Here is a thought experiment for you. Imagine what would have happened this week had supermarket shelves been stripped bare (and not replenished) by panic buying. Mass anxiety, looting and even violence would have ensued, as people switched to survival mode. The army and police would have been sent in. Rationing introduced. Civilised behaviour in our modern resource-dependent mega-cities would have been exposed as a veneer.
Businesses Are Also Essential Public Services
This tells us something fundamental about business, brands and society at a time of crisis. We learn, starkly and suddenly, that certain businesses (such as banking, food and local transportation) are also essential public services, which we had forgotten or taken for granted
Lack of Employment Can Lead to Depression (Not Just Recession)
Employment, too, changes radically. Under the neoliberal project, weak employment laws were enacted so that workers have few rights. Suddenly, workers are unemployed, especially in the cultural homeland of neoliberalism – the USA. Many are only one paycheque away from debt because over the past decade wages have stagnated. European governments have stepped in to guarantee the wages of employees and to get funds to the self-employed. Will this work? It remains to be seen. Keeping people in employment in Europe thus becomes a joint business and government goal, otherwise the inevitable recession will become a depression.
After the Crisis, the Reckoning
How businesses treat their employees during this crisis will lead to a reckoning – a very bitter one if times get hard. Spurs Football Club (among others) have already attracted opprobrium (and a Twitter storm) because they furloughed back room staff whilst paying their millionaire stars full wages. We will learn who the good guys and the bad guys are at some point in the next couple of years. Personal reputations and brands will be destroyed or enhanced.
Crisis and Behaviour Change
This crisis is already producing sharp shifts in behaviour and beliefs. Many will have to cut back and get by with much less, which will change behaviours and ideas. Here are some that are already evident.
Make Do and Mend
Crisis stirs old memories of survival and resilience – the Brits, in particular, cannot resist harking back to World War II and the experience of our grandparents. My grandmother, widowed young without a pension, had to become entrepreneurial – letting rooms to language students and hosting a doctor’s surgery in her front room. She could make tasty meals from the cheapest of ingredients and make her own clothes. “Make do and mend” was her way of life – it is coming back.
Local Businesses Versus Big E-Commerce
Local businesses are starting local delivery, which used to be commonplace before the arrival of the big supermarkets.
Direct delivery businesses, like Amazon and the big grocers will, of course, do well, but they cannot scale up quickly enough to satisfy the sudden spike in demand. Fresh food delivery requires a big investment in logistics, systems and people and this cannot just be turned on like a tap. Local shops and take-aways are filling the gap.
Revival of Communities in Cities
Mega-cities tend to dissolve the ties of community. Yet, in my part of South London, community has sprung up again – aided by the ease of linking up on platforms like WhatsApp. No government is big and capable enough to look after all its citizens. What fills the gap are local networks performing vital tasks like shopping for the elderly, delivering medicines and collecting spare food for the destitute.
Treating and Homemaking
Some behaviours are anticipatable patterns from previous recessions – like “affordable treating” as a form of escapism, manifested in all sorts of ways, like buying more chocolate or lipstick. Also, “hunkering down” – doing all those DIY tasks in your home that you have neglected. Shops have been emptied of flour as we turn to that most comforting of activities – home baking.
Technology Adoption and New Behaviours
Since the last recession (2008), technology adoption has moved forward and many people now have high speed broadband at home. New behaviours are enabled that have the attraction of costing nothing or very little. Last night we ate our evening meal at home whilst connected with four other families on a video conference app called Zoom. Grandparents are now video conferencing regularly to stay in touch with grandchildren. As I write, my wife and daughter are doing a 30-minute workout video in the kitchen by following the instructions of a free workout video on YouTube. What do you fancy learning – knitting, Spanish, vegan cooking, pilates or something else? Stuck at home, people will make the best of a bad time and learn something new – aided by free YouTube videos and inexpensive apps.
What should you do for your brand and how can we learn from previous recessions?
1. Monitor Your Customers and Create a Relevant Response
What are the changing consumer behaviours and attitudes relevant to your brand? Brief research suppliers (they will be grateful for the work) to monitor changes – such as how people are using online resources and what is being said in the media. Set up a rapid response team to develop ideas and initiatives.
2. Be Generous – the Payback Will Come Later
This is the time for generosity. Generosity is proven, by behavioural science, to breed reciprocation. It creates a kind of psychological debt that will be repaid in the future. Being seen to profiteer will create the opposite – a future backlash.
3. Pay Attention to the Fundamentals of Your Business and Life
Needs have quite suddenly become more basic – will businesses survive? Will there be enough beds for the sick? Will people have enough money to pay for food? Unilever’s CEO Alan Jope has just made the following commitments: “Free soap, sanitiser, bleach and food to the value of €100 million”; “Millions of bars of free soap to those most in need”; “500 million of cash flow relief to support livelihoods – we will do this through early payments for small and medium-sized suppliers”. It is an exemplary response.
4. When Others Go Quiet, Be Active and Communicate
Brands that keep innovating and communicating come much out stronger in the long run. Kellogg’s doubled their advertising spend during the great depression by introducing a new cereal called Rice Krispies (with a cheery “Snap”, “Crackle” and “Pop”). The company became the category leader, a position it has maintained for decades. Recession is a time when competitors go quiet and media is cheap – so, if you can afford the ad spend, you will get a disproportionate return on investment. As A.G. Lafley, former CEO of P&G, put it: “We have a philosophy and a strategy. When times are tough, you build share.” Your finance director may be keeping a tight grip on the cash. Yet you can still introduce initiatives, news and innovation. We live in news hungry times. Pret’s free coffee for health workers offer was shared widely – a classic social media driven picture story.
“Necessity is the mother of invention” was one of my grandmother’s favourite phrases – (along with “what doesn’t kill you makes you stronger” – she did not know she was mis-quoting Nietzsche). It is certainly the worst of times for many people. But if you are inventive and creative, you might just, in the long run, look back on this as the best of times.
Julian Saunders was CEO, Red Cell (a WPP creative agency) and Head of Strategy, McCann-Erickson.