Aggregating the findings from a range of webinars and interviews with experts in the industry, Asia Research Media reports on how the research industry in Asia is likely to change in a post-COVID-19 world.
We reference insights from our partner publication GreenBook, ESOMAR, and interviews with management consultants and heads of research firms in Asia. A series of articles will examine the impact on the demand side for consumer insight, the supply side, the expected changes in research methodologies, and how consumer markets in Asia will be affected.
We would like to thank the various contributors to these articles, including 2CV, ABN Impact/InSites Consulting, BVA BDRC, Duxton Consulting, GlobalData, GMO Research, IBM Services, Mike Sherman, Rakuten Insights, Tapestry Works, Toluna, and YouGov.
Our first article is a higher-level view, drawing on our full range of sources, highlighting where the COVID-19 pandemic has had the most impact, and the changes that are likely to endure in the industry and in the broader economy.
We have summarised these into 5 key factors as follows:
- Rebooting of the economy – in which direction?
The world economy has gone through an unprecedented decline, with economies shrinking by 20−30% during the worst periods of the lockdown. Unlike ‘normal’ cyclical recessions, and even the ‘abnormal’ Global Financial Crisis, the economy will recover in a fundamentally new direction, with changed consumer attitudes, behaviours, and lifestyles. Corporations will have to respond by introducing new products, changes to their service channels, and very different corporate communications.
We are seeing some positive impact from the lockdown, including the reduction in pollution from decreased human activity and particularly from much less air travel. But while the environment has had a temporary respite, the rise in single-use plastics for greater hygiene could set us back. Brands will talk about sustainability, but unfortunately consumers and governments under budget pressure will not be able to spend so much on saving the planet.
We are moving into a ‘post-globalized’ world where international trade is significantly reduced and where countries are putting their national interests first. Global brands have seen their supply chains disrupted, and consumers might turn more to homegrown brands and local produce. This is both to support local economies and for greater safety, e.g. supply chains that are simpler, easier to monitor, and might not cross international borders. The independent testing and certification industry will see more business, and in new categories involving closer human contact, such as restaurants, hotels, and hospitality. Production of non-viral packaging and surfaces, e.g. for fixtures and fittings, will be a growth sector.
Political tensions have increased over who is to blame for the outbreak and how it has been handled. In recovery, the US could impose punitive tariffs on Chinese imports as ‘reparations’, leading to more trade disputes.
The economic fallout from COVID-19 has already been felt, and some aspects will get worse as governments and corporations will have to deal with more debt. Many people have lost their jobs, and most have seen a reduction in their income.
During the lockdown, households have had their lifestyles fundamentally changed but have had time to think and plan for the future, e.g. about how best to change going forward. With this, many have found ways to reduce costs, not only out of necessity, but as an insurance policy for more difficult times ahead, or just as a way to save money. Based on an ongoing consumer survey, people say they will ‘trade down’ in the longer term in categories including groceries, eating out, entertainment, holidays, and car ownership, and some will generally avoid luxuries and expensive brands. There will be some redefining of what is ‘luxury’ and what are ‘luxury brands’.
A recent business survey in Singapore shows that they will continue to cut costs and change their priorities going forward. Some will postpone new investments and focus more on their core, more established markets, rather than on new business development and expansion. But investments in IT could increase as they look to new solutions for remote working, cloud services, AI, and automation, among others. Corporations will outsource more of their services as they move to slimmer business models, with less headcount and cheaper/smaller offices. There will be more start-up businesses as some PMEBs and expatriates lose their jobs but look to service this new outsourced business through their own enterprises.
The prime rental markets will be severely impacted as companies become more virtual or take offices in cheaper locations, and by moving offices they will redesign them for more remote working − e.g. hot desks − and for more distancing. Cramped co-working spaces may become less popular and start-ups will seek alternatives to these ‘quick fixes’ for facilities, e.g. in cheaper premises outside of central business districts, with the benefit of not having to use public transport to commute.
- Media and corporate communications
In any crisis, consumers turn more to news media for information and updates. With more time on their hands and plentiful online media, people are consuming more news than ever. The public are already aware of ‘fake news’ and have turned to more reliable news brands. In many markets, trust in government, leaders, and government websites has actually increased. The public see this as the best way to find out what is really going on in a world of fake news, rumour, and junk science.
But corporations also need to build trust with their consumers. Authenticity, safety, well-being, and reliability will become even more important brand attributes to communicate going forward. Brands have scaled back their advertising during the lockdown as it has been difficult to launch new products during this period, even though the size of audiences, media reach, and frequency has gone up. Brands have been reluctant to invest in creative development as corporate expenditure has been put on hold, but those that do invest in their brands will benefit more on the recovery. That said, advertising during the lockdown period has been somewhat clichéd, with similar themes around ‘teamwork’. Considerable research will be needed to help formulate unique and compelling communications strategies during the recovery.
- Change of relationship between clients and research suppliers
COVID-19 has produced a lot of social distancing – e.g. lack of face-to-face meetings – but the crisis has in many ways strengthened relationships between clients and research suppliers. Corporations will need to adapt as their business and consumer markets change, and consequently clients are seeking even more advice and guidance from their agencies.
With many projects on hold or cancelled, research agencies suddenly have more time to do their own research, and with it increase their visibility with clients (as important as brands maintaining visibility with their consumers). Agencies have reconnected with lapsed clients by providing them with free research, including the tracking of consumer sentiment during the lockdown, the impact on consumer purchasing, and how these are likely to endure for the longer term. Clients spend more time reading the marketing content put out by their agencies as they hold off on commissioning their own research.
The relationship between corporations and their employers will also change. Remote working will become more common and staff, who have seen it work in practice, may demand it, wanting more flexible working arrangements with their employer going forward.
Some agencies have offered clients free staff surveys as a means of demonstrating their capabilities in employee research, and to help build demand for employee research as the job market evolves with more remote working. Assessing staff productivity and maintaining engagement of staff will require know-how in terms of how to manage staff with a combination of technology, training, and perhaps a completely new style of management.
- Change in status of research
COVID-19 and its aftermath will produce fundamental changes to markets and target audiences. Nearly all strategic market research prior to the crisis will need revising. Indeed, much of the business literature itself now seems dated – we can expect numerous new publications on business, marketing, and human resources in a post-COVID-19 world. Many of those browsing these books will be looking at when they were published.
Brands will see a shift in their equity, as some have lost visibility due to the lockdown, and others (particularly e-commerce brands) have become more prominent. Consumers have bought more online during the lockdown, some from retailers they have never used before, and many say that their increased online expenditure will be maintained with a loss of share for traditional retail. Brand equity measures of retailers will have shifted considerably in the space of six months.
Senior management will turn more to their consumer insight departments for information and guidance, increasing the status of market research within organisations all the way up to the level of Chief Executive.
We expect (or hope) that more of the marketing budget will be directed into consumer insight in order to find out ‘what the hell is going on’. Target audiences have changed, as well as the required messaging and channels to reach them, meaning that investment in new research should be the precursor to investment in campaigns. Corporations could make the mistake of rushing into campaigns at the first signs of recovery, but agencies will need to deliver their insights faster and more iteratively, especially if there is a reemergence of COVID-19, e.g. brought about by the opening up of markets or even seasonal changes.
- Research methodologies
Social distancing measures have restricted the use of face-to-face research methods – either in-person, in-depth interviews or focus groups. Suddenly qualitative research has gone very digital. Online focus groups had been used for some time but had not gained the level of traction that some had hoped for – all that has changed. By necessity, focus groups have gone online, and many clients, agencies, and respondents have started to see the benefits of this for the first time.
It is likely that online groups will stick, and we could even see a growth in qualitative research as the cost comes down and the reach increases, e.g. to non-metropolitan areas where traditional focus groups did not usually penetrate. Qualitative research could see more online groups being undertaken, with fewer, more targeted respondents but in a wider geography.
Emerging markets have seen a slower adoption of online research, despite panels having been established in these markets for some time. More quantitative research in emerging markets will move online, but cultural objections to long, remote surveys means these surveys will have to be streamlined – something that the research industry had been moving towards with lighter but more regular surveys, e.g. through insight communities.
Much of the investment in insight communities is made up front. If these communities were set up prior to the outbreak of COVID-19, then clients have been able to tap into them for insights throughout the crisis. This has been useful for ‘toe-dipping’ research, e.g. into what concepts might work in the crisis and during the recovery.
As stated earlier, most strategic research will need to be renewed. With such significant changes to markets, economies, consumer lifestyles, and attitudes, most segmentation models will need to be updated, and with this a revision of products, services, prices/promotions, and channels of delivery.
But others see more fundamental changes to the type of research being undertaken. Analytics and AI were already being used by corporations to assess consumer behaviour and predict purchase patterns. With more online purchases, more online media consumption, and more home delivery (which will be sustained even when shops, restaurants, and hospitality services are fully open), there will be more data than ever. Consumers have also become more accepting of being traced and monitored online.
During the lockdown, in-person presentations were suspended and we moved to video conferencing. Zoom, a video conferencing company from California, became a household name almost overnight. Agencies have even used ‘digital workshopping’ with positive results, and this method of client debriefing will continue, with the benefit of including more stakeholders across a wider geography.
Over the next few weeks, Asia Research Media will go deeper into these areas, reporting on the findings of consumer and client research, and elaborating on the factors impacting the research industry in Asia. Specifically, we will look at:
- Demand-Side Changes: how client organisations and research buying will be affected.
- Supply-Side Changes: how supply-side organisations will change and need to use new research methodologies.
- Consumer & Business Market Changes: in selective markets in Asia, we will look at the changes to be expected in consumer and business markets and the opportunities to be realised
Authored by By Piers Lee, Deputy Editor of Asia Research