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03/11/2020
Technology, Business, Society, Asia

Better Safe Than Sorry: How the COVID-19 pandemic has made consumers more risk-averse

The COVID-19 pandemic has impacted all aspects of people’s lives, disrupting both short-term plans and long-term prospects. Around the world, people have had to adapt their day-to-day routines, adopting new “normal” behaviours that require a thorough re-evaluation of the way they spend their time, energy, and money.

This is especially true in Southeast Asian economies, where the use of innovative devices, platforms, and services has allowed new consumption patterns to emerge despite overall economic slowdown. And as consumers’ needs, habits, priorities, and preferences evolve, so do the market dynamics that they drive.

What are some of the key trends observed in the region? And how can businesses leverage this knowledge to stay ahead of competitors?

To answer these questions, Blackbox Research, Toluna, and Archetype have published Into The Light, an in-depth study that reveals the emerging patterns, trends, and dynamics across six key ASEAN markets – Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam.

This article is the third in a series of blog posts devoted to examining some of the major findings and implications of the study. It focuses on how the COVID-19 crisis has pushed consumers to actively prioritise safety when making purchasing decisions.

Click here to read the first instalment on consumers’ rising preference for local brands, and here to read the second article on consumers’ growing appetite for fun, uplifting entertainment across social channels.

From prevention to anxiety

Amongst the biggest exhortations from governments around the region – even as cases started to stabilise around June – was the need to avoid complacency and prevent a second wave of infections. 

From online movements to offline campaigns, the constant bombardment of safety-first messages created some apprehension in the population – making people anxious about a gradual but sustainable return to pre-pandemic normalcy. 

According to the data collected, more than half of respondents (54%) say they will only start dining out again once they feel it is safe to do so again – despite a wide recognition that it is one of the most common and enjoyable activities they miss. Residents in the Philippines are more apprehensive, with more than a third (37%) only willing to eat out after a vaccine for COVID-19 is made available.

Likewise, up to a third of respondents (33%) in the Philippines say they are not comfortable heading to malls until a vaccine is ready – despite shopping ranking highly in the list of activities consumers look forward to. Even in mall-saturated Singapore, where strict tracing and detection measures are enforced, 51% of respondents say they would only shop in malls when they feel it is safe to do so again.

Good business for insurers

This safety-first environment represents a great opportunity for the insurance industry, which is repositioning and expanding its offerings to meet new socio-economic dynamics.

Around a quarter (26%) of ASEAN consumers feel they are adequately covered but are still open to buying more insurance protection. Crucially, 15% feel they are not adequately covered at present and are in the market for better, more comprehensive coverage.

This suggests that around four in ten ASEAN consumers are effectively in play for insurers offering health coverage. It comes as no surprise then, that the insurance sector has bucked the economic malaise, with increased demand for term insurance and other protection-related plans. 

Embedding safety in the customer experience

The opportunity exists for other, non-insurance businesses. Indeed, there is a pronounced psychological need for health and safety products that brands can leverage in the customer experiences they develop.

For example, quick, contactless operations have become a top priority for consumers – no matter the product, brand, or mode of purchase. In the case of in-store purchases, contactless payments have become the preferred mode of payment (for both cashiers and customers). Other micro-changes in the customer experience include leave-at-doorstep deliveries, specific timeslots for at-risk populations to shop, and restaurants adopting drive-through only policies in high-risk areas.

These initiatives show that many companies acknowledge the importance of sustaining their activities while addressing customers’ rising health and safety concerns, and have found innovative ways to adapt. It is safe to assume that many consumers will grow accustomed to this new contactless world, and will likely not rush back to high-touch commerce and crowded stores even when health officials deem it safe.

Marketing in a stay-home world

Of course, this has implications for marketing and the media mix. If people are not going out as often as they did before, does this make certain media channels like out-of-home (OOH) less important or necessary?

The lockdowns have drastically decreased rush-hour traffic, and with people staying at home more, making it their HQ for work and play, and spending more time on social media (and spending more money on e-commerce platforms), is any channel that cannot directly reach people in their homes even worth investing in?

Based on our experience, there will always be a place for a diverse media mix. As lockdowns ease, people will come back out, albeit slowly. Having interacted with digital screens for months on end will push people to seek alternative forms of entertainment. That said, there will need to be a wholesale reimagining of the structure and pattern of OOH campaign planning, one that relies much more on data and digital displays, making the sector much more dynamic overall. 

Looking Ahead: Take Care of Your Customers

In this context, brands need to be conscious of how their messaging addresses consumers’ increased need for safety and security.

The pandemic has shown the stark reality of the economic inter-dependencies that exist between groups, communities, and countries, making it very clear that the stability and continuity of society rest on the perception that people’s emotional and psychological needs can be met in addition to fulfilling their material needs. It is no surprise that the top COVID-19 ads revolve around messages that deliver reassurance, support, and hope to their audience.

Clearly, the old adage of “take care of your customers, and they will take care of you” still stands in this day and age. The results of the Into The Light study show that Southeast Asian consumers are anxious about public health and safety, and need to know that brands are listening to them and responding accordingly.