COVID-19 Hasn’t Changed What People Want from Businesses
As the COVID-19 pandemic has raged, consumers in the United States and Canada have grown decidedly less optimistic about their lives and their prospects for the future. Confidence that businesses can help solve pressing social and economic problems has taken a hit as well, according to research on consumer sentiment by SAP.
That probably comes as little surprise, considering how many aspects of work and home life have dramatically changed, some perhaps permanently. Shutdowns, work furloughs, pay cuts, layoffs, and wildly contradictory advice on how to slow the spread of the disease and stay safe have all added to the anxiety.
The decline in optimism – six percentage points from January to mid-September – has come hand-in-hand with an increase in the public’s desire for government, rather than business, to take the leading role in addressing social, environmental, and economic problems.
Our initial research found that citizens are most concerned about access to healthcare and mental health services, diversity, individual rights, and poverty and hunger. As we expected, the relative rankings of these issues shifted in the follow-up surveys in response to events in society, such as long lines for food distribution centers following COVID-19-related layoffs and Black Lives Matter protests following killings of black civilians by police.
While the numbers point to public apprehension about the economy, healthcare, and social unrest, they also point to steps that companies can take to ease the situation.
Connecting consumer emotions and expectations
We began researching consumer sentiment in January 2020, prior to COVID-19, to understand how people feel about a variety of consumer and social topics.
We conducted a nationally representative survey of 10,000 individuals in the United States and Canada on topics such as their optimism about life, expectations of business leaders, and the factors driving their purchase decisions. We also asked people to describe their attitudes about more than a dozen global issues.
At the time, a large majority of consumers (68%) were hopeful about the future. We also learned that they were looking to businesses as much as individuals and their communities to take responsibility for solving social and environmental problems. Furthermore, they were factoring how a business makes an impact on the world into their purchasing decisions. When asked to name the issues most important to them, consumers chose healthcare access, mental health, diversity, individual rights, and hunger and poverty as the top five.
We followed up with weekly and biweekly surveys from late April through mid-September to track how attitudes and sentiments were evolving in light of the COVID-19 pandemic, the accompanying recession, and social unrest.
The most significant long-term findings relate to how consumers rank their top issues and whether businesses need to take positions on or speak out about those issues. As the grim news about the pandemic sank in, we saw large swings in public sentiment for several weeks. In subsequent surveys, optimism began to decline, reliance on government began to rise (with a corresponding decline in reliance on business), and purchase decisions started to align with corporate missions.
In the follow-up surveys, we also found – again, not surprisingly – that public sentiment about issues shifted along with current events. For example, people expressed the greatest interest in diversity and individual rights when incidents of police brutality were in the news or protests against it were unfolding. Over the course of the year, we tracked the largest shifts in interest for diversity (up 117%), followed by individual rights (up 33%), recycling (down 32%), income inequality (up 24%), and work-life balance (up 19%).
Consumers are less optimistic, yet more demanding
Optimism is perhaps the most succinct measure of society’s state of mind and demonstrates how individuals see the trajectory of their own lives. With many economies in a tailspin and deaths from the pandemic surpassing one million, our research found that people are feeling significantly less hopeful about the future.
In January 2020, more than two-thirds (68%) of respondents expressed a positive outlook. By May, only 62% were feeling positive about the future, and this rate has held steady since.
Meanwhile, business has lost some luster as a voice for global social change. In January, a majority of consumers (53%) said government should take the lead in solving global issues – a higher percentage than any other sector – and by May, it had risen by 8% (to 57%). During the same period, the percentage of consumers identifying businesses as important leaders on global issues declined from 44% to 40% (a 9% decrease).
This change in sentiment poses a challenge for business because people’s expectations of the companies they buy from have not changed. Specifically, individuals often incorporate their knowledge about a business’s activities into their purchasing decisions, and by doing so, they increase the impact that the businesses they support have on the world.
Meanwhile, consumers have been consistent in their expectations that companies speak out on social issues. Since January, 50% of consumers have said that businesses should always take a stance, 47% have said they should take a stance only if it relates to their business, and 3% have said they should never take a stance.
Some organizations may believe they will not significantly suffer if they don’t take a stance on important issues or do nothing to address them, but that could be a major mistake. Customer engagement is one of the greatest challenges facing organizations during the pandemic, and organizations that engage their audiences by taking action may benefit from a corresponding boost in consumer loyalty.
What consumers care about most: healthcare, mental health, diversity
Concerns about healthcare access surged in the spring with the explosion of COVID-19 cases and unemployment claims. The percentage of consumers who cited healthcare access as one of the most important issues spiked as high as 60% in mid-May before returning to around 51%, as seen in January. The reversal may be largely explained by furloughed employees returning to work and feeling more secure about retaining their health benefits or by laid-off workers finding new opportunities.
The importance of access to mental healthcare also increased during the pandemic; the highest concern level of 37% was measured in early June. Since then, the concern level has returned to 32%, as measured in January.
Meanwhile, attention to the issues of individual rights and diversity significantly spiked this spring – a likely response to news about police brutality and attention to issues of systemic racism. Twenty-five percent of people cited individual rights as a top concern in January; this rose to 40% in June during the height of the Black Lives Matter protests across the United States. Similarly, a higher percentage of consumers became concerned about diversity. In January, 15% of respondents cited it as important; in mid-May, the percentage more than doubled to 33%.
Although the percentage of consumers citing concern about both issues has since declined, the importance of these issues has remained elevated compared to January. Around 30% continue to name individual rights as a top issue while 21% name diversity as a key concern.
One issue of concern has declined in importance: climate change. In January, 41% of respondents identified it as a top concern. By June, we saw an all-time weekly low of 30% ranking it within their top five. While interest in climate change is bouncing back – up to 38% in September – the decline is meaningful.
This change does not mean that consumers no longer care about climate change. Rather, the shift in opinion reveals how much more important their other concerns have become. Still, record-setting wildfires in the western United States and a record number of tropical storms and hurricanes battering the Gulf Coast have served as constant reminders that our climate is getting warmer – and that fact can have devastating results.
Although the public now assigns relatively less responsibility to businesses for effecting change on social and economic issues, they care about what companies do. This naturally can impact how consumers interact with businesses and could ultimately lead to losses in brand loyalty, trust, and customer and employee engagement if companies are not meeting consumer expectations.
How businesses address these expectations is both a critical and delicate mission. Corporate action to better the world and society must align strategically with businesses’ historical objectives and brand images. Organizations can respond to customers’ concerns by taking a stand on social issues that they align with, by publicizing those efforts to better engage both employees and customers, and by becoming strong stewards in their community to advance diversity, individual rights, safe public health practices, and environmental responsibility.
Meanwhile, business leaders can address workers’ anxiety about newly remote work situations or about workplace safety if they are physically in the office by doing everything possible to support employees for the long haul.
Organizations also may want to revisit their benefits packages to match offerings to what their workforce says it needs most. Flexible spending accounts may be of greater value, for example, enabling each employee to spend benefit dollars on the services that best meet their family requirements. In the United States, the outcome of a Supreme Court case challenging the Affordable Care Act – a national healthcare coverage law – may influence what companies offer.
Finally, organizations need to make employee and customer engagement top priorities while responding to workers and customers with empathy and open communication. Many employees and customers will be dealing with organizations on a remote basis for the long haul – or even permanently.
The new remote workforce brings many benefits in terms of enabling flexible work schedules and greater productivity, reducing the need for physical space and expensive facilities for workers and allowing organizations to build or lease in cheaper locations.
But with millions of employees spending their workdays in front of their screens at home and having little to no face-to-face contact with coworkers, the sense of connection to the organization will be lost for many. Remote workers will need communication and collaboration tools to maintain a sense of connection and engagement. Managers will need to learn new supervisory, mentoring, and communication styles, especially if they are working remotely as well.
Companies can also address consumers’ ongoing pandemic-related concerns about health and safety; for example, to help customers get what they need without visiting physical stores, some retailers have changed how they manage their inventory to support increased demand for deliveries and curbside pickup. Some companies have adapted their products and services to help customers adjust to spending most of their leisure time at home or to help them through financial hardship. Fitness clubs are streaming online classes, and financial services companies have waived late fees and helped customers adjust the timing of payments.
Continuing investments in digital technologies can help further address consumer and employee concerns in the moment – and can provide a long-term winning strategy for retaining customer loyalty and maintaining employee satisfaction.