3 December 2020
The coronavirus has and continues to affect every single industry, arguably, there are few that have been as disrupted as the retail and automotive sectors. Following various lockdown restrictions and severe fluctuations to consumer behaviour, it is unsurprising that government figures show that furloughing within the retail sector peaked at 789,000 workers and a record number of shops have closed down in the first half of 2020.
Moreover, the automotive industry has had to navigate disruptions to Chinese part exports, large scale manufacturing and assembly plants, all of which have coincided with a downshift in global consumer demand.
Clearly for businesses to effectively operate under these circumstances, customer engagement and communication have been vital. So much so that our latest research found that over a quarter of retail and automotive companies have increased their business messaging as a result of Covid-19.
When compared with pre-pandemic levels, 28.8% of retail and automotive companies confirmed they were sending more business messages to potential and existing customers and over half (56.8%) said they were sending roughly the same amount. Additionally, our data revealed that just 14.4% had reduced the number of messages, when compared to pre Covid-19 times.
The detail of this increase, split by business activity, can be found below:
- Marketing/promotional activity – 30.23%
- Appointment management – 23.26%
- Delivery information – 23.26%
- Customer service/process updates – 16.28%
- Customer satisfaction surveys – 6.98%
This data forms part of a wider research project which surveyed over 600 international companies on how Covid-19 has impacted their business communications. Overall, 38% of companies surveyed reported that their business messaging had increased when compared to pre-pandemic numbers, and just 13% said they were sending fewer messages.
Given the amount of uncertainty regarding recovery and the fact that the UK is predicted to be entering the worst recession in 300 years, retail and automotive firms have a challenging task ahead, successfully navigating recovery.
With this in mind, we have outlined three trends we predict will gain momentum into 2021 and form an important role in retail and automotive recovery.
Effective, personalised advertising
The retail and automotive sectors were already considered very competitive markets. Now that face-to-face interactions with customers are reduced for the foreseeable future, brands from all industries need to work even harder to get the attention of and engage with existing and potential customers. In order to continue attracting and interacting with target audiences, we predict that many businesses will turn to more aggressive and personalised advertising in a bid to give them an edge over competitors. In particular, we expect personalised marketing videos – which enable companies to customise video advertisements to each viewer, by including information such as their name – to play a large role in the marketing strategies of retail and automotive businesses next year.
Focus on sustainability
During the early stages of the UK’s first national lockdown, some consumers struggled to find their usual products. This led many to trade down and purchase cheaper alternatives or trade off – whereby consumers still purchase an alternative, but price is less of a consideration. Interestingly, 47% of customers identified as trading off , opted to trade their usual products, for alternatives with more environmentally friendly brands. This trend was already gaining momentum pre-pandemic but there is anecdotal evidence that the coronavirus lockdowns have inspired a higher appreciation for nature. Thus we expect sustainability will continue to be a focus for consumers and consequently retailers next year.
Furthermore, 2020 was already predicted to be the year of the electric car and there is some evidence to suggest that the electric vehicle (EV) buyer segment has not been as financially impacted as other customer segments. So we expect sales will remain relatively strong for next year despite the disruptions and continue into 2021.
Moreover, we predict businesses will aim to focus on the sustainability of their operations more generally next year. As for example, even a greater inclusion of SMS communications and reduction in emails, can have a positive impact on a business’s carbon footprint and 43% of consumers reported a preference for SMS business communications, we believe this preference will be reflected to an even greater extent in business messaging trends next year.
Prioritisation of smooth O2O experience
Unsurprisingly, during the pandemic many retailers have focused on improving their online offering, and more specifically – 69% are said to have developed new O2O routes to consumers. What’s more, not only would 41% of consumers purchase a car completely online, but this figure actually increases to 61%, when consumers are presented with a clear example of how the process works. This sentiment is further echoed in McKinsey’s latest report on the automotive sector, which advises firms to radically focus online, stating – “one US electric-vehicle maker, with established online sales offerings and contactless test-drives, increased its sales in China by over 10 percent early in the Covid-19 crisis.”
Therefore, we predict that the continued blurring of online to offline, will motivate retailers and automotive firms to investigate how they can further smooth the customer buying experience across channels.
Though the immediate future is still unclear, both the retail and automotive sectors are famed for their ability to successfully adapt to consumer demand. Clearly 2020 has presented these businesses with arguably their largest challenges to date, but for those who wish to navigate recovery, a commitment to change and flexibility is key. As concluded in the aforementioned McKinsey report – “companies that reimagine their operations will perform best in the next normal.”
If you’d like to get started with a more effective messaging strategy, please get in touch with our team on 0345 356 5758, or email firstname.lastname@example.org where we’ll direct you to one of our expert team for your industry and requirement.