The rapid changes in consumer spending habits resulting from the COVID-19 pandemic have companies scrambling to understand where consumer behaviour is going next.
The classic go-to answer might rest in a series of in-person focus groups that glean data from shoppers debating whether to shift to online shopping or support their stores amid tough economic times.
“It is a futile exercise right now,” said Rival Technologies Inc. CEO Andrew Reid, referring to the prospect of bringing a research group together as health officials urge the general population to keep their distance and maintain social bubbles.
The Vancouver market research firm specializes in using chat, voice and video tools on mobile devices to gain insights into consumer behaviour.
Instead of surveys, the tools take the form of AI-powered chatbots, conversations with voice assistants or video messages.
Since the arrival of the pandemic, Rival Technologies has been ramping up hiring in everything from its engineering to consulting teams to meet demand from brands left in the dark about new consumer habits.
Reid said one-third of his business is now devoted to gathering COVID-19-specific insights while the remainder is focused on helping companies determine how to compete while consumer behaviour changes rapidly.
“What’s interesting is any data that you had pre-COVID is sort of thrown out the window,” said Reid.
The company’s social-media-era tools were originally developed to appeal to brands looking for instant feedback on events, products and services, partnering with the National Football League, Warner Bros. Entertainment Inc. and the Vancouver Canucks.
“A lot of companies use normative data, and they have these surveys that they’ve been asking, and everything’s all about this slow pattern and slow changes,” said Reid, who ran Vision Critical Communications Inc.’s (now branded as Alida as of last month) innovation lab prior to co-founding Rival in 2016.
“We’ve had this big reset, and so many brands recognize that the consumer landscape shifted, and they need fresh data and the fresh insights.”
Other brands seeking data on changes in consumer habits since the pandemic include Tyson Foods (NYSE:TSN), online gaming platform Roblox and Diageo plc (LON:DGE), the parent company of Guinness Brewery, Smirnoff and Crown Royal.
So far Rival has determined insights such as 37% of Canadian consumers have increased their online shopping during the pandemic, while 29% are drinking more alcohol compared with 19% who are drinking less.
Rival’s sister company, Reach3 Insights, also found that 52% of teens are spending the same or more time with their real-life friends playing online games or engaging in chat programs during the pandemic.
“Figuring out what the consumer is going to be doing over the next while is going to be critical,” said Craig Patterson, owner of Retail Insider Media.
“The competition has never been fiercer because this is a do-or-die moment I think for a lot of retailers … They need anything that they can get right now just to survive.”
Patterson said a shift to online sales is imperative for the many businesses that have been slow to invest in e-commerce.
Those sentiments were echoed by the Business Development Bank of Canada (BDC), which published a report in early October urging small businesses to prioritize online sales.
“Businesses have to be more present online, which is not easy for small or mid-size firms. You need to have the right strategy for the type of product or services you have for your business model,” BDC chief economist Pierre Cleroux told BIV.
“And selling online is like starting a new business because it’s different. The type of consumers online are a bit different than when they go to the store, the way of doing marketing online is quite different. So some small companies are very successful online. Others have difficulties.”
But Reid is cautioning that more changes are afoot for consumer behaviour as the potential for a widely distributed vaccine becomes more likely in the coming months.
“Regardless of the vaccine, like there’s just a bunch of patterns that are going to change here,” he said. “We’re going to go to this new normal and try to understand how to navigate that new normal. I feel like we’re in a great space because … every brand is dying to get feedback from their customers.” •