COVID-19 is the time for companies and brands to achieve far greater consumer loyalty beyond price...by focusing on safety and trust.

Summary

For most companies and brands, achieving (and maintaining) Customer Loyalty is the holy grail, allowing them to reduce the reliance on deals, discounts and pricing motivations as a means of differentiation in highly competitive markets. In the age of COVID-19 (as a blanket term for current and future mass pandemics), consumer Safety and Trust become far more critical factors underlying the ability of companies to stand apart, engage (or re-engage) consumers, while consistently communicating their values and focus.

This article explores the current state of affairs within five highly competitive mass markets (Automotive, Cruises & Hotels, Grocery Stores, Restaurants, Air travel), as they reopen their doors and commence operations in the “New Normal”, examining the steps, investments and innovations they are making (or intend to undertake) to ensure consumer safety, gain their trust and (hopefully) develop newfound loyalty as a result, in industries severely hit by the impacts of COVID-19.

Introduction

Customer Loyalty has always been an elusive goal for most companies and brands competing in highly commoditized, consumer focused, global markets. Food, fuel, cellular phones, electronics, internet service, clothing, footwear, air travel and financial services are all examples of domains where mass market product lines represent the primary revenue streams for most firms, with slim margins due to lack of sustainable differentiation relegating them to aggressive pricing practices.

There is a strong presence for premium brands in each of these domains where pricing becomes far less of a differentiating factor, but rather cache, quality, service, personalization, human rights and environmental practices all play a greater role in garnering loyalty and minimizing the pricing factor. The goal for brands (and a main goal of product marketing leaders) is to recreate this same degree of loyalty for mass market products. 

In the age of COVID-19 (and second, third waves, as well as other global pandemics that may appear), the new factor of safety becomes a critical factor, one that to date has been secondary at best. Have I truly ever been concerned for my safety when shopping for groceries? I care about general health practices and the expiry dates of products, but that is where it ends. Taking a flight? Beyond the normal large body of metal in the sky (I am a hobbyist pilot by the way), I’m not. Do I have safety concerns when filling up gas, going to a mall, shopping for a car, going to a restaurant or on a cruise? 

The answer is somewhat, to a few, but not to the degree that they play a major upfront consideration that may prevent the vast majority of consumers from engaging, and certain not to the extent that they would garner my loyalty as a result. Nowadays, the ability of an operation to provide a safe engagement environment, certainly in store or venue, but also online with last mile delivery being a point of contact (boxes, packing and delivery teams), introduces a radically new array of standards, and importantly, opportunities for differentiation and securing loyalty beyond price. 

In addition to safety, there is the element of trust, which to date focused primarily on quality of product. Trust now extends to adherence to standards and not just their adoption. While I may appreciate that a vendor adopts high standards, how do I know they truly intend to maintain them? The lack of ability to detect point of contact of COVID-19, despite all the contact tracing apps, raises the trust standards even further. Consumers will start to seek out vendors who adopt standards and can demonstrate adherence to help reduce the chances of contracting the illness. Companies that create a safe physical environment (or hybrid environment such as pickup) while enabling a seamless experience may stand out above the rest. 

How are leading companies across industries fairing thus far in the first 6 weeks or so of the reopening of society? Most are still figuring things out, as evident from the following review of five select industries - Automotive, Cruise & Hotels, Grocery Stores, Restaurants and Airlines.

Automotive Sales

Similar to other industries reviewed herewith, the automotive market as a whole has been impacted dearly by the economic shutdown. While car sales dropped severely as part of the shutdown in April May (YoY new car sales dropped 47% in April and 30% in May), the recovery for used cars has been significant, as evident from the charts below.  

How will car buying change in the face of COVID-19 and other, future pandemics? Are dealership visits, test drives and that unnecessarily lengthy sitting in the finance & insurance office haggling over price, soon to be a thing of the past? As of early June 2020, the strategy adopted by the top US automakers in the face of COVID-19 impacts is largely focused on payment relief (discounts), to support existing clients and urge new ones to transact, as well as the introduction of end to end online purchasing (GM has, although Ford, Chrysler and Toyota have not). 

In support of the used car market, Autotrader.com is clearly thinking differently about things, as evident from their recent marketing campaign that aims to introduce consumers to the new way of buying a car in these times, with a focus on a seamless, interactive, informed and interactive risk free process (thanks to text chats and video calls with dealers). AutoTrader vice president of marketing Greta Crowley notes that “We have seen the way we shop change drastically, and many consumers are not aware of the options available to them to purchase a vehicle safely.”, before adding that “We introduced Dealer Home Services in March to give car shoppers a way to see what options they do have from dealers while they are at home. Now you can take a virtual tour of a car from the comfort of your own couch, take a test drive from your front door and even buy the car from home with touchless delivery.” 

AutoTrader has also introduced a digital retailing solution for dealers that offers online transaction capabilities across the Canadian automotive marketplace. Within this solution, dealers can now provide customers with the ability to seamlessly build and complete transactions online within marketplace listings and to purchase a car on autoTRADER.ca. Jill Hadfield, Chief Product Officer at TRADER explains that “In response to recent circumstances that have accelerated interest in completing more of the car buying journey online, TRADER has made it a top priority to focus on innovating and adapting our offering to help dealers respond quickly to evolving consumer needs.”. Jills adds that “This first of its kind advancement in automotive digital retailing on a major Canadian automotive marketplace represents an exciting step forward in the future of car buying, and we are proud to be at the forefront of this evolution in Canada.”

As for physical dealership visits and their overall safety practices in this “new Normal”, the Canadian Auto Dealer Association’s guidelines offer a view into what we will see in terms of changes. CanadianAutoDealer.ca lays forth the changes that have, and will be introduced in support of the automotive industry, building on CADA guidelines. 

The Cruise & Hotel Industries

The Travel Industry has been dealt a critical blow. One of the areas hit hardest has been the cruise industry. Tight spaces, buffets, continuous entertainment, all defining characteristics of the industry, are precisely what we have now been taught to avoid. Bureau Veritas has introduced the ‘Safeguard’ label, as part of their “Restart your Business with BV” suite of solutions for cruise and other travel sectors such as hotels. Will hotels (and travelers) adopt, engage and trust in this certification and the adherence to their proclaimed standards? Jumeirah Al Naseem in Dubai became the first hotel in the world to receive Bureau Veritas safeguard label according to this press release from May 25th 2020 by BV.

Matthieu de Tugny, president BV Marine & Offshore, says: “We have worked to find a way to help passenger ship operators get back in business. Confidence is critical. Restart provides that confidence. Passengers, the crew and all stakeholders engaged in operations on board, in ports and in transit will be able to see that a ship has been assigned the Bureau Veritas ‘Safeguard’ label. By addressing the real risks, with transparency, the necessary trust and confidence can be fostered to support a safe restart and maintain operations thereafter.” Andreas Ullrich, global market leader, passenger ships at BV adds that “All stakeholders benefit from the visibility that Restart provides. The Safeguard badge demonstrates an operator has addressed health, safety and hygiene requirements, has properly implemented necessary procedures, has trained the crew and all employees onboard and has well agreed procedures with ports and terminals – and, finally, that a BV audit has been concluded satisfactorily”. 

Norwegian Cruise Line Holdings indicate that they are prepared to “throw the kitchen sink” at introducing new health and safety protocols because “the cruise industry cannot afford one more case of Covid-19 on board” (May 31, 2020). President and chief executive Frank Del Rioe says: “We’re going to prevent outbreaks on board and we believe if done correctly, that a ship because it is a controlled environment, will be the safest place in the world – much safer than if you are in the general population in your own community.”

A June 1st 2020 article by cruiseindustrynews.com “Redesigned Buffets Will Need to Convey Sense of Safety” quotes Erik Schobesberger, vice president sales modernization at ALMACO, a key supplier of interior, galley and buffet design and installation to the cruise industry to say that he expects some cruise lines will choose to keep the buffet concept but implement design improvements and equipment innovations that makes it safe. He adds that some “will transform their restaurants into an a la carte with open kitchens or cooking shows...and that we can expect “quick fix solutions to get the restaurants up and running to redesign and [the] revitalization of new innovative future- and germ-proof restaurant concepts".

Grocery shopping 

A recent article from the Chicago Sun Times begins with the following assertion: “Heightened sanitation, more online ordering, plenty of meal kits and the end of the salad bar. The coronavirus will leave us with many changes, experts predict.” 

Phil Lembert, from SupermarketGuru.com, states that “Sanitation will be at the top of the list for stores, with Plexiglas cashier stands continuing to be the norm, along with innovations like antimicrobial checkout belts and hand-sanitizing stations. Aisles will be made wider so shoppers don’t feel crammed in, and contactless payments will be encouraged.”

He adds that “the biggest change might be how drastically the number of products on shelves is reduced. Today, a typical supermarket stocks about 42,000 different items. Lempert envisions a hybrid experience in which shoppers go online to choose staple items — such as ketchup, breakfast cereal and dish soap — and then shop in person only for produce, meat, fish, bread and other fresh items that require a closer look.”

Albertsons CEO Vivek Sankaran told investors in April that the parent company of Jewel-Osco will continue investing in e-commerce. “We’ve had the plans, so now it’s a matter of accelerating those investments commensurate with the growth that we are seeing in e-commerce.”

Other common changes include reduced hours to allow for additional cleaning, as well as reserved hours for seniors and other at risk populations. These changes include Albertsons, Aldi, BI-LO, Fresh Market, Kroger, Publix, Safeway, Trader Joe’s and others. 

Restaurants

Six months ago, had I read an article titled “A restaurant is testing plastic 'shield pods' to keep diners safe during the coronavirus pandemic”, I would have perhaps flipped to the front page (or homepage) to check whether I was reading Mad Magazine or The Onion. In June of 2020 this type of article is mainstream, “real” media, introducing us to innovations that will aim to resurrect and protect one of the western world’s favorite past times, eating out. 

This image demonstrates clear plastic cones suspended above customers at Parisian restaurant H.A.N.D. They are a prototype called Plex'Eat created by French designer Christophe Gernigon.

A Washington Post article addresses the risks from within rather than focusing on patrons, stating that chefs and other kitchen staff are raising the alarm about returning to their old normal: chaotic, overcrowded, poorly ventilated kitchens with shouting, touching multiple surfaces and few safety precautions especially when the “front of the house gets slammed”. As a Chef is quoted: “We’re touching food. We’re in close contact. There’s no social distancing”.

Viz Saraby, a professor of interior design at George Brown College in Toronto says that “Subtle changes to restaurant spaces [are more likely], like placing tables further apart or setting up physical barriers between them, and cutting capacity in half. Emma Rankin, an instructor in the tourism, hospitality and culinary arts program at Fanshawe College in London, Ont., expects restaurants to move away from built-in booths and towards movable furniture that offers more flexibility within a space. “I think the fundamental reason why people go to restaurants as opposed to ordering in and eating at home, is because of the vibe of the restaurant," adds Saraby, who specializes in retail and restaurant design. "You don't go into a place that's empty because you think it's probably not very good and you don't want to sit there by yourself.”

A recent New York Times article addresses the risks about what may seem an obvious middle ground, takeout or delivery. Donald Schaffner, an extension specialist in food science at Rutgers University says “There’s” very little evidence of transmission by surfaces. There’s no evidence that the virus is transmitted by food. Therefore the safest choice is going to be the one that avoids contact with the most people.” Ben Chapman, a professor and food safety specialist at North Carolina State University ads that “Delivery, though, is slightly safer because of contactless delivery, which lets workers leave food at your door...since the ordering and payment are done electronically, customers and workers never need to touch.” 

Packaging appears to have a low risk of contamination, as per the article. While the C.D.C. indicates that contaminated surfaces can infect people, it is “not thought to be the main way the virus spreads.”. John Williams, the Chief of Pediatric Diseases at UPMC Children’s Hospital of Pittsburgh and the University of Pittsburgh adds that “Even if an infected person did touch a package, the risk of transmission is slim...that person would have to contaminate their own hands (for example, wiping their nose), touch and contaminate the package, and then we would have to touch the package in the same place and then rub our nose or eyes. 

Air Travel

The final industry covered herewith which has bottomed out as a result of COVID-19, is of course the travel industry. Air travel accounts for over 4 Billion flights annually, representing the main business and leisure travel method in the western world and within developed nations. With a drop of close to 90% in travel (see chart below) given that airplanes were a primary cause for the spread of COVID-19 beyond the borders of China to the rest of the globe, the question remains “how will airlines ensure the safety of staff and passengers to allow this transportation medium to return to service?” 

Chris Bryant in Bloomberg.com writes “things like wearing masks and having to ask permission to use the toilet will make flying even less enjoyable. But these measures may make passengers feel safer. For example, while the gowns and other personal protective equipment issued to Emirates’ cabin crew are a little intimidating, they’re likely to put some nervous flyers at ease.” Bryant adds that “Alaska Airlines, Delta Air Lines and JetBlue Airways are blocking most middle seats and Southwest has capped sales below capacity.”

On May 28th 2020, United Airlines CEO said publicly that “Airplanes don’t have social distancing — we’re not going to be six feet apart.... But an airplane environment is incredibly safe.” Donald Wood, in Aviation Pros indicated that Delta has been making various upgrades to health and safety standards, including extra cleaning at airport check-in lobbies, self-service kiosks, gate counters and baggage claim, while electrostatic spraying will take place in the planes and throughout terminals. Other measures include plexiglass shields at check-in counters, in Delta Sky Clubs and at gate counters throughout the United States. Social distance markers will also be added at all of the airports served by the airline.“The (travel) experience is a very comfortable, a very safe experience, we have taken actions, even above and beyond what the CDC has recommended to ensure safety,” Delta Chief Customer Experience Officer Bill Lentsch said in a statement.

Donald Wood adds in a recent article that “as for the actual onboard experience, Delta is now boarding passengers back to front and limiting it to 10 customers at a time to minimize your contact with others. The carrier is also blocking middle seats, adjusting capacity numbers and requiring face coverings. Before passengers board the planes, cleaning crews complete an extensive checklist of procedures using high-grade disinfectant to wipe down personal and common areas of the cabin. Delta also temporarily streamlined food and beverage offerings to reduce touchpoints, with snack bags given out during the first pass through the cabin by flight attendants.”

In addition to blocking middle seats, changes may include new seat designs aimed at protecting passengers. Concepts include kits that are added to middle seats, creating a barrier between passengers, such as ‘Interspace Lite’ from transportation technology company Universal Movement. Their design was covered in a recent CNN article (seen below), where founder Luke Miles adds “the divider that separates the window and aisle seat isn't a clear screen, which will make travelers feel more comfortable. We don't want it to look, in any way, medicinal...we just want them to feel more comfortable." 

Miles indicates that they are working to make the Interspace Lite product operable by late summer. According to the article, Quentin Munier EVP for strategy and innovation at Safran, an airplane seat manufacturer, adds that his company is “working on several other concepts that will help make flying in the wake of Covid-19 safe and secure”. These include touchless travel, such as activating a food tray table with a pedal, rather than with one’s hands. The company is also developing a kit called ‘Ringfence’, a removable partition that could be placed around each traveler's seat. Glassafe by Avio Interiors, flips the middle seat in the opposite direction, along with a transparent barrier, as seen below.

Closing thoughts

As I noted earlier, we are in need of more time and perspective to measure the sustainable performance of companies and brands in this era. Quick fixes may garner headlines, public attention and stock price rallies, but the true impact will arise from lasting and evolving measures that remain true to the desire to protect masses of consumers over time. This will require reimagining products and services while keeping in mind critical new trust and safety factors, usability, analytics, and communication styles. For those organizations willing to tackle this challenge as an opportunity to service and protect existing and new clients, rather than as a disruption, this may be a rallying point for practical innovation and differentiation that finally allow for de-commoditization of industries deep in margin battles with their peers. 

About the Author

Simon Brightman is an Adjunct Professor at the University of Ottawa, Telfer School of Management. His research interests include global strategy, data analytics and Artificial Intelligence driven decision making in government, international organizations, as well as private corporations.

Simon has lectured and taught technology commercialization, innovation, product validation and product development for over 12 years in private, public and academic organizations. He has served in various executive roles leading data analytics product technology firms in the USA and Canada, including Head of Data Strategy & Open Banking at TransUnion (Credit Reporting Agency), Vice President at Panvista Analytics (a US wearable geo-location analytics firm), Head of Agile & Product Management at Points.com (Nasdaq traded, leading global loyalty e-Commerce provider to Airlines & Hotels), Senior Manager at KPMG (program management), presently a Senior Partner with Global Data Insights (data analytics advisory & investments across Fintech and other xTech domains).

Simon holds a BSc. in Computer Software & Business Management, an MBA in Technology Management as well as a Masters in International Relations (Global Strategy & Decision-Making) from Cambridge University. Connect with Simon on Linked in