned of social distancing measures leading to a decrease in capacity of 70%. While for many, the pub is the number one thing that we miss about a pre-virus world, according to YouGov a majority of Brits would feel uncomfortable visiting restaurants, coffee shops and pubs after the lifting of lockdown. Pubs and restaurants will have to use compelling promotions to combat these factors and get people back through the doors.

Gyms will find that people have changed their exercise habits through the lockdown. With government guidance allowing outdoor exercise throughout, bike sales are estimated to be up 15%. Gym users have become used to a new way of exercising inside (with Joe Wicks perhaps!) as well as outside. Spending money on a gym membership when budgets will be tight will feel like a real luxury so the price of a membership will need to reflect this. Will we see some gyms continue to offer “virtual” personal training sessions within the cost of their membership?

Images of empty high streets have become a stark symbol of the lockdown. Shopping districts will need to get people back and shopping for non-essential items when, according to Evening Standardresearch, 52% of people have had their income affected by the situation. Those who have retained some disposable income to spend on luxuries will have become more accustomed than ever to online shopping. Gathering the data of consumers willing to spend will be increasingly important, with GDPR lurking in the background – remember when that was grabbing headlines?! Running a competition is a feel-good way of resonating with consumers as well as a compliant way of collecting data without falling foul of GDPR. 30% of visitors have used the internet to enter a competition in the last 6 months, that’s 2.3M potential customers.

Ultimately, consumers will look favourably on brands who they feel are treating them well. Whether this is by running a competition or by giving them a little luxury at a fraction of the cost, promotions will be crucial to restoring consumer confidence and encouraging them to open their already-stretched wallets.

Source: TGI Clickstream Q4 2019

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