The COVID pandemic disrupted routines and created heightened levels of uncertainty, which humans typically try to avoid at all costs.
Ambiguity aversion is most likely good news for brands, as customers are more likely to choose the brand they know well. Established, big brands potentially have an opportunity to thrive during this time of heightened uncertainty.
“[When shopping at big retailers], they trust they can get decent quality and they won’t pay too much. I recognise for some people, it’s convenience. There’s no surprises when you go to those places. So it’s a safe bet.”
“[Big brands] offer a product or a service that makes life easier, one way or another, or makes you feel better.”
Local business will need to build familiarity with their brands to continue to grow post-COVID, and ensure customers know where to find their products:
“We all knew those [local] companies were actually there, we just needed a good slap in the face to remind us that they are there and available.”
The economic fallout of the pandemic potentially lowers tolerance of uncertainty, particularly related to financial risk. Price will be a big driver in purchase decisions:
“If I buy my medication that I use on an ongoing basis from my local chemist, it will be $19. Now the same piece of medication, if I go to a bigger pharmacy, will be $11. That’s an $8 mark-up on one item. It doesn’t matter how much you want to support that business, financially that’s where it becomes a pivot point. If it was a $1 or $2 cost, I wear that cost to buy local. But $8 on something that I have to have all the time, it gets too much. So I think most people, unless [they’ve] got a fair amount of discretionary, then it doesn’t matter. I think for some people there’s a price point and they just can’t sustain that.”
Even with the strong desire to support local business, brands will need to emphasise their availability and specific value to the community to grow.
Square Holes is investigating the role of brands, big and small, in a post-COVID world. Read our previous discussion series on behaviour changes during the COVID-19 crisis.