Given the drastic changes that have engulfed the world in recent months, we asked Stephan Gans, SVP Chief Insights and Analytics Officer at PepsiCo and Adrian Terron, Head of Customer Centricity at Tata Group, how they are helping their companies understand consumers’ attitudes during the COVID-19 pandemic.
For a start, they have both been working from home during the lockdown and this has both positives and negatives.
Stephan Gans notes he can work highly efficiently as long as the work is within his PepsiCo team. “The challenge lies in the more cross-functional work which relies much more on interaction. It’s a matter of personal style, but for me bumping into people in an office and having spontaneous discussions is important, and you don’t bump into people or get pulled into a meeting while it’s happening on Zoom. I have my best ideas when I am thinking out loud and with others. There is really no substitute for that so I would say there is a short-term efficiency that is a benefit, but it goes at the expense of thinking outside of my functional box.”
Meanwhile Adrian Terron says that the hours gained from not having to commute to Tata’s global headquarters in Mumbai, can be used much more productively working from home. “We pivoted very quickly to digital communication, the flipside of which is that you can be connected at any time of the day at a second’s notice and when you are communicating online with groups of people it is less easy to feed off their energy than when you are in a room together.”
Impact on work
The lockdown also has changed how work is being carried out. Terron’s team used to talk to a wide swathe of customers and explore their lives but this has stopped. “What we are able to do is to have more meaningful conversations over video and the phone and whilst you can’t pick up the unspoken in terms of visual observation, the participant is devoted to talking to you as opposed to being distracted by other ambient visual stimuli, so it can be far more thoughtful.”
“The other kind of research that we have continued to invest in is trying to identify and gain an insight into the future megatrends that will continue despite the disruption into our ways of living. So, if you can mine these two and add a third level in the sense that we have done a significant amount of research on specific aspects and we have been revisiting some of that to see what part of it still applies or should be changed or retested. The methodology has moved much more to online, audio, and to adaptive technologies such as e-focus groups, WhatsApp ethnography, and online mobile surveys.”
Meanwhile at PepsiCo, all research was initially frozen for safety reasons whilst facts about the virus were still being gathered. Gans comments “We are now back to doing online research and are testing communications and innovation, but we are not currently conducting research that requires face-to-face components to keep our employees safe.
“We have commissioned a lot of additional research to help us understand what this means for how consumers are feeling, living and consuming food and beverages. We are doing more empathy research than we were originally planning for the year. And we’re using that research to produce insights and directions for our businesses and business leaders who are making decisions everyday about how to best keep the business running, or how to communicate with consumers and customers.”
Consumer shifts
Because PepsiCo and its food and beverage products have seen big channel shifts – substantial growth in e-commerce and online retailer channels, but a negative impact in away from home and foodservice channels. “We are working with a lot of our customers to help them figure out how to best re-open and build confidence with consumers to come back” says Gans. “It’s one thing for the government to say it is okay to re-open quick service restaurants or bars, but how does a food service outlet communicate that it is safe and what does it need to do for consumers to actually go there in what may be perceived as a risky situation? Part of that is understanding what the big drivers of consumption actually are and how consumers are weighing their different options between consuming at home or going out if there is anywhere to go to.”
Meanwhile, Terron notes that research is crucial at a time when peoples’ lives and views are changing so quickly, whilst underlining that not all these changes are permanent. “You have to be really mindful in distinguishing those attitudes that are actually going to change and those that consumers merely say are going to change. So, if there is ever a time to filter what consumers are saying with a sharper appreciation of behavioral science, now is the time. Even rethinking and re-evaluating insights derived from recent, relevant studies is a way of testing your assumptions of the future. Whether its neuroscience insights on the principles of storytelling, or the role of after sales service in brand choice, or using satellite imagery to estimate future demand at a catchment level, we have a lot to play with from our arsenal of insights.”
Whilst the name Tata usually conjures up cars, steel and chemicals, the company also includes consumer goods, food and beverages, hotels, power and energy, aerospace, defense solutions, digital infrastructure and consultancy. As his team sits at the group center, Terron explains that they try to understand consumers attitudes from a more general aspect as they don’t sell any particular product.
“What is of fundamental importance is understanding consumers and society-at-large, not from the objective of selling one particular product or brand. But to see how they are reacting to the situation and feeding that to our group companies who will do their own research relevant for their own categories, segments, brands, competitors and consumer and service offering.
“In a post-pandemic world, everything depends on the last mile. Consumers are interested not just in your messaging but what you can do for them in their home, in a way that matches their practical needs given how relevant proximity, security and safety are as well as urgency of delivery and last mile connectivity.
“Rather than using the home as a pit stop, it has now become a large part of people’s experience and brands that are able to attune to that despite the obstacles of a lockdown are the ones that will succeed. The good news is that brands can test at the catchment level, but it also means that they have to be very adaptive and vigilant, you can’t rest a moment in the world in which we now live.
Different research
At PepsiCo, there is a mixture of tactical research about the messaging and more strategic research to understand the shifts in consumer behavior. “There is also a lot of data analytics happening in markets where for example, the traditional trade comprises of really small outlet stores selling our products, such as in Mexico or India. Predicting which of those shops are going to be open or closed is something you can do with data analytics and this supports our field-force and operations in helping with optimization of their resources in this period,” explains Gans.
“I’m not necessarily a big fan of traditional focus groups so we’ve been driving towards doing qualitative online already for quite a while. But depending on the topic and a market’s internet access, it is not always feasible. However, right now there is zero face-to-face research – all of this is happening online.”
Meanwhile at Tata, the idea is to test and measure changes and understand what consumers are going to be like, what will persist, and what will change. Terron explains “We then recommend to our group companies, strategies in each of these scenarios because we are beginning to see cohorts emerge amongst our customers with certain dispositions and it is important to segment them by understanding how they will react in the moment as opposed to for all time to come. It’s time to use segmentation scales, to predict the future and estimate how many people will behave in a certain way.”
Terron adds that different people react to their circumstances differently, so brands need to cater foremost to people’s needs rather than approaching them in a transactional product-driven, advertising-driven manner.
“We are also talking to experts who have seen different cycles of change and trying to synthesize this with existing and new data coming in about consumers. What we see has challenged the assumptions that older consumers are less technology savvy and younger ones are less attentive. Consumers want to engage in this moment of change: for older people because they have a lot of time on their hands and more focus on themselves, the level of tech savviness has spiked dramatically because everyone is now dependent on their devices to stay in touch with the outside world, even those who might not have done so before. Equally people who are usually not attentive such as Millenials and Gen Z now want to be heard and be part of the solution; even those consumers who previously might have been hard to reach previously, have changed. People want to help and be helped so they are keeping the channels of communication open.
So, given that some of the largest cities seem to be much more affected, is different research being conducted, depending on the region? At PepsiCo, Gans notes that “In big parts of the world, consumption tends to be more concentrated in cities and as such, our business can be much more impacted in bigger cities. I know that is a very general statement, so we also look at this from a very granular level, certainly in a market like the United States as well as other major markets.”
And whilst the ESOMAR Insights in Times of COVID-19 Report estimates a 22% reduction in the overall size of the insights sector in 2020, Gans comments “I don’t think our research spend is necessarily going to contract. PepsiCo is very focused on ensuring everything we do is with the consumer at the center. Truly understanding what consumers want and need are vital, so research is always important”.
“Right now, the need for consumer-centric thinking and understanding about what this all means for people’s needs and lives, and eating and drinking habits at home or elsewhere, is arguably more acute than it’s ever been. There is a lot of established learning about consumer behavior in our categories that is suddenly in question, so I also regard this time as an opportunity for driving consumer-centricity even deeper into PepsiCo’s ways of working and culture.”
Interested in finding out more on how client organisations operate successfully in the current landscape? Join the ESOMAR Client Summit at Home broadcast 11 &18 June (ed.)
1 comment
Great article with new insights into our new world