Introduction
The coronavirus (COVID-19) has had devastating effects on most businesses while some have recorded success due to changes in consumer purchasing behavior. Tesco is among those businesses that witnessed revenue growth, which highlighted a shift in demand patterns (BBC, 2020; Armitage, 2020). However, the growth was accompanied by critical changes as observed by the company’s chief financial officer (CFO), who stated that Tesco has changed more during the pandemic than it has over the last decade. As result, the question that lingers is this means to the approach to marketing in the future. The scope of this question includes the marketing practices during and post-COVID-19 and the changes that will be necessary to maintain a competitive edge. Some of the shifts include an increase in online purchases, consumer demand for value, and the necessity to maintain loyalty. These changes set the objectives for marketing practices for Tesco
Background
The emergence of the COVID-19 pandemic presented the world and businesses with an environment that has hardly ever been witnessed. The nature of the virus in terms of how it was transmitted resulted in strict responses by governments across the world. In many cases, restricted movement and social distancing meant that people were forced to isolate themselves. Such requirements implied that businesses had to close down to comply with government directives with the focus being on preventing further spread. The effects of such measures meant that lots of people lost their jobs. Statistics from such countries as the United States showed that an estimated 6.2 million either did not work at all or worked less in 2021 due to business closure (U.S. Bureau of Labor Statistics, 2021). In an executive report by McKinsey, the main observation made was that the pandemic has gone from being an emergency to become a fact of life (Craven et al., 2022). This means that people and businesses have adjusted and their efforts to overcome the crisis have led to the creation of a new norm.
The new norm covers such aspects as to how firms do business and how consumers purchase their products and services. For marketers, the main concern is how such trends affect consumer behavior, which in turn influences the marketing practices of a company. During the pandemic, food purchases rose significantly alongside other major consumer goods, which caused a change in food price indexes (Mead et al., 2020; Skinner and Sweetland, 2021, p. 8). For instance, sanitation products may have recorded a significant rise in demand due to their role in fighting against the pandemic (Barnes, 2021). While the changes in demand and supply for such products would interest marketers, more long-term changes and trends could offer greater competitive edges, for example, as many people became homebound, online shopping rose significantly, a trend that is more likely to persist post-COVID-19 (UNCTAD, 2020). According to a United Nations (UN) survey, global e-commerce has jumped to $26.7 trillion as a result of COVID-19 (UN, 2021). These changes are some of those that Tesco’s CFO hinted at by stating that the company changed more during the pandemic than in the last 10 years.
The most important point for marketers to note is that some of the changes that took place during the pandemic are likely to last forever. Besides accelerated digital adoption, the demand patterns have also changed, at least for specific products Kohli et al. (2020). Marketers are often concerned with improving the shopping experience and building loyalty through satisfaction. The main question that lingers is how marketers look to achieve these objectives and what approaches will work best. In this case, one major observation is that online shopping will become a new norm, and marketers will have to learn to conduct their functions on the online platforms. According to Lingqvist et al. (2021), other changes with strategic implications include shifts in brand loyalty, declined new product introductions, and remote working. These will affect how businesses relate and interact with their consumers, meaning that some businesses will need to overhaul their marketing approaches.
Academic Frameworks
To answer the question by Tesco’s CFO on what pressures the changes bring to approaches to marketing, this research will draw on the theoretical and conceptual frameworks on consumer behavior. According to White (2019), consumer behavior affects marketing approaches and strategies since the work of a marketer is to determine what the consumers need, what they think about, and how they spend their time and money. Therefore, theories and practical implications of consumer behavior are considered to be the starting point in addressing the question since the approaches to marketing will depend on the changes in consumer behavior.
Direction
The direction of this paper is moving towards understanding the recent trends in consumer behavior as a result of the COVID-19 pandemic. Additionally, the research will identify those trends that will likely persist post-COVID-19 and their implications on marketing. The rationale is that the marketing function seeks to achieve certain common goals and that only the approaching to doing so change. Whether online or physical locations, the marketer will be seeking to achieve customer satisfaction, loyalty, and improved experience. How to achieve such goals on a different platform or environment is the question that will be answered in this research.
Literature Review
The focus of this literature review is to discuss the core themes associated with the research question and explore the evidence used to support the arguments. As illustrated in the background and research direction, the main concern for marketers is how to respond to the changes in consumer behavior as a result of the COVID-19 pandemic. Therefore, the two central themes explored in this section are the effects of the pandemic on consumer behavior and the marketing approaches and practices to respond to these changes. In terms of the evidence, scholarly materials, comprising peer-reviewed journal articles, will be used. these materials are selected based on what content they present regarding the research subject.
COVID-19 and Consumer Behavior
Consumption is a key economic activity, which is simply the other side of production. Companies produce goods and services for customers to consume, which makes the two functions part of the same equation. For the last few decades, consumption has come under scrutiny due to the role it plays in such aspects as climate change and global warming. The term consumer behavior, as used in marketing literature, entails how customers make purchasing decisions regarding what and from whom to buy (Orîndaru et al., 2021, p. 5). These decisions are based on the needs of the buyers, but marketers can lure customers by offering further advantages beyond the basic utility of the products and services. Additionally, external environmental events can change consumer behavior as new needs emerge and the nature of economic activities changes. One such factor is crises, with the COVID-19 being a perfect example of such incidences influencing how buyers make their decisions. In this case, COVID-19 resulted in limited economic activity as businesses closed, people got fired, and companies could not reach consumers (Stanciu et al., 2020, p. 7). E-commerce developed rapidly to provide a new avenue for consumption.
Several scholars have set out to explore what the COVID-19 means for consumer behavior. Among the key lessons identified by Hesham, Riadh, and Sihem (2021, p. 3) is that the attitudes and risk perceptions towards the pandemic changed consumer behavior. Due to the nature of the virus and its transmission, people sought to reduce the perceived risk by limiting their visits to shops. Additionally, the loss of jobs and the price dynamics meant that many consumers had to stick to purchasing the basic or essential items. As a result, more purchasing traffic was redirected to online platforms. The retail sector arguably directly experiences these shifts since they have direct contact with the consumers. The retail sector is where much of the consumption takes place since manufacturers use these channels to reach buyers. A study focusing on the retail sector has been presented by Sayyida et al. (2021, p. 79), who established that the COVID-19 has forced customers to avoid making face-to-face contact with marketers. The shift towards online shopping is the most notable change in consumer behavior.
Consumer behavior can be observed across four levels or omnichannel, each of which represents how consumers interact with the marketers. According to Sayyida et al. (2021, p. 79), the four omnichannel are webrooming, showrooming, pure offline, and pure online shopping. Pure offline shopping represents the use of traditional media for shopping processes. Online shopping utilizes digital media to conduct purchases, which means that buyers and sellers interact through e-commerce platforms. Consumer behaviors across these two omnichannel are of particular interest to scholars considering that most of the changes observed during the pandemic involved shifting from offline to online. With shopping restricted through the ban on movements and physical contact, it can be argued that consumers decided to take advantage of the available alternative to buying. It is important to acknowledge that this shift has only been possible due to the technological advances witnessed in the past few decades. Rather than worrying about how to get consumers to embrace the new channels, marketers have been forced to think about how to accommodate the new trends involving a drastic shift from physical stores to e-commerce platforms.
Since online shopping is one of the most notable changes, many scholars have studied how the pandemic has pushed customers online. In this case, it is important to acknowledge that the transition to e-commerce has been a gradual evolutionary process that has increasingly become a precondition for survival. With the pandemic, this reality set in when the physical stores could not operate due to government regulations limiting both movement and contact. According to Pollak et al. (2022), the emergence of the COVID-19 raises the question of what happens when the market circumstances change in shock and both sides of the market successfully adapt to these changes. This question can be answered by considering the shifts from purely offline to pure online shopping. Without the marketers’ ability to implement the changes and successfully adopt the e-commerce platforms, the buyers could not have been able to shop online. Therefore, the increasing e-commerce transactions could be used as evidence of the fact that both sides of the market have adapted to the disruptions caused by COVID-19. This also means that both marketers and consumers are once again operating on the same level.
The modern business world comprises a few large enterprises where consumers flock to do their shopping. Apart from Amazon and a few other pure online retailers, the global economy is dominated by the brick and motor business models with few managing to offer both physical and digital outlets. A study by 1450 Bhatti et al. (2020) established that 52% of the consumers who shop in these traditional firms have avoided going shopping in these enterprises since they are usually crowded. Other crowded areas have also been avoided altogether, which means that the change is part of a broader shift in human interactions within society. as a result, these consumers have joined those who already preferred online shopping to physical visits to the stores. Across the world, the large and dominant retailers with online outlets have thus recorded a massive growth in sales volumes. For example, the largest e-tailer, Amazon, recorded sales volumes of up to $4059 million, followed by such online platforms as eBay and Rakuten at $1227 and &404 million respectively (Bhatti et al., 2020). These figures indicate the sudden growth of online shopping due to COVID-19.
It is important to acknowledge that different crises have different implications for consumer behavior. In this case, the COVID-19 pandemic was unique in the sense that the demand patterns also changed in preference toward certain products. In the case study of Romania presented by Stanciu et al. (2020, p. 7), the shift towards online shopping was due to the recommendations of keeping social distance. A crisis of a different nature would have had different effects depending on what aspect of human life is affected. For COVID-19, the health of the general public was in question, which means that consumer behavior changed to account for the need to remain healthy or avoid contracting the virus. Stanciu et al. (2020, p. 7) also explain that in addition to online shopping, there was also a change in the demand for long-life food products, which were preferred to the perishable ones. The rationale for this observation is also the social distancing whereby since customers need to buy in bulk, only lasting products are viable. Online shopping also does not guarantee that the products delivered will be fresh upon delivery.
Another aspect to acknowledge is that the changes in consumer behavior were customer-led as opposed to industry-led. Due to the massive campaigns and sensitization by governments and other bodies, consumers have been made aware of the risks borne by the pandemic (Helisz et al., 2021, p. 403). Therefore, it is the consumers themselves that have developed the initiatives in their consumption behaviors as they strive to meet their needs. Contact with other people was the main mode of transmission, which means that distance from others was deemed the safest intervention. However, consumers had to purchase goods for their daily use, especially food and sanitation. Additionally, the knowledge of the online shopping alternatives meant that there was only one direction for customers to head. Additionally, marketers may have played a critical role in popularizing online shopping even before the pandemic. The great success of such brands as Amazon and eBay meant that consumers who previously shopped at the stores could not hesitate to try the online experience. Most businesses had to promise their consumers that they can deliver online, which could have prevented the loss of market share.
As mentioned earlier, digitization has taken place in a gradual process, which means that consumers were slowly getting used to online shopping. However, the pandemic facilitated a fast-tracking of those businesses that had not fully digitized and those that lacked effective online shopping platforms. As a consumer-led shift, companies have been forced to undertake rapid digital transformation to avoid losing to competitors (Cruz-Cardenas et al., 2021, p. 1). It can be argued that the responses by businesses have been commendably swift, whereas even larger and more rigid companies displayed an astounding level of flexibility. For example, even the tourism and travel sector started implementing virtual reality as an alternative to real-life visits to destinations (Godovykh et al., 2022, p. 266). The key ingredient that has facilitated these responses is the availability of the relevant technologies and the willingness of the consumers to embrace them. For example, virtual reality has been popular in gaming, theme parks, and movies, while the tourism industry also used the technology before the pandemic. Therefore, the pandemic has only served to popularize digital alternatives to consumers in need of replacements.
While changes in consumer behavior are in response to the external environment, some scholars have illustrated how internal elements can play a critical role. According to Di Crosta et al. (2021, p. 1), psychological factors observed during the VOCID-19 pandemic facilitated the change in consumer behavior. depression and anxiety were critical in the consumption of necessities versus non-necessities. Additionally, the rise in demand for sanitation and food products was the result of perceived economic stability, personality traits, and self-justification for purchasing. Overall, marketing literature has established that the actual needs and feelings of the consumers are influenced by psychological factors. In this case, the preference for online shopping can be considered to be a psychological issue since the consumers convince themselves that it is safer than vising crowded stores. Additionally, a sense of insecurity and the fear of the pandemic meant that consumption of non-necessities is reduced and expenditure on such necessities as food and sanitation is raised considerably. Regardless of the cause of the changes, marketers have to be sure to always meet the needs since it is the only way to remain relevant in a highly volatile business environment.
Now that the major changes have been identified, another question that scholars have decided to answer is whether these changes are temporary or permanent. The need to address this question is that marketers need to understand the trends to formulate the right approaches and strategies. Therefore, habits that will die will require short-term solutions while those that will persist will require long-term approaches. According to Sheth (2020, p. 280), the consumers are learning new and improvising habits, most of which will persist post-COVID-19 due to their benefits to the consumer. For instance, those who had not embraced online shopping will have learned the advantages involved and will be less likely to revert to physical store visits. However, this might not work for all industries considering that some businesses, especially those that offer services, require more personalization where no level of digitization will produce the output of an expert. Overall, some of the habits can be expected to form part of the marketers’ longer-term objectives.
As mentioned above, the need to determine permanent and transient is the post-COVID-19 period where either new norms will be formed or old habits will resume. Additionally, it has been expressed that changes in demand patterns and omnichannel forces marketers to respond. As explained by Mehta, Saxena, and Purohit (2020, p. 8), some of the changes will be temporary since they are intended to cover the short-term changes. For example, ready-to-eat food delivery companies switched overnight to such products as groceries, vegetables, and fruits. These items were in high demand, sometimes the demand was larger than the company’s normal products. After the pandemic, consumers are expected to start ordering their food normally and the producers of groceries and fruits will resume their operations. However, some of these services could persist, and it can be argued that only a further observation could determine the real outcomes in this regard. The main idea is that the changes in consumer behavior are either permanent or temporary, and both categories will have different implications for marketing.
Marketing Approaches and Practices
Marketing approaches and practices comprise a secondary theme that forms part of the dependent variables. In other words, this theme is explored due to its relation to the changes in consumer behavior. The literature review on consumer behavior has revealed that shifts in omnichannel and demand patterns are the major changes observed. Additionally, some of the changes are expected to be temporary while the rest are permanent. Therefore, the question that follows is how to approach marketing in the face of these changes. Marketing in the era of COVID-19 is a subject that has also attracted scholarly attention since experts have made a similar observation to Tesco’s CEO regarding the changes in business models and practices. Some of the major factors for marketers to consider include that customers now desire to be more connected, they believe in healthy living and have reinvented shopping (Hoekstra and Leeflang, 2020, p. 251). Shifting market frontiers are also observed as cities reach saturation and suburban areas become more preferable for consumers due to the possibility of maintaining social distances. In this case, marketers are expected to follow their customers.
It is important to acknowledge that approaches to marketing as a result of the pandemic are a subject that is not directly addressed in the current literature. Different scholars have focused on specific elements of marketing and how the practitioners have looked to respond to the customer-led changes. According to He and Harris (2020, p. 176), corporate social responsibility (CSR) and marketing philosophy have been significantly affected by COVID-19. These scholars also recommend that the changes taking place are evidence that marketers need to adopt more genuine CSR initiatives and contribute towards addressing the urgent environmental and social challenges. Ethical decision-making by marketers is also recommended as one of the new strategic marketing efforts by companies. The rationale is that crises and pandemics tend to disrupt entire economies causing diminished purchasing power and production capacities. Businesses that are genuine in their CSR would be expected to help society overcome the pandemic. As for marketers, such an effort can be perceived as a marketing strategy that allows the company to create a positive image within the consumer base.
Marketers have also been required to change their marketing channels due to the shifts in consumer demand. Research by Mason, Narcum, and Mason (2021, p. 1) reveals that social media is increasingly becoming important since consumers use it as a decision-making tool. The proliferation of social networking sites means that customers can have easy and free access to product information, including direct and first-hand reviews from other buyers. With such information, the decisions to purchase can be made easier, especially with recommendations from peers. Therefore, companies with sufficient social media presence have an upper hand in contributing to the information and shaping consumer perception and attitudes toward the products. Marketers have been advised to place more emphasis on consumer social media behaviors due to their influence on intention to purchase. Social media behaviors have a direct influence on consumer behaviors, which means that marketers should be keen to utilize the platforms to pursue more favorable outcomes. Besides reviews and recommendations, product promotions also form a critical part of social media marketing.
The marketing mix is a concept used in marketing to illustrate areas that businesses focus on when marketing their products and service. The marketing mix framework also depends on consumer behavior. As explained above, the changes in market frontiers illustrate why marketing mix is an important consideration. For example, shifts from urban to suburban change the element of the place. According to Nikbin et al. (2021, p. 9), the marketing mix presents marketers with a tool that can facilitate survival in the increasingly uncertain business environment. The researchers recommend that despite the financial implications of the pandemic, businesses should not cut marketing expenses. Rather, new marketing mix practices and strategies should be developed to facilitate survival. Additionally, managers are advised not to wait for things to get back to normal but should take a proactive marketing approach. The shifts in consumer behavior mean that the current marketing mix strategies might not work. For example, promotional messages on boards in or outside the stores may be ineffective when consumers now shop online. Overall, new marketing mix strategies are a necessity.
Different industries may also respond with different marketing to the changes in consumer behaviors. A case study of the hotel industry has been presented by Jiang and Wen (2020, p. 2563), who finds that new technologies are the answer to the disruption. Artificial intelligence (AI) and robotics present marketers with alternatives to human labor and eliminate the human contact that consumers strive to avoid due to the fear of contracting the virus. New service concepts are created in this sector, which means that marketers have to develop entire models and service delivery systems. This can be likened to online shopping only that the hotels need the guests to visit, which means that robotics can make the hotels safer.
Critical Reflection
The findings from the major themes described in the section above have critical implications for practice, policy, and research. The themes have sought to address what causes the business changes, in this case, the shifts in consumer behavior. Additionally, businesses faced with changing environments are expected to respond effectively to survive. According to Arora et al. (2020), the response expected from marketers is reimagining marketing in the next normal, which implies the period after COVID-19. The rationale is that some of the changes will become permanent, which means that the marketing function will have to change to remain relevant. Some of the current trends can be projected into the future, which gives marketers adequate insights on which to base their decisions regarding the marketing approaches.
The implications for practice can be derived from the secondary theme, which described the expected responses to the changes that have been outlined. Most importantly, it has been expressed that the changes are enforced by consumers, which means that marketers have to catch up. The first implication is that marketers have to carve a pathway towards digitization since this is where the consumers are headed. The resulting scenario has been described by Arora et al. (2020) as a great digital migration where five years of adoption have been achieved in just eight weeks. This observation illustrates how rapid the change has been and how quickly a business can lose market share due to the lack of proper platforms to accommodate the digital consumer. In the next normal, the marketers can be expected to have steered their organizations toward full digitization since it is the only way to remain competitive. Statistics presented in the first theme show that some of the major online selling brands, including Amazon and eBay recorded a massive surge in the sales volumes during the pandemic. Such businesses already have developed fully-functional platforms for their consumers.
Another implication for practice involves how marketing activities are conducted after facilitating full digital transformation. One of the recommendations found in the findings is the focus on social media marketing. The ideas of Mason, Narcum, and Mason (2021, p. 1) include how social media is increasingly becoming important due to the customers’ tendency to use it as a decision-making tool. Therefore, marketers with adequate social media presence have an upper hand in contributing to the information and shaping consumer perception and attitudes toward the products. Marketers have been advised to place more emphasis on consumer social media behaviors due to their influence on intention to purchase. Social media behaviors have a direct influence on consumer behaviors, which means that marketers should be keen to utilize the platforms to pursue more favorable outcomes. Besides reviews and recommendations, product promotions also form a critical part of social media marketing. Therefore, marketers are expected to implement the necessary strategies, tools, and frameworks that can allow them to succeed in social media marketing.
Conclusion
The question posed by Tesco’s CEO has been answered by considering the changes in consumer behavior and how marketers are expected to respond. In this case, shifts in demand and omnichannel, both permanent and temporary have been observed, growing e-commerce means that marketers have to place more importance on social media marketing and building user experiences on the platforms. Marketing mix strategies, CSR, and marketing philosophy also have to change to align with the changing behaviors, both offline and online. Therefore, the approaches to marketing that needs to be adopted by businesses include digital transformation and engaging the consumers across social networking sites. These changes are majorly permanent as opposed to those involving demand.
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