Brands Need To Adapt To Changing Consumer Behaviour

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Business Director and Consultant at Acceleration, David Alves, says brands seem to be merely accepting that they cannot operate as they always have been, and that is part of the problem. You can’t keep doing what isn’t working and hope for a better result. What should brands be doing right now in order to capitalise in this state of flux?

Consumers don’t think rationally, they think relatively and emotionally. They are in constant need of an anchor, a reference point for all decisions made by the brain. Daniel Kahneman, author of Thinking Fast and Slow, referenced these as System 1 and System 2 thinking. 

For several decades, psychologists have been intensely interested in these two modes of thinking. The terms were originally proposed by the psychologists Keith Stanovich and Richard West. 

  • System 1 operates automatically and quickly, with little or no effort and no sense of voluntary control (habit).
  • System 2 allocates attention to the effortful mental activities that demand it, including complex computations. The operations of System 2 are often associated with the subjective experience of agency, choice and concentration (consider).

As consumers’ priorities have shifted in their Maslow’s hierarchy, so should brands be similarly adjusting. During periods of disruption, consumers are four times more likely to switch brands due to changes to their contextual and motivational cues and habits.

Here’s a relatively simple thought experiment: 

You go to the shops.
You sanitise your hands.
You put on a face mask.
You stand in a queue to enter.
You sanitise your hands.
You select items based on necessity rather than personal preference.
You speak to someone through a Plexiglas window.
You sanitise your hands.
You wipe down your groceries.
You remove your mask. Breathe.
You drive/walk home.
You wash your hands.

More than likely, consumers will revert back to their old ways as soon as wearing masks and social distancing restrictions are lifted. The level of System 2 engagement here is so far beyond comfortable heuristics one would struggle to see habits forming going forward.

An important aspect to consider when examining matters through our two systems is context. It always matters what we are referring to. Context is hugely influential and is also hugely influenced. In Integration of Habits and Rules, Townsend and Bever state ’45% of the time we do what we do, most the time’.

The Three Ms

Most behaviours require three things to happen:

1. A moment.
2. A means (or action).
3. A motivation.

When these three things happen, habits form. A moment can be defined in the context of the behaviour and refers to cues, which activate that moment, such as: emails, people, location, etc. The means refers to diagnostic entities such as time, money and, alternatively, risk and autonomy. Motivations are somewhat obscure in nature but can be loosely defined as elements such as security, belonging and/or status. 

What is a habit?

Using the above as a framework, a habit is a behaviour that has gone into a repetitive loop and our brain goes on autopilot (System 1). Now a habit is then formed when we have three things:

1. A cue (context).
2. A behaviour (simplistically).
3. A reward (satisfaction), which keeps the loop on repeat.

Brands might mistake our System 1 thinking as brand loyalty, which is a huge danger. Here is another thought experiment to test that hypothesis: take a look at your most recent shopping list. What’s at the top? Possibly bread, milk, tea. If you are like the rest of us, your list will look exactly like that, it won’t say ‘Woolworths 90% Linseed brown’ and ‘UTH Long Life Milk cardboard cartons’. You get the picture.

The risk is that the consumer is not buying brands, but categories (bread, milk, tea). If your brand isn’t available, the consumer will simply default to their System 1 thinking (habit) and move to the next brand available. They are there for the category and not your Linseed lure, which in most cases is usually a direct competitor of the brand they usually shop for. Investment from brand owners also comes under fire as their investments into differentiating themselves and attracting consumers, even to build the category itself as well as the brand, will be for nought. 

Dear disruption 

The only thing that has the ability to break a habit, is disruption. Enter, Covid-19. Case in point, the best time to give up smoking is when you change jobs or get married. As far as disruptions go, the pandemic has been enough to disrupt so many other parts of our lives, that, unfortunately, the removal of civil liberties such as access to liquor and cigarettes in South Africa has been viewed as oppressive and not necessarily the type of disruption one could positively use to change a habit. 

Let us go back to the elements that make up a habit. Two pillars: behaviour and reward. In South Africa, the lockdown has forced many people to rethink their way of being every day. Their entire world has been disrupted and all those regular, comforting cues are no longer there. Strike 1 for lockdown. Herein lies the problem. Due to the oppressive nature of the lockdown and the extreme measures taken by the government, when there is no cue, System 2 kicks in and our auto-pilot brain and System 1 takes a back seat and we seek alternatives for satisfaction. Strike 2 for the lockdown. Additionally, with the autopilot switched off, the intrinsically linked reward changes to an alternative reward, one that could be deemed as destructive (grey market cigarettes). Strike 3. 

The lockdown has done tremendous damage to our every day routines, our habits, our lives. Consider this: what time do you wake up in the morning now? Exactly. Our regular retailers have disappeared, or at least, are a shadow of their former selves. Our usual channels have been restricted through social distancing and hygiene points for sanitation. Channel (think: context) is a hugely important factor, as many consumers have taken to e-commerce, yet another risk for brands as consumers are again more likely to switch brands when using an alternative channel to their regular in-store channel.

Restrictions around products on shelves have caused consumers to think harder (System 2) about what time to buy. Meal planning has caused consumers to be more circumspect about what they are buying due to the uncomfortable experience of having to physically enter the shopping environment and endure the many disruptions to regular habits.

Lastly, and maybe more positively, consumers have adopted a more socially-minded approach to their shopping behaviours. Gone are the panic-buying days of the early stages of lockdown. Perhaps you have even offered to shop for your elderly neighbour or family members, a behaviour linked to thinking about our own security and the needs of others.

Consumers have also taken it upon themselves to shift in interesting ways when it comes to spending habits, which have both positive and negative consequences. Here are the four changes in behaviour consumers have and will likely continue to display:

1. Clean and sober: without access to your regular artisan coffee, most consumers have simply gone cold turkey.
2. The old switch-a-roo: Blue Ribbon brown bread is fine. Your Linseed what-what loaf takes a back seat. Sorry, Linseed.
3. One for another: can’t get your favourite takeaway because the app is overloaded? Consumers are buying their ingredients and cooking from scratch. Like cave people! 

The danger for brands is obvious. If any of these become habitually easier or more rewarding, consumer preferences will be undermined, and new habits will form in their place. Behaviours will continue to change; brands need to come along for the ride.

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