What will the new normal look like? This is the burning question right now. We all know things are not going to be the same as they were two months ago. The level of change and disruption all around us is redefining societal norms, social expectations and consumer needs and expectations. Surprises abound. One is the level of digital transformation that the pandemic has forced many businesses and individuals of all ages to accept. From preschoolers who are learning online to elderly people who are conducting telehealth visits, COVID-19 has provided the push that many people needed to embrace technology. The subsequent impact has been enormous - changes in consumer habits, reprioritized needs and wants, evolved perceptions and sentiments on all levels.
As Scott Baker, an associate professor of finance at the Kellogg School states in a recent research paper, “This is a very different sort of recession than previous recessions. Where previous recessions have been characterized by a shortfall in demand, here it’s more of a shortfall in supply...it’ll be interesting to see where people spend this month. If this goes on for months and people change their spending habits, this really has the potential to change the economic landscape for firms.”
Some businesses are thriving. Some are shifting to newfound opportunities, addressed in an earlier blog. Many unfortunately, are failing. Those that leverage data to make decisions are in a better place. In fact, recent studies show that although overall global IT spending is set to decline by 2.7% in 2020 as a result of the pandemic, 46% of IT leaders surveyed are planning to increase investments in data and analytics for enhanced consumer insights. This reflects a projected 31.4% CAGR calculated by IDC for cognitive/AI software platforms.
Advanced analytics surfacing early signals
Data and analytics platforms are able to surface early signals that are critical for both strategic and tactical planning. As depicted in the hype cycle curve below, these early signals can be grouped into 3 phenomena that are occurring simultaneously at this stage of the pandemic – getting back to normal life, trends that are emerging, and accelerated transformation.
1. Getting back to normal. A Google search on the term “states reopening” yields more than 205M results. Of course, no one knows what that exactly means for the US economy or for consumer demand around key areas. Will consumers return to in-store shopping or will the Instacart era continue to flourish. (Side note: Instacart has reported profitability for the first time in its 8 year history. Is this sustainable?) Will consumers look only towards essentials as their way of buying or will buying habits change for the long run.
For example, the Signals Analytics platform shows consumer preferences for keto have plummeted, yet immune health is a number one priority. So what does healthy eating mean now? Are we going to experience diets in the same way? What messages, benefits and product attributes are consumers associating with healthy eating today? Are there products on the market that address those needs or is there a white space opportunity to create something new? On the product side, a company’s portfolio may have to adjust to these new trends, either with new assortments or with new ingredients. Marketing changes as well. Consumers may be buying on different channels, messaging and creative may have to adapt.
2. Emerging trends. The move to remote learning, telemedicine and working from home is changing consumer preferences. The top triggers for grab-and-go don’t exist anymore but what will replace them. Up until recently meal kits were experiencing consumer fatigue, but in the early days of the pandemic, it became clear that they will experience a resurgence. In fact, on March 18, when the stock market had to halt trading for a while, Blue Apron shares were up 140 percent in midday trading. Given the higher cost and the novelty aspect of it, it is not clear if this will be a short-lived bonanza or a sustained long-term trend.
3. Accelerated transformation. There are whole new segments of the population that have now been introduced to digital ways of life, as stated before. With older people buying online, and previously underserved communities being given access to internet and laptop and tablets to work or learn from home, retailers and brands have a much broader demographic to target online. This upends the product mix that is offered and the channels and messages by which to reach them. What are those opportunities? How are different brands capitalizing on them? What are ways to stand out?
By connecting a wide range of data sources, advanced analytics platforms can help answer these very detailed questions.
Connecting countless rich sources to yield valuable market intelligence
Most companies attempt to manage analytics either by building their own platform, developing expensive home-grown solutions that need to be maintained. In a world of structured, internal data, this may be achievable, but in dealing with external data which is where the answers to the above questions can be found, it is a much harder task. Relying on social media alone will only yield consumer sentiment that may or may not reflect the overall market trend. Connecting sources like product listings, product reviews, signals of innovation, sales data, pricing data, business updates, and more, provides the holistic picture that business leaders are looking for to navigate the pandemic’s exit. Mapping these trends and phenomena on a hype cycle curve helps to make better and safer bets and get to more solid ground.
To learn how to apply the above approach in your business with advanced analytics, click here.