Value vs. Values - how will consumers respond post crisis?

As we start to emerge from the crisis, how will consumers change their shopping behaviour? We see two competing trends – 1. Value seeking; 2. Values following. But which will be more prevalent?

First, ‘value seeking’. This is the obvious one. We were already seeing depressed pricing in clothing and footwear sectors before the crisis. However, this is likely to accelerate. As consumers emerge from lockdown, many will be experiencing financial distress or worried about job security. Discretionary spend will be squeezed as a result and non-essential items such as apparel and accessories will be significantly lower down the shopping list if they make it at all. At the same time, clothing retailers have a huge pile of stock to shift, many have weak balance sheets and a need for cash, almost at any price/margin. Discounting will be rife and bargains will be everywhere. 

Second, ‘values following’. There has been a great deal of news coverage during the crisis on how retailers have dealt with the difficult decisions required to respond. This includes how employee and customer health and safety has been assured, how suppliers have been treated and how customers have been communicated with during lockdown. Those that are judged to have behaved well and made values-based decisions are likely to win in the future. Acting with authenticity and purpose, even in the midst of crisis, will leave a lasting impression on key demographic groups that will lead to longer term brand loyalty and increased customer lifetime value.

Both these trends will no doubt play a significant part in shaping consumer spending patterns post crisis. But which will be more significant? Of course, it’s impossible to tell for sure right now but one thing is certain, specific customer demographics will respond to these trends strongly, retailers need to plan for how they engage with these customers and tailor their propositions and communications accordingly. Scenario planning and proactive customer response capabilities will be vital. Being agile and responding to the ‘new normal’ fast and effectively will be the number one critical capability over the next few weeks.