LatAm Consumer Insights on Covid 19
This article is part of our series on Global consumer insight on Covid-19. You can view the full series or download the report.
In recent weeks we have seen Latin America become the new epicenter of Covid-19. According to the Pan American Health Organization (PAHO), Latin America has surpassed Europe and the United States in the daily number of infections. The pandemic that has been hitting these countries is the same, but the impacts are plural – and some are long lasting. In order to go through this challenging moment and thrive, one must understand the context and behavioral developments of Covid-19 in these countries.
At Brand Genetics, we believe that the future is human. There is no way to take sure steps unless human truths are the key to the equation. To understand a little more about the challenges and opportunities for brands operating around the continent, we investigated data from four Latin powers: Brazil, Mexico, Colombia and Argentina.
The Pandemic Numbers
In Brazil, differences between federal, state and municipal governments regarding the strictness of the quarantine have created a more flexible environment – and the country, which today is the leader in the number of cases in the continent with over 2.4 million contaminated and 87,000 dead, has some of the worst indicators of social distancing in Latin America. According to Google research, the reduction in mobility for leisure and retail is only 42%, while in Colombia it is 54%, 52% in Mexico and 65% in Argentina.
In Mexico, the government has not imposed any mandatory measures – but to avoid the worst, some states have tightened their policies in relation to those of the federal government and today the country has just under 400,000 cases and 44,000 deaths. In Colombia and Argentina, however, a preventive and mandatory isolation has been decreed since the end of March, but while Colombia begins to relax the rules in June, Argentina has just extended its strict lockdown, becoming the longest enforced in the world so far. Colombia has reached the mark of 250,000 cases and 8,500 dead, and Argentina comes last, with 162,500 confirmations and 3000 dead.
The impact on public health and the economy is becoming more tangible every day – but what about the social and behavioral impacts? How will different markets react and how to be relevant in the post-pandemic world? In an attempt to answer these questions, we identified six behaviors that were accelerated during the lockdown and will shape this new Latin American scenario.
What to expect from post-pandemic Latin America?
With the advance of the pandemic, the financial impact on the continent is overwhelming. The forecast is that Latin America will end 2020 at its period of lowest growth compared to the last 40 years. In Argentina, 53% of the population claims to have suffered a negative impact on their monthly income during the quarantine, and 4 out of 10 claim to have failed to pay at least one bill in the last month. In neighboring Brazil, the reality seems to be even more drastic and 69% say they have had some loss of income since the beginning of social distancing.
The increase in online shopping, which allows for comparison, combined with a decrease in purchasing power and a greater awareness of the drama suffered by others, have led consumers to be more assertive, who search and compare to make better, more informed and more conscious decisions. In Brazil, for example, 88.4% say they intend to buy less on impulse after the quarantine, and 72.2% say they are less willing to overpay by brand.
What does this mean for brands? The search for more affordable prices will increase -premium categories should recover more slowly than the others – and it will be more important than ever to understand what is essential and what are the attributes that generate value for your target. The social capital of brands will not be enough to convert – it will be necessary to equalize prices, have tangible quality and social responsibility.
The risk of contamination in public environments, which gave rise to the rules of social distancing, has dramatically accelerated the process of adopting online tools — especially in Latin America, which has always been a step behind the digital revolution curve. For experts, “Covid-19 could do with Latin America what SARS did with Chinese e-commerce in the early 2000s.” E-commerce, for example, which today accounts for only 5% of retail sales in the region, is expected to rise to 25% of the total in a decade, according to analysts at HSBC.
During the quarantine, there was a democratization of the digital environment, and online services, which were associated with younger generations or higher classes, are being consumed by all segments of society. A portrait of this is that in Brazil almost 40% of current online shoppers made their first purchase in March, and e-commerce gains a new online store per minute in the country. Yes, you read correctly, per minute.
We are faced with the birth of a contactless economy – we have had the emergence of telemedicine, which has been helping to take pressure off the health system and help people who want to avoid risks; distance education, always questioned in the past, but is now considered indispensable; entertainment and online socialization, which help to maintain mental health during confinement; e-commerce, which has grown exponentially during this period; digital banks and contactless payments etc. There are countless examples!
What does this mean for brands? During this transition period, we will see consumers who are apprehensive and in search of safety and practicality. Solutions that represent less risk, such as contactless payment, will become even more common. It is important to offer safe options online and offline — mapping out the contact points that can generate apprehension in your consumer and trying to mitigate this as much as possible.
Revaluation of the place and the collective
When borders close, and we have reduced mobility, attention turns to our surroundings. The pandemic has also strengthened the sense of community, helping us not only to understand the pain of others, but to develop empathy. During the quarantine, we have witnessed the emergence of a variety of awe-inspiring local initiatives: in Mexico, in order to maintain the feeling of community and help local businesses, the Chamber of Commerce created the hashtag #MightyMexMO for everyone to show what they are doing, and, thereby, urge people to support the local business community. In Brazil, Visa is supporting the hashtag #CompreDoPequeno (buy from small businesses), which helps the consumer to find small businesses in the vicinity.
In this moment of transition, as we seek to re-create a sense of normality, ‘local’ businesses have become a safe haven – our key to belonging and the chance to maintain a minimal level of sociability. Despite the growth in online shopping, a Nielsen report shows that there has been an increase in shopping in local street shops, from 18% in Mexico, 19% in Argentina, 20% in Brazil and 23% in Colombia.
What does this mean for brands? Consumers seek brands with purpose, which transform values into attitudes and that value and understand local culture (especially important for global brands!). Initiatives that drive the local economy bring consumers closer, generate identification and emotional engagement. It is important to understand that social interactions are essential for human survival, so it will be important to elevate the shopping experience, and acknowledge that brands are integral parts of communities and have a key role in socio-economic actions.
Prevention and Self-care
In this period, health is in focus. With the collapse of hospitals, vulnerability increases and generates a change in attitude – the relationship with health care ceases to be reactive and becomes proactive and preventive: there is an interest in the functionality of food, greater value given to physical activities and a search for supplements that increase immunity. An example of this is the Brazilian Network Bio Mundo, where sales of propolis and vitamin C grew, respectively, 835% and 405% in March.
Along with preventive practices, the concept of health is expanding and has become more holistic —stress and anxiety, caused by social distancing, emphasize the importance of mental health. There is a search for balance between physical and emotional care. In this context, relaxation practices, therapies and even entertainment — virtual at the moment — help make the quarantine lighter. Food supports this balance: it is a source of nutrients, but also offers pleasure and indulgence.
What does this mean for brands? In this context of greater attention to body and mind we will see a growth in demand for products that facilitate prevention and self-care: whether through technologies that help keep health in check, services aligned with well-being or functional foods (it is important to remember that Latin America has natural resources rich in nutrients – make good use of that!). Consumers will be more attentive to their own health and give preference to brands that care – not only about their external audience but also the internal one. Every change starts from the inside out.
The fear of contagion has changed the way people deal with hygiene and protection habits. Contact has become a source of risk, whether with people, spaces or surfaces. It is worth remembering that cleansing rituals are essential in Latin American cultures. In a 2011 survey, Brazil came in first place in the ranking of the most hygienic countries in the world. Brazilians were also identified as those who wash their hands more times a day — the index was 67%, while the world average is 54%. Amid this context of contagion, the reaction would not be different: the purchase of cleaning utensils rose 71% in Argentina and 75% in Brazil.
In Latin America, we see that the warm and affectionate culture is being shaken in many ways. First, the use of masks creates cooler relationships — we cannot see how people express themselves, smiles can no longer be shared. In Buenos Aires, for example, fines for those who do not cover their nose and mouth can reach up to 80 thousand pesos. Second, socialization outside the home, characteristically involving large groups and shared consumption. How to ensure the safety of meetings in this new scenario?
What does this mean for brands? Everything that comes from outside generates insecurity, so brand communication should prioritize a sense of security and support, ensuring strict and visible hygienic processes. Commitment to cleanliness and protection should extend to all stages of the consumption journey. Despite the weakening effect of the pandemic on businesses, consumers wants agility and responsibility in order for confidence to grow.
New Social Age
Socialization is the great key to what we are experiencing — a crucial point of discomfort and conflict. Physical contact is precisely what we miss the most and physical isolation is what protects us the most. We went from F.O.M.O (fear of missing out) to F.O. G.O (fear of going out) — before we saw posts with crowds on social networks and we felt bad for not being there; today we look at those images and think about how irresponsible and risky that could be.
Post-pandemic socialization will be a gradual process. At first, outdoor gatherings will be important, since enclosed spaces are more prone to spread of the virus; private spaces make it possible to control hygienic processes and create a safer environment – but this does not mean that establishments will be forgotten, but any socialization space will have to adapt to the new sanitary rules.
Gathering events are part of Latin American culture, such as Día de Muertos in Mexico, the Barranquilla Carnival in Colombia and the samba school parades in Brazil. How will these events adapt? The Spanish post-flu Carnival in 1919 was a milestone in history: it inspired music, paintings and publications. Today, we begin to see what post-pandemic Entertainment will be like — -in Mexico there has been a resurgence of ‘autocines’. In Brazil, film sessions and ‘drive-in’ shows are running out of tickets.
What does this mean for brands? The public will take different measures according to the variables of risk vs. reward. In this transition phase, brands must guide, protect, and use their power to enhance social interaction experiences — whether at home, outdoors or indoors. It will be necessary to ensure physical protection and emotional security without forgetting the human warmth factor — adapting physical spaces and thinking of new products and services that suit the new scenario. Accountability and transparency will also be fundamental — after all, prudence has become even more essential in the conducting of any business.
As we can observe, the unfolding of Covid – 19 goes beyond the immediate transformation of routines and today we can realize that there is also a long-term behavioral impact. According to science, it takes 66 days to develop a new habit and suggesting that we will hardly come out of this the same way we entered. Many of these new behavioral changes have become habits and will influence how we consume and relate to post-pandemic brands and products.
The trends we mentioned show an increase in critical power, autonomy and caution. The sense of security and new ways of connecting with consumers suggest a new compass for businesses. Latin America, which had not even recovered from the previous recession, faces a much larger contraction than the world average.
The only certainty we have at this point is: we will have a slow recovery – and we need to join efforts to make the post-pandemic world more responsible, transparent and humane. We at Brand Genetics are committed to this cause and hope to be able to help our customers do the same, with deeper and more relevant insights and innovations designed for happiness and well being. We use scientific and empathic techniques to generate greater predictability and guide accurate strategies in a volatile and ever-changing world.
Let’s do that together?
*This article was written by Brand Genetics LatAm and the content was collected with the help of our Latin American partners -Provokers Argentina and Nodo Colombia