Recovery & Growth
Kantar’s Covid Barometer
The timeless and the timely
In volatile times, marry Meaningful Difference with the latest consumer intelligence
What does it mean to talk about recovery and growth in 2020? For most brand categories, the goal at hand is not necessarily a full return to normalcy by the end of the year. (Even for those product categories seeing increasing demand - for example, hand sanitizers - one could hardly describe the current business climate as normal). The reality is that COVID-19 could cycle in and out of our lives well into 2021.
Resilience, then, is the watchword of the day - and a necessary prerequisite to future growth. Resilience is not the same thing as passivity. As Brand Z™ Global Strategy Director Graham Staplehurst and BrandZ™ Global head of Research Martin Guerrieria noted in this year’s Global Top 100 report, “Brands did not recover automatically after the  financial crisis. And they will not recover automatically from this crisis. Understandably, during a period of uncertainty and financial pressure, it is tempting to cut back on advertising and marketing investment, at least short- term. But cutting back is counterproductive.”
They continue: “It may not be possible to always be physically present, [or] to have certain products available all the time. People are becoming accustomed to shortages. Mental availability is possible, however, and it is critical. Brands that continue to advertise reduce the risk of future market share loss. If it is necessary to reduce a product range because of slackening demand, then it is best to focus on the parts of the range that best represent the core brand purpose and do not compromise core positioning and values. It is important to focus on salience, reach, search, distribution and pricing.”
The global financial crisis offered countless examples of this resilient philosophy in action. In India, the detergent brand Fairy increased its market share from 52 percent in 2008 to 61 percent in 2013 - all the while increasing consumer perceptions that the brand represented a “very good value for money” (which is a key to being able to charge a brand premium). How did Fairy accomplish this? By identifying the brand’s Meaningful Difference around the theme of “Enduring Care,” and reminding people of this brand legacy in a well-crafted, well-supported campaign.
Brands, therefore, should remember the lessons of the recent past: that Meaningfully Different brands decline less in value, and recover quicker, than brands that fail to invest in these attributes.
But brands also need a deep understanding of the present. Kantar’s Covid Barometer - India paints a picture of consumer sentiment that’s constantly shifting alongside conditions on the ground:
For instance, the data shows up-and-down urban consumer enthusiasm for online shopping during the pandemic, especially early on, when online platforms struggled to keep items in stock. By early June, however, delivery had become more reliable. That month, 45 percent of urban consumers surveyed said they expected to shop more online over the following month. They showed particularly strong interest in online shopping for personal sanitizers, home sanitizers, groceries, and health and nutrition supplements. (Personal care products, however, lagged somewhat behind.)
By early June, 65 percent of shoppers surveyed said they were paying increased attention to prices, across all categories. Similar proportions of consumers said that they were making more “shopping lists” versus buying things impulsively. Some 93 percent of those surveyed reported that the COVID-19 crisis had already made an impact on their household income.
Under these conditions, clear - but ever-evolving - preferences have emerged around what consumers want from the brands in their life. In June 2020, for instance, 54 percent of Indian consumers said they expected brands to “be practical and realistic” while providing everyday help to consumers; a quarter of consumers, meanwhile, thought brands should be “attacking the crisis and demonstrating that it can be fought.”
The correct approach for brands in the coming year, then, be to combine the timeless with the timely. Meaningful Difference will always be the key ingredient for recovery and growth in times of crisis. But when deciding how to emphasize Meaningful Difference, brands will need to draw upon the latest consumer intelligence to chart their tactical path ahead. That’s where like the COVID-19 Barometer will prove crucial.
Spotlight on Health and Hygiene
Spending to Stay Well
It doesn’t take a retail expert to that health and hygiene products a surge of interest during a global pandemic. Especially when these two categories were already on the upswing heading into 2020. The hygiene product segment, for instance - comprising skin cleansing, bathroom cleaners, shampoo, floor cleaners, and hand sanitizers - had already posted 15 percent value growth between February 2018 and February 2020.
But Kantar data from March 2020 onward shows just how strong growth in these segments has been. In the 14 weeks preceding 1 June 2020, for instance, an average of 2.70 lakh households per week became “new triers” in the Hand Wash category. Growth in the Hand Sanitizer category was nearly as strong, bolstered by the introduction of more than 350 new sanitizer brands between March and May of this year.
Though it’s easy to consider hygiene products as purely functional offerings, that has not been the case during lockdown. Instead, hygiene brands have become emotional bulwarks of reassurance and protection. Some of the most resonant marketing campaigns of 2020 have come from soap brands: from Lifebuoy’s exhortation to “Please use any soap nearest to you. Not just Lifebuoy”; to an arresting Savlon television spot that used military sound effects to tie the pump of a soap dispenser to the “war” against coronavirus.
Going beyond pure hygiene plays, consumer interest in the wider world of health products has been just as notable during the pandemic - if somewhat harder to pin down, due to the range of products in this space. What is a “health product” these days? How is the average Indian thinking about “Health” in 2020 - and how might it carry over in the years to come?
Some hints about where health in India is headed: According to the Kantar COVID-19 Barometer - India in June 2020, some 68 percent of Indians said they were likely to maintain healthy eating behaviors once lockdown was over. 63 percent said they were likely to maintain “increased overall hygiene,” while 54 percent said they planned to maintain “focusing on their personal development.”
Mental health has become increasingly linked to physical wellbeing. When surveyed in June 2020 about what they were doing to manage their mental health, 60 percent of Indians said they were “trying to exercise more, while 53 percent said they were “trying to meditate and/or practice mindfulness.”
The biggest theme in health and wellness at the moment, however, is protection: from external protection in the form of scrubs and sanitizers, to internal protection in the form of immune-boosting food, drinks, and supplements. Three-quarters of Indians surveyed by Kantar have expressed a preference for immune booster products in the post-COVID-19 scenario. A product category like Adult Wellness Drinks (e.g. Ensure, Horlicks Active) which was already increasing year-to-year in the pre-pandemic period, has seen even higher sales from March 2020 onward. But so too has a more traditional, Ayurvedically based category like Chyawanprash. After declining category sales in urban India from 2017 to 2019, Chyawanprash sales for March-April-May 2020 were up 66 percent from the same period a year before.
Also notable are the ways that a variety of non-FMCG brands have been able to associate themselves with health and hygiene. A cleaning appliance brand like Dyson has been able to reposition itself in the Indian market as a health-first brand by emphasizing the hygienic benefits of its vacuums, fans, and air purifiers; personal automobiles have gained a new advantage as the “healthier alternative” to ride-sharing, taxis, planes, and trains; some hotels have pivoted to becoming 5-star, ultraclean laundry service providers; and even a pizza delivery brand like Domino’s has a credible claim to being in the health-first vanguard after moving quickly to implement strict new standards for “contactless delivery.”
There are some risks tied to “pivoting towards health.” For starters, is always a chance that a brand will be seen as overpromising and underdelivering on their health claims. This, perhaps, is survivable.
More damaging would be the perception that a brand has knowingly made false medical claims for profit - or has otherwise unscrupulously taken advantage of people’s health fears at a time of crisis. Brands selling products with “immunity boosting” effects will need to be especially careful in this regard, as sometimes ad copy can verge on the border of making (potentially disprovable) medical claims.
On the whole, however, brands are meeting the need for increased health products with appropriate gravity and haste.
Fewer trips and a focus of “the essentials”: Shopping dynamics in post-lockdown India
The COVID-19 pandemic has created a new mood of frugality - and with it, a consumer shift towards prioritizing products seen as “essential.” But what types of goods typically qualify as such – and conversely, which categories will Indian consumers delay purchasing until later in the country’s recovery period? Kantar’s COVID-19 Barometer has been tracking aggregate shifts in the “recovery horizons” for major consumer categories. While individual consumer behavior may vary, in early June 2020, the overall category picture looked like this:
Not surprisingly, personal and home hygiene products ranked high on the list of categories consumers reported they planned to “spend more on.” But interestingly, so too did OTT Subscriptions, a category that scarcely existed a few years ago. Financial Investments, a category that in May 2020 had ranked in the “Middle Recovery” Group, has also come to be seen as a priority. Results like these confirm that consumer perceptions of what is “essential” extends beyond basic physical needs, and can subject to revision and reevaluation over time.
For now, it appears as if most Indian consumers are drawing a line between “necessities” and “indulgences,” and delaying purchases of the latter. For instance, while Personal Grooming products are primed for “Immediate Recovery,” Cosmetics falls under the “Mid-term Recovery” umbrella. Similarly, Food Essentials are immediate buys, while Confectionary purchasing has been delayed. For most consumers, perceived luxury categories such Vehicles and Jewelry will be the longest-delayed purchases, alongside categories seen as holding elevated safety risks (for instance, Taxis and Travel).
In the near term, when Indians are shopping - mostly for perceived FMCG “essentials” - they are doing in new or changed ways. One dimension of consumer change - an increased preference for local brands - has already been discussed in this report. Another change lies in the size and frequency of consumer purchases. In the years prior to 2020, there existed a clear trend toward consumers making more, smaller store runs for FMCG products. Kantar’s shopper data shows that has reversed: for safety reasons, consumers are opting for fewer, more consolidated shopping occasions. During these consolidated occasions, they are buying a higher volume of goods, and spending somewhat more money than they would have during their smaller, more frequent pre-pandemic shopping trips. Indian consumers are now especially keen on product formats that offer larger packs at an affordable price - both because they are spending (much) more time at home consuming products alongside family members, and because they are looking for perceived financial value wherever they can find it. This represents a reversal of the consumer trend towards smaller, more personal, and more “on the go” FMCG package sizes.
Time - and the data - will tell if this behavior reverts back to “normal” after the pandemic recedes. Consumer surveys will be essential toward guiding FMCG brand strategy and messaging. If households begin to increase their trip frequency - buying less each time, but shopping more overall - brands can resume their pre-pandemic price laddering strategizes geared toward increasing “premium” and “on the go” formats. If households stick to their reduced trip frequencies, however, brands should consider emphasizing larger SKUs, as well as value-driven promo offers and “bundling packs.”