I. Background: the effect of COVID on international trade
The pandemic radically impacted global trade, adding significant uncertainty and challenge for international marketers. According to one expert, “the changes in international trade caused by the COVID-19 pandemic in a single year were of comparable magnitude to changes otherwise typically seen over 4-5 years” (source). In 2020, the first year of the pandemic, global trade fell by 8.9%, the steepest drop since the global financial crisis of 2008. (source). This said, since late 2020, international trade volume has recovered to the pre-pandemic level at a rapid pace, with accumulated losses recovered by early 2022. While total trade flows are now comfortably above pre-pandemic levels, trade impacts across specific goods, services and trade partners have been highly diverse, creating ongoing pressures on specific sectors and supply chains.
The Impact of COVID on Trade in Specific Sectors and Industries
- The pandemic affected the services trade more than the goods trade. Services trade fell by more than 20% in 2020, almost four times the decline in goods trade. (source). Goods trade recovered quickly with limited factory shutdowns and a surge in demand for some durable goods (e.g., furniture, carpets, and appliances).
- As we all recall, trade in travel and tourism services slumped dramatically. But no one in that industry predicted the unexpected 2022 upsurge in demand for air travel and related services.
- By contrast, trade in digitally delivered services, such as telecommunication and information technology, boomed.
- Trade in several products nosedived (e.g., fuels, aircraft, cars, mechanical machinery, steel), while trade in some other products increased (e.g., protective equipment and pharmaceutical products, food, and ‘home nesting’ products such as domestic appliances and electronics)
- Shipping costs have increased by around 350% since May 2020 and are expected to remain at record levels through mid-2023. (source) This is the result of increased demand for durable goods in locked-down economies, combined with Covid-related disruption in the ports of those countries, exacerbating the shortage of shipping containers.
- Some industries are emerging from the pandemic stronger than others. Digital technology and low-carbon goods and services are among the sectors that will benefit the most in the longer term as businesses and investors increasingly target long-term resilience in those areas.
- Covid-19 accelerated the uptake of technology in business and society by about four years, as digitalization became a necessity rather than a choice. Notably, digitalizing global value chains (GVCs) for goods and services is one of the most visible trends. (source)
- Global revenue for cyber-security services is projected to rise from US$67B in 2019 to US$111B in 2025. Mass digitalization is, in turn, supporting vibrant disruptor industries such as fintech (financial services), health tech (health and medical goods and services), and edtech (education services), among others. (source)
- “Clean growth” and a drive for sustainable and resilient sourcing have become the prevailing economic paradigm, impacting all sectors of the international and national economies. Shortages across specific product ranges have reinforced the need for companies and governments to build greater resilience against unpredicted external events. Concurrently, the pandemic is also shifting the global investment landscape towards green finance. (source)
- The pandemic also accelerated the return of international and national industrial policies. Governments spent billions to support businesses and workers with media and online ads. These measures seemed to have staved off much potential economic damage.
- Essential retailers, like grocers, experienced an increase in organic traffic, while “inessential” retailers, like clothing stores, experienced a drop.
- Meanwhile, in-home media usage went up. TV viewership has climbed, but digital consumption has increased even more. The use of social platforms and streaming services has risen across the board; gaming has also grown dramatically.
II. Fundamental Shifts in Post-COVID Marketing Strategies
Marketers can be assured that consumers will return even beyond 2019 levels. This seems to be happening now just as quickly as the quarantine did. That’s why it’s critical for businesses to proactively update their marketing strategies to allow for the different contingencies that can emerge in a rapidly changing landscape. Marketing’s prominence has risen as the pandemic wears on, with companies assigning greater importance to marketing across the board. This is because, during the pandemic, marketing has been elevated within the C-suite as a driver of digital transformation, the key leader of the customer journey, and the consumer’s voice — all of which are paramount to other functional areas. And, without understanding the evolving dynamic of the marketplace, the C-suite cannot adjust to the threats and opportunities at hand and successfully navigate the future. (source).
Covid-19 has created a leadership culture of close collaboration focused on the urgent need for resilience. So, marketing is now seizing an ongoing central role in that dialogue, thereby driving the organization’s broader C-suite (and even corporate boards) on the importance of brand values in a post-pandemic marketplace where brand preferences have in many cases been upended.
Key themes from marketing research show that while quality, convenience, and price still matter to consumer choice, factors like sustainability, trust, ethical sourcing, and social responsibility are increasingly crucial to how consumers select their products and services.
The New York Times recently proclaimed something most of us had already assumed: that the “coronavirus has changed the way we internet.” l Our tolerance for screen time has never been higher, and that’s not likely to change.
Companies that market effectively, strategically, and compassionately during this period are emerging as the big winners. This takes confidence and well-planned forward momentum. Staying in touch is a true sign of a great friend – and treating your customers as friends is a great marketing strategy in any marketing environment and is even more critical now.
Companies need to offer relevant and truthful content to establish an image as a compassionate and helpful brand. So the professional advice is to create relevant, helpful, and informative posts timed strategically throughout the day to keep your customers informed daily and often. The tone of your communication should not be depressing. Consequently, reminding customers of this traumatic period isn’t a good idea as the pandemic recedes. Your messaging needs to be optimistic.
- “More companies are looking into internationalizing their business, and more companies are globally minded due to the pandemic.” Lynsey Sweales (source). The role of technology in global marketing is nothing new, but the rate of adoption and innovation has accelerated over the pandemic
- Deloitte predicts that companies heavily investing in their online business will emerge as market leaders in the future. (source). The future international marketer’s role will be more focused on how to best use digital tools alongside local activation.
- Companies that had previously just dipped their toes into digital faced a sales gap when COVID halted things like trade shows and conferences. It’s now essential for these businesses to integrate quickly and thoroughly, and many of them have.
- Focusing on investments toward marketing tactics that drive online sales includes reducing marketing investments in short-term campaigns while focusing on brand-building campaigns. It also encompasses shifting budgets to promoting at-home and delivery-based options.
- Marketers must fine-tune media allocations in response to demand-driven price fluctuations in various media channels. Changes in media supply and demand will impact costs, so marketers must closely manage certain spending areas, like digital, with refreshed ROIs on new cost levels.
- Another critical development—marketers need to track data in local geographies to understand varying levels of impact.
- Finally, it will be essential to Google relevant keywords that reflect new trends to inform your marketing decisions.
New research from WARC Data suggests Amazon, Meta and Alphabet could account for half of a potential $1 trillion advertising market by 2025. (source). Two in every three marketers who already dedicate a proportion of their budgets to Amazon expect to increase their spending further in the coming four years. Increased demand from advertisers will steer cost per click upwards on these platforms.
Marketing didn’t stop during the early days of the pandemic. Notably, in a recent Merkle survey, most respondents (52%) said they had increased marketing spending since the beginning of the COVID-19 outbreak. (source)
The Markle study revealed the most critical tactical priorities during the pandemic. When marketers in the survey were asked to identify their most vital tactical priorities during the pandemic, the top three priorities selected by survey respondents were:
- Trying new marketing technologies or features (50% of respondents)
- Becoming more consumer-centric in marketing messaging (45%)
- Developing new transaction fulfillment capabilities (42%)
Forty-three percent of marketers reported investing in automation technology to improve customer communications in February 2021, up 25% from June 2020. And 42.5% of marketers now report investments in data integration, up an impressive 71% from June 2020. (source)
For others, however, the best shift is changing the message. IAB data shows that 73% of advertisers have modified or developed new assets since the pandemic’s onset. Over half (53%) of these are increasing messaging that emphasizes the company’s mission. (source).
Surviving the pandemic meant holding on to existing customers and building brand value that resonates with customers. While these objectives remain paramount, two others increased dramatically in the February 2021 survey: acquiring new customers (+48.6%) and improving marketing ROI (+105.6%), pointing to a shift away from survival towards competing and making money. (source).
Additionally, acquiring new customers was increasingly successful, with marketers reporting a 6.3% increase in customer acquisition performance over the previous year, up from reported losses of -9.2% in June 2020. (source).
- Marketing Week found in a global study that 62% of B2C and 51% of B2B marketers say that Covid-19 has caused significant or radical changes to the customer journey. (source).
- All of this points to the increased importance of local in-market research to truly understand customer needs. This has, in many cases, changed significantly from the onset of COVID. (source).
- The United Nations found that countries with previously smaller online sales figures were the countries that have seen the greatest increase. This points to an increased opportunity to shift to digital sales to offset declining sales via traditional routes. (source).
Advancing Your Customer Outreach Strategies
When the coronavirus hit, digital transformation accelerated overnight, raising customer expectations simultaneously. Now that companies have their personal data, customers want anticipatory, personalized experiences throughout their journey.
Moreover, customers now expect you’ll have precisely what they are searching for. Creating these optimal customer experiences requires that companies place data and technology at the core of their organization. This, in most cases, means integrating some degree of machine learning and artificial intelligence into the mix. So, marketers must build the correct data and technology foundation to support essential use cases throughout the customer journey. This means aligning individual and collective goals across the customer journey, so any disconnects between functional silos like marketing, sales, and customer service are invisible to your end consumer.
Prospecting for new customers now requires an expanded set of skills focused on selling solutions, not products. Trust will be built by and rewarded to those who listen to customer needs and then carefully craft solutions to meet those needs.
Covid-19 created an irreversible trend for marketing to accept a nimbler mentality. Operationally, it also has meant faster decision cycles and the requirement of greater flexibility across creative, budgeting, and media sectors.
It’s important to understand that small- and medium-sized enterprises depend more on media channels that drive customer engagement. Global brands, on the other hand, run multiple campaigns, including values-based marketing that builds an association with consumers’ identities.
A 2018 research from Mintel revealed that 73 percent of consumers are swayed by companies’ charitable giving when determining where to make purchases-which is likely to remain consistent. (source) Consumers are savvier than ever and can spot disingenuous behavior immediately. With more people using these platforms during COVID, brands need to respect the need for an authentic presence.
To capture new customers, marketers need to research what’s happening on the ground, country by country, state by state, and zip code. For some businesses, such as banks, restaurants, or retailers, it may even mean tailoring communications store by store. Creating a personal, human connection within any commercial message requires defining consumer segments that describe people according to the multiple dimensions that influence their purchasing behavior. These indicators range from their psychographics to attitudinal characteristics.
By adopting emerging technology faster, global marketers will be better equipped to identify and react to local information. For example, an e-commerce store would need to factor in that for some countries, paying online isn’t the norm; they pay with cash on delivery. Brands need to be more empathetic and human, which means being locally focused and locally reactive. “Glocalization will become far more prominent than globalization” (source)
Finally, organizations cannot afford differences in customer support and guidance from one venue to another. For example, what is presented on the company website must not be clouded with contrary directions by other means, including chatbots.
Back to basics—What is the easiest and fastest way to boost organic traffic? Provide relevant content. When people cannot or choose not to browse brick-and-mortar stores to test products, they need to build trust in other ways. Updating your storefront or homepage, quickly answering questions, and proactively creating content that addresses emerging concerns can go a long way toward building trust.
Brands must behave empathetically and with sensitivity to the challenges consumers are facing. It’s important to stay current with changing restrictions or updates and ensure messaging is clear and consistent. For brands working across global markets, it’s also crucial to understand the specific situation for consumers in each market, as the impact of COVID on the local economy and society has varied considerably.
Back to Normalcy
Now that business levels have mostly returned to normal, organizations should abandon COVID-19 messaging because people do not want to be reminded of this very dark period in our history.
Of course, marketers still need to deal with a post-COVID business environment that has forever changed as we move forward. People, organizations, and industries have changed and continue to change. Fortunately, new, more sophisticated digital tools are helping marketers as they navigate emerging opportunities and challenges.