It is not news to anyone that the Coronavirus outbreak has affected all people, from all walks of life, across all geographies. With near hourly updates to the status of the outbreak proliferating across news and social media, people are finding themselves in an increasingly tumultuous environment characterized by inconsistent information, unraveling work and life schedules, and, overall, fear.
While physical health is paramount, there is also a need to address the psychological consequences, and consumer-facing firms have a unique opportunity to assist in this effort. In what follows, we offer a behavioral science perspective and corresponding recommendations on how firms can better respond to consumers in contexts marked by uncertainty, isolation, and excess information.
1. Uncertainty: balance novelty with familiarity and minimize post-purchase regret
If nothing else, this crisis is characterized by uncertainty: When will it end? Am I at risk? How can I protect myself and my family? How would my financial outlook look like? These are just some of the many questions that people around the world are asking themselves. With limited and potentially inconsistent answers available, psychological uncertainty is widespread. Behavioral science tells us that in contexts of high uncertainty, there are at least two consequences for our everyday consumer decisions.
First, when people experience uncertainty in the world, they tend to respond by seeking greater control over their environment (Miceli & Castelfranchi 2005), which can be achieved by pursuing familiar products and activities (Cutright et al. 2013). For instance, people may spend more time on hobbies that they are expert at or even cook their favorite meal from scratch. Such behaviors give people a sense of control over small aspects of their life. That being said, in times of major upheaval, consumers often adopt a change mindset and thus are more open to trying new products (Wood 2010), because changes become the new normal. So, what does this all mean for firms and their innovation efforts? In short, when it comes to their products, it is critical for companies to understand how their consumers balance a desire for familiarity with a desire for novelty. For example, when extending into completely uncharted territory, it may be the best for brands to be especially careful to maintain consistency with their existing positioning and brand image. Furthermore, they may benefit by drawing parallels between the novel offering and more familiar products. Conversely, when introducing more incremental innovations—for example, new flavors or low-sugar variants— it may be best for brands to accentuate the novelty by explicitly calling it out in communications and on packaging (e.g., “new and improved”).
Second, our everyday decisions become more emotional (Faraji-Rad & Pham 2016). That is, when consumers feel that the world around them is plagued by uncertainty, they rely more on emotions than on rational decision processes. For instance, under uncertainty, consumers are more likely to be swayed by emotional appeals in advertising (Hogg 2007). Generally, research suggests that an uncertain world lead people to rely more on what is known as System 1 processing, which is characterized by faster, more automatic, and more emotional decision making (Tversky & Kahneman 1992). Unfortunately for consumers, sometimes that type of processing can lead to unsatisfied choices as they fail to deeply consider the consequences of their actions. This is where firms can help. For instance, knowing that uncertainty surrounding Covid-19 is likely for consumers to rely more on fast processing, companies should consider offering free trials and more generous return or cancellation policies. More generally, companies should employ tactics aimed at minimizing customers’ potential post-purchase regret. Admittedly, this may have a financial impact in the short run; however, such policies may be considered not only more consumer centric, but would also likely increase trust that builds goodwill for the firm once this crisis resolves.
2. Information/Choice Overload: less is more
During crises, people actively seek clear advice (Gino et al. 2012), but the constant stream of information about Covid-19 can be overwhelming. Consumers are inundated with updates about confirmed infections, school closures, and social event cancellations. Indeed, behavioral science has long known that such information overload can paralyze people (Misra & Stokols 2012). When people feel as though they have more information than they can handle, they tend to disengage, which can come at the cost of receiving truly valuable information that may be buried in the noise.
For consumers, information overload significantly dampens their decision-making ability. The sheer exhaustion from having to filter through excess information increases the likelihood of deferring decisions altogether. Similarly, when making decisions under conditions of high choice overload, consumers are typically less satisfied, less confident, and more confused about their options (Lee & Lee 2004). Consequently, they are more likely to be dissatisfied by their purchases, leading to an increase in returns and a decrease in brand favorability.
For firms, the message here is clear: help consumers navigate decision processes in a simple, clear, and useful manner. There are two places where firms tend to go wrong here. The first is in sending generic and uninformative communications about the firm’s commitment to handling the Covid-19 crisis. Firms feel compelled to say something, but relying on vague platitudes only compounds the information overload. The second way that firms misstep is by providing too many options for consumers to choose from and too much information about each of those options. In the frenzied state of information overload, consumers need simple shopping experiences that meet their immediate needs. Such streamlined experiences should help increase customer satisfaction and brand loyalty.
3. Social Isolation: emphasize human connections, be transparent, and offer variety
To combat the spread of Covid-19, medical professionals recommend social distancing. Certainly, all should heed the advice of medical professionals, but the psychological costs of social exclusion and isolation are worth considering. Typically, isolation increases the desire for social affiliation, which can encourage consumers to pursue brands, products, and experiences that enable them to connect and fit in with others (Mead et al. 2011). In many cases, this manifests as a preference for brands that are described in human terms or that have human-like features (Chen et al. 2017). Accordingly, firms can benefit from highlighting how their products and services strengthen social connections, framing their products and services in terms of human traits, and designing products and services to resemble humans.
Additionally, behavioral science suggests that social isolation increases general skepticism and mistrust (Wickham et al. 2014), and it is reasonable to expect self-quarantine and social distancing to exacerbate this. For consumers, this may give rise to the belief that firms are working to profit off of the viral outbreak, even if that is not the case. For firms, the response is not simple, but it is straightforward: staying the course is key. Being transparent and offering reasons for any changes companies may introduce while emphasizing that we are in this together during the pandemic should help minimize the risk of consumers having negative perceptions on firms. Finally, social isolation resulting from Covid-19 can impact consumers’ desire for variety and openness to novel products. Specifically, the tedium of social distancing and spatial confinement may increase the desire for external stimulation. One way consumers satisfy this is by seeking variety in consumption, which not only offers excitement (Etkin & Mogilner 2016), but also confers a sense of freedom (Levav & Zhu 2009). Now, this isn’t to say that people will make entirely unfamiliar purchases, but rather that they may be more receptive to new variants of familiar brands’ products or even new brands in familiar categories. Ultimately, consumers are likely to err on the side of familiarity and predictability but will still venture toward moderate novelty for the sake of excitement and enjoyment.
People around the world are unsure of what the future holds for them in the wake of this pandemic, which has considerable implications for their behavior in the marketplace. For companies to successfully navigate this period of turbulence, it is imperative that they get a firm grasp of the psychological consequences for consumers and the implications for consumer decision-making. We have outlined there key psychological consequences that consumers face in such a crisis and provided suggestions on the factors firms should take into consideration. One key next step for you is to identify which (and how) factors are influencing your consumers more at what touchpoint. In some contexts, consumers may be seeking to exert a sense of control by purchasing more familiar products. In other contexts, consumers may be seeking something new and different because they are in change mindset (and if so, how new and different your offer should be). Indeed, there are countless other ways that behavioral science can inform such action, and we encourage firms to think deeply about how they can meet consumers in their current psychological state.