How changes in customer behaviour have altered culture, the economy and the marketing and advertising industries
Some changes in customer behaviour stemming from the pandemic look permanent. We’re now seeing which adopted behaviours will be with us for the long term and how they will affect culture, the economy and the advertising industry.
The pandemic altered the long-term trend toward greater global connectedness, between consumers and business but also within and across industries.
As a result, some companies are becoming more closely connected within local markets while simultaneously becoming more deeply tied to specific media owners and more committed to brand-related choices at a global level.
Looking across the automotive, CPG, luxury, technology and telecommunications sectors, there are three common threads of shifting company activity, as a result of changes in consumer behaviour:
- Business transformation is accelerating
- Businesses are rethinking their dependence on distant markets and companies
- Marketers have opportunities to shift their advertising budgets to reflect these changes
Automotive
Automotive saw a growth of more than 10% in 2021. An argument could be made for continued investment in marketing and advertising to convert consumers at higher prices now instead of waiting for a return to ‘normalcy’. On the other hand, lingering fears of the virus could prevent consumers from relying on public transit in the near term. Therefore, the need for cars as commuter vehicles paired with ongoing low-interest rates could be enough persuasion for some to buy a vehicle.
CPG
Over the last two years, the world’s largest packaged goods companies grew by an average of nearly 5%, while the average share of revenue generated by ecommerce for CPG companies is 14%. The sector’s marketing priorities seem to be greater addressability and efficiency in its media buying. Given the continued deprecation of third-party cookies and addition of greater privacy measures, many of these marketers are eager to develop their first-party data to apply it to their digital media and television buying.
Luxury
The luxury sector saw growth of 4.5% in 2021. On a two-year average basis, the sector is growing at a mid to high single-digit, which suggests a significant amount of catch-up spending occurred over the past year. The current rate of growth still lags the sector’s pre-pandemic rate, which was reliably in the double digits although faster growth may return when consumers fully resume travel and social activities.
Technology
Technology saw nearly 5% growth in 2021. The technology sector has benefited from a pandemic-induced shift in consumer spending. It’s moved away from in-person services and experiences toward in-home work and entertainment, powered by various devices and digital services. Assessing the industry on a two-year average basis, we see historically high levels of growth; PCs and mobile handsets revenues grew by 10%, while gaming grew by an impressive 23%.
Telecommunications
Like technology, telecommunications also saw growth of nearly 5% in 2021. Many telecom companies view 2022-2023 as prime years for consumer adoption of 5G services following network launches in 2019, expansion in 2020 and a greater focus on device sales in 2021.
Across the globe this year, carriers considerably increased their numbers of 5G subscribers. Investments in 5G mirror efforts by many carriers with fixed networks to broaden the availability of access to direct fibre connections installed at the household level (known as FTTH). There is a chicken-and-egg dynamic at play. Companies will hesitate to unveil products that require 5G until consumers commit to it, and consumers will hesitate to commit until enough products are available. This could delay meaningful adoption for the foreseeable future.
Taken from: https://www.wpp.com/wpp-iq/2021/12/portraits-of-change-the-new-economy