A Brand's Guide to understand Consumer Psychology

1. Introduction

• Consumer psychology can help brands shape a better future.

2. The Psychology of stress and copying

• 2.1 Acute Stress Vs Chronic stress

• Throughout the pandemic, each of us has experienced acute stress (an unmasked stranger walking toward you in the grocery store) and chronic stress (worrying if your family members are being safe) to varying degrees.

• We know through a robust body of biological and psychological research that stress and the associated state of fear are highly influential in the way we think, act, and feel.

• Our brains have evolved to have a specific reaction to threats. Immediate threats typically cause us to freeze, and our brains direct our bodies to divert resources toward responding with fight or flight. Our heart rate and pulse increases, our digestion slows, and our minds are vigilant for any clues.

• Throughout the year, each of us has experienced acute stress and chronic stress to varying degrees.

The Effects of Chronic Stress

• In the beginning of the pandemic, consumers naturally diverted their emotional resources toward survival.

• If you’re expecting something bad to happen at any moment, it’s hard to think through how much flour you actually need or decide which organic milk is the best value. Because we don’t have as much cognitive resources for complex decision making, we are more likely to be impulsive or rely on habits and routines.

• To counteract stress, we often engage in coping, a form of emotional regulation where we seek out things that help us feel more positively. For instance, traditional “comfort foods” like canned soups flew off the shelves early in the pandemic, because it provided a culinary safety blanket that transported us to better times.

As we create communications,products, and experiences that resonate with changed consumers, we should focus on satisfying fundamental needs that have been suppressed and underserved during the stressful episode. They will have the greatest potential to stick around.

3. How Brands can Adapt By serving Each Base Need

Satifying Fundamental Human Needs

• When we can’t engage in the behaviors we’ve become accustomed to, we have to find new ways to satisfy our fundamental needs of Belonging, Appeal, Security, and Exploration, what we call our BASE human needs.

• For instance, fundamental needs for Belonging and Exploration may now be satisfied (perhaps to a lesser degree) by joining a remote book club or playing a new video game that lets you become immersed in a new world. Brands must identify areas ripe for meeting BASE needs in meaningful ways both now and in the future.

• Look for untapped possibilities to create Belonging in formerly social categories like cooking and dining, as well as those that are currently underutilized, like entertainment and wellness.

BASE - Belonging Appeal, Security and Exploration.

1. Belonging

• The need for Belonging involves feeling like you are part of a group or community. Given that so many of our interactions with family, coworkers, friends, and social and community groups happened face to face prior to the pandemic, it was easy to meet those needs without putting in much effort.

• During COVID, connecting with others has become more challenging, and consumers are looking for new ways to fill those voids. Early on, consumers turned to social media and video chatting as ways to connect with others, but many found that those experiences struggle to replicate genuine social interaction.

• Brands that have delivered on the need for belonging during the pandemic, like Slack, have been hugely successful through their interactive and community-building components. Look for untapped possibilities to create Belonging in formerly social categories like cooking and dining, as well as those that are currently underutilized, like entertainment and wellness.

2. Appeal

• Look for new ways to help consumers build status in ways that reflect their values in a time of continued uncertainty and stress.

• The need for Appeal is the need to look good to others, to gain social status or attract new friends or romantic partners. Typically, Appeal has a large influence on consumer behavior, as consumers use brands to signal attributes or values about themselves and their status by choosing particular brands.

• During the pandemic and ensuing economic downturn, consumers may be rethinking the type of Appeal they want to showcase, as big flashy purchases may appear more frivolous and reflect poor taste in a time when so many are struggling to meet their daily needs.

• Instead, brands should rethink the way they help consumers meet their Appeal needs, leaning into signals of high quality and long-lasting materials that will deliver for years to come to help justify high end purchases. For example, Peloton has succeeded by creating a calculator that compares the bike’s cost to traditional gym memberships and fitness classes. Look for new ways to help consumers build status in ways that reflect their values in a time of continued uncertainty and stress.

3. Security

• Look for new ways to build security across categories by reinforcing messages that build and sustain peace of mind within consumers’ overburdened minds.

• Security has always been a critical driver of brand choice, even before the pandemic. Brands must be trusted and create safe products, but those products also need to be reliable and predictable. Security has been under attack in the past few months, and consumers are understandably looking for reassurance in new areas.

• To maintain health, consumers aren’t just turning to vitamins and health foods. They are also thinking more holistically about how products satisfy their physical and mental health needs by removing stress and worry, while providing a sense of safety. By providing peace of mind, even the farthest afield categories can help consumers meet their needs for security.

• For example, e-commerce platform Shopify offered security to small business owners to quickly and simply get their inventories online when stores shut down. Look for new ways to build security across categories by reinforcing messages that build and sustain peace of mind within consumers’ overburdened minds.

4. Exploration

• Look for opportunities to mentally transport consumers to new places through stories.

• We satisfy the need for Exploration through both physical and mental exploration. Prior to the pandemic, consumers satisfied their need for Exploration by trying new things, such as visiting new cities, new restaurants, or new retailers, as well as exploring new ideas and solutions through technology and artistic creativity.

• Given that our ability to physically move about has been dramatically reduced, we’re seeing increases in the ways that people can explore from the comfort of home. Many have taken up new hobbies to counteract their ability to explore new places, and activities like cooking and crafting have seen a resurgence.

• Streaming media, reading, and video games have been hugely popular ways for people to gain exposure to new ideas and new worlds without having to leave the safety of our homes. Disney+ has blown past original expectations for subscribers in its first year by releasing fantastical movies like Frozen 2 and Mulan. To meet this need, look for opportunities to mentally transport consumers to new places through stories.

Uncovering more Unmet Psychological Needs and White Spaces

• Online anthropology, a method of advanced social analytics, is an excellent tool for identifying white space opportunities and guiding innovation.

• As humans, we’re very bad at predicting how we’ll feel in the future, a concept known as affective forecasting. Asking people what they think they will do will nearly always result in a more emotional, and more favorable, view of our predicted future.

• We need to understand consumer needs and wants with as little filtering as possible to uncover new, innovative offerings that consumers don’t even realize they are asking for. Fortunately, we have access to a massive database of consumer interests, opinions, preferences, and behaviors on the internet.

• The insights generated by Online Anthropology are applicable across a wide range of business objectives. This brand of advanced social analytics recently helped a bank enable customers to reduce debt by identifying where they get lost in the debt cycle. And at another end of the spectrum, it helped a food brand uncover emerging interest in Keto-friendly foods like almond milk and Greek yogurt before it became a trend.

• Evidence of changing norms is present in unstructured data long before brands know to ask consumers about them.

• Winning in the Mythical New Norm : Planning and Prediction always involve risk taking, but meeting the needs of the post-pandemic consumer represents a huge opportunity.

• By using sophisticated analytical and psychological approaches we are able to mitigate risk and adapt sooner.

• We shouldn’t expect the post-pandemic consumer landscape to look exactly as it did before, because the consumer isn’t the same as they were before.

• Brands that shift their positioning, messaging, and innovation strategies to meet the current and emerging consumer needs stand to gain a sustainable competitive advantage when we all reach the mythical “new normal”.