29/12/2020

Action and adaptability to generate opportunities

The preventive social isolation linked to the pandemic has generated changes in habits around the world. We know that some of these changes will lose ground in time, but others are here to stay. Faced with this context, companies have had to move quickly to be able to reply with agility to the new consumer needs. This also meant that companies had to reconfigure and rearm their strategies to maintain their relevance.

At the beginning of the pandemic, the first reaction of consumers was to try to stockpile essential products. At the same time, the preference for buying from direct channels of large chains and e-commerce grew exponentially: according to the Argentine Chamber of Electronic Commerce (CACE), sales for online supermarkets grew 300% during the first three weeks of quarantine compared to the three weeks prior to the beginning of isolation. As the situation advanced, consumers chose to stock up in nearby stores, a trend that continues today together with online shopping.

This rapid rearrangement in the purchasing mode took much of the value chain by surprise, and during the first few months of isolation, many online sales services found themselves saturated. For this reason, the work that was undertaken by some companies to assure that essential products could reach at risk  groups was important, either through alliances with last milers or with agreements with distributors to guarantee delivery.

These changes in habits did not only occur in sales channels. There was also a new definition of home, since it ceased to be exclusively a personal space to transform itself, among other things, into the work or study place. There was more time at home, more hours spent cleaning and a greater consumption of bleach and disinfectants. Added to this was the incorporation of new surfaces to sanitize that required specific products.

As there was a greater consumption of household products, the production companies had to adapt quickly to respond to the increased demand. In many cases, it meant the re-adaptation of manufacturing lines, or the prioritization of a certain type of product that was in higher demand than others.

Another visible change in habits was related to cooking tasks at home. The kitchen went from being a mandatory or routine task, to being a space for enjoyment, creativity and reinvention. The "homemade" motto gained prominence and this was demonstrated in the exponential growth in recipe searches for home cooked meals. At the same time, the need to reinvent breakfast, lunch and dinner expanded and there were increased searches for ideas of how to re-use leftovers. On that point, in the case of Unilever, the strategy was to increase coordinated actions with various actors to raise awareness about food loss and waste, offering useful and simple advice to help reduce waste in households. Within this framework, Alimentá Buenos Hábitos (Feed Good Habits) is the campaign that we have undertaken for the fourth consecutive year, in conjunction with actors from the public and private sectors, which has also allowed us to reach a great milestone: the first International Day of Awareness of Food Loss and Waste, which we will commemorate this year for the first time.

It is important to recognize that although some categories of mass products will not be consumed at the same rate as in March, they will continue to be at higher levels than traditional products. In this sense, the challenge for many producers will be to provide sufficient product for every consumer, which is something that Unilever has always focused on, keeping in mind the type of brands and the size of packaging.

Finally, a key aspect that consumers have demanded of companies in times like these, is that they have the ability to show their power of action and their ability to help society navigate difficult situations in the best possible way. According to the Edelman Trust Barometer 2020 -focused on the Coronavirus crisis and the role of companies-, 81% of those surveyed agree that the brand purpose is a key factor in their purchasing decision; and 62% believe that this crisis will not be overcome without brands playing a fundamental role. In this same report, 71% stated that they would never trust a brand again if they perceive that profits are being prioritized over people and 65% stated that a brand's response during the crisis will have a strong impact on their future purchasing decisions.

Among other things, these figures show that the only way to build trust in the midst of so much uncertainty is to be clear about the company's DNA, to be transparent and to offer products that deliver a functional benefit and are systematically found in the supermarkets at a sustainable value. It is no coincidence, according to Kantar Media, that brands with purpose grow twice as fast as those that only focus on the usefulness of the product.

All these new trends mean that we must be vigilant, permeable and above all actively listen to all stakeholders and to the value chain. Within each link, there is an opportunity to generate sustainable relations that can help the economy grow. A clear example is the case of SMEs, which are part of the productive network in our country and which need our help, now more than ever, so as not to fall short in the face of this difficult context. The industry has a fundamental role in this task and each one must contribute from the position they occupy for the economic reactivation.

This pandemic represents a turning point and companies cannot remain oblivious. Not only has the form of consumption been redefined, but the game has  opened up to incorporate business models that embrace the values ​​and principles of a new world, where the ways of connecting to each other have changed, but the need for closeness, trust and coherence between who we are and what we consume has been reaffirmed. The challenge is to be able to transform these changes into opportunities to promote economically viable, environmentally correct and socially just businesses.

Laura Barnator has a degree in Computer Science from the University of Buenos Aires, where she also taught Artificial Intelligence, and has a postgraduate degree in Business Management from ITBA. She is currently General Manager of Unilever Argentina and Uruguay.