How Does the News Cycle Impact CPG Buying Habits?October 13, 2020 - by Taylor Getler
Marketers are used to working with a pretty reliable set of elements that help them understand and predict why consumers buy the products that they do. Things like advertising, positive word-of-mouth recommendations, online reviews, influencer endorsements, etc. could all reliably lead to new consumers for a brand. In the pandemic, however, a new factor has emerged that has played a big role in inspiring new purchases: the news cycle.
In a panel discussion at Saint Joseph University’s Food Industry Summit, Scott McKenzie – a global intelligence leader at Nielsen – demonstrated how analysts were able to map buying behavior against breaking news drops. “We were able to map the purchase habits to the news cycle, if there was a Trump press conference or a CDC release or a World Health Organization event.” For instance, McKenzie specifically attributed spikes in toilet paper shopping earlier this year to high-profile news releases. Tylenol® is also a great example of a brand that saw tremendous sales from March to May because of news reports that it might be safer for COVID-19 carriers to take than alternatives like Advil®.
However, McKenzie said, current news events have not had the impact on buying behavior that they had even as recently as the spring. This, according to McKenzie, means that many Americans are becoming used to living in a pandemic world and are less affected by reports of rising or falling infection rates. This is a “psychological overhang,” meaning that behaviors that were initially inspired by those early news stories might be settling into more permanent shopping patterns that may be harder for brands to permeate.
Despite this, there is a strong possibility that as American shoppers become desensitized to the reports of new cases in their area, they will start to pay more attention to how the news is talking about economic recovery. Nielsen’s data suggests that consumers are going to become tighter with their wallets as information rolls in about unemployment spikes and the coming recession. This will also make consumers more risk-averse, but this won’t be a bad thing for all brands. We could still see strong growth for CPG companies with a strong legacy and a long history of delivering high-quality, reliable products, because an uncertain economy means that shoppers will cling to brands that they can trust.
While the news cycle is impossible to predict, brands can see the writing on the wall that the top stories of the next few months will probably include some scary information that will prompt concerned shoppers to be more careful with their spending. In order to prepare for this, brand leaders should shift their strategy to communicate the consistency and reliability of their products. As shoppers get less adventurous and are more financially conservative, for example, packaging with “new” claims and experimental product flavors may not perform as well as they may have a year ago.
The world is changing very quickly in the pandemic, and shoppers are turning to the news to better understand what the future will look like. In order for brands to succeed (whether that will mean responding to new demand or navigating through bad news), they will have to closely watch developing stories to understand shoppers’ changing needs, fears, and behaviors.