THE CAPTIVE ECONOMY: WHAT NEXT FOR THE COVID-19 CONSUMER

 In Business, Consumerism, Customer Experience, Digital Culture, Marketing, Retail

We now live in what I’ve decided to name The Captive Economy – one where we as participants and consumers are limited in terms of how we are to live our lives.

I think its slowly dawning on most of us that things may never quite be the same again. We are entering a new era, one that has no fixed point as its destination. We are like the adventurous explorers of old, except that instead of sailing out hoping to discover exciting new territories, we are just hoping to hold on to our own. None of us have any real idea how this is all going to play out.

As of the date of writing, planet Earth is closed. Well, maybe not closed, but certainly someone has taped a hastily handwritten sign to the window that says “Just popped out. Back in 20 minutes”. Depending on where you live and what state of lock-down you find yourself in, for most life has changed fundamentally over the past 2 to 4 weeks and for the near future. Welcome to the Captive Economy.

The Chinese word for crisis is made up of two characters, one representing danger, the other opportunity. In every significant change (and indeed life) there will be winners and losers, those that will spot opportunity in the chaos and those that will be side-swiped by it.

In terms of losers, significant segments of our economies have been brought to their knees in recent weeks. If the travel industry was a smartphone, it has long since accepted it’s 1’% battery remaining’ message on its screen. Airlines and travel agents will have to wait a few months to find a charging point, and even then, they’ll probably have the wrong charger. Hotels, restaurants, bars, cinemas, theatres, sports events all sit empty. The thousands of other ancillary support businesses that support them also closed. The shutters have come down street by street. We are experiencing an Economic 404 Error – Economy Not Found.

So here are some of my thoughts on how we can make sense of this and what this Captive Economy could mean for us all?

1. Freedom

In Braveheart, who will ever forget the blue painted, kilt clad Mel Gibson screaming ‘…they’ll take our lives, but they will never take our Freedom”. Considering that the concept of freedom is to ‘live your life as you desire’, it seems a rather hypocritical stance to take, to give your life away to be free, but we know what he meant, bless him. Freedom is rather important.

George Michael sang about it. In his 1990 solo hit he certainly foretold the type of freedom we would all be experiencing 30 years later. “… the way I play the game is not the same…”. Well that is certainly true of how we all find ourselves today. Not only have the rules changed, but the game seems barely recognizable anymore.

We live in a culture where doing what one wants, being free to make whatever choices or decisions you desire is normal.  From big things like where you will work and live to small things like what should go in your sandwich or if you should have one last drink before going home (always have one last drink!). Satisfying our desires is inherently who we are. We actively promote and prize personal freedom, as long as the arising consequences fall within the basic rules of society. Freedom is our right. Mandela spent 27 years in prison believing in his.

We have now had to give up certain freedoms, and there are consequences to that. When you confine, or restrain us so that we cannot then freely act upon our desires and live as we would like, bad things can happen.

Take slavery, the ultimate loss of freedom and something that is still part of our modern society through child labour, human trafficking, or forced marriage. Research shows the removal of freedoms in these circumstances understandably results in anxiety, depression and PTSD (why someone had to do research to find out that a woman kidnapped and sex trafficked might be a little anxious or depressed is beyond me). Slavery is not something that disappeared in 1865 in the US. Profits from the global sex trafficking industry are projected at near $100 billion from the 4m adults and 1m children thus enslaved. Slavery is still here.

But back to the topic – for the next few weeks and months, we are all slaves to this virus. There is no Daenerys Targaryen ‘Breaker of Chains’ coming with her dragons. To protect ourselves and the vulnerable, we are put under house arrest. Our freedom is compromised and as such there will be some underlying anxiety and depression less related to the virus threat and more rooted to the removal of such freedoms. The novelty period is over now.

We are likely to see and experience increased mental health issues. We are likely to see people move though the anger and bargaining phases, grieving for their loss of freedom and perhaps taking it out on each other, their employer and the brands they feel should be helping them. The anger and frustration those in call centres or customer facing jobs (think banks, utility companies, broadband providers etc.) will experience will be magnified. The loss of freedom and associated anger may end up directed at a brand, and this, of all times, is when brands need to put their best Customer Experience foot forward. A brand that helps you through these tough times will be in your heart and mind for a long time.

Help your customers regain some of that freedom and communicate with them in a way that shows you understand.

 2. Autonomy

Humans like to be in control, in fact our survival depends on it. When we lose control, when the unpredictable brings danger, we feel weak, exposed. It is why we get scared and react when we lose control, the arising fear driving us to take some action.

Think of the simplest example, something my own now teenagers still do to each other (and I will admit I still do to them too, it’s just too much fun and that’s why therapy exists later in life, right?). You wait as someone is about to come down the stairs / leave a room and you jump out from your hiding space (our more extreme version in the dark, wearing one of the many weird masks we seem to have collected over the years). Most readers have been the target of a jump-scare and I’m sure have all delivered one at some point.

The immediate scream and flailing arms of the victim are in fact an instinctual attempt to regain control. This is fight or flight, the flail and scream designed to either scare off the attacker or to attract help from others. Either way it is an instinctual attempt to control, to do something when confronted with danger. It is what the fight/flight/freeze is all about. Even the freeze is taking control, the cessation of movement hopefully fooling your attacker into thinking you are already dead.

What I’m getting at here is that the need to control our environment is inherent in how we are hardwired.  There is a theory that we have fabricated a low-level anxiety in everyday life now that we all live in cities, where generally most do not see the horizon. In nature, animals like to see a horizon, particularly to see danger coming. It is perhaps one of the reasons we vacation at beaches and escape into the mountains to unwind at a weekend, to see a horizon and to reconnect with what is ‘natural’, what is safe, controllable.

We lived in caves for shelter, we controlled our food supply through agriculture, we built towns and cities with aqueducts, roads, and sanitary systems. In modern times we still seek to control our environments, including our work and personal spaces. The human race is the master of controlling its environment (sadly perhaps to the destruction of both).

In the new Captive Economy, things are out of control. Norms are turned upside down and uncertainty is everywhere. Into this fear comes our instinctual need to control and now that we are all locked-inside, this will likely manifest itself in routines, tasks and purchase behaviours.

DIY stores have had to implement queue management systems at their entrances. Deciding to improve your immediate environment is a natural reaction. To make yourself feel better, to make the walls and garden around you nicer. It is partly just ticking off the tasks that have been on the to do list for a while, but it also nesting, improving your environment, making you feel better, secure in your own space.

This Captive Economy will have us all baking and cooking more (kitchen control), painting walls, digging flower beds and putting together IKEA furniture. Brands that help us all take control, in any aspect of our lives over the next few weeks and months will win. Taking control of our environment, finances, or mental health. Any brand or business that helps us feel in control during the Captive Economy is adding value. If you can’t control the Macro things then you’ll focus on the Micro things.

Whether your relationship will survive that same micro-control, well that’s another issue!

3. Isolation & Loneliness

Imprisonment is also an obvious example of the psychological effect of captivity. While we are all under temporary house arrest, if you look at the stories of those imprisoned against their will long-term, you will see some fascinating psychological coping strategies. You are all familiar with Stockholm Syndrome, the psychology behind the identification with a kidnapper. Prisoners often end up expressing empathy, trust and positive feelings toward their captors, attaching themselves to the very person that is harming them.

When any of us feel threatened in our everyday, it often triggers active attachment behaviours. We look to attach ourselves to those that can help. It might be your parents, partner or friends. Attachment behaviour is a way of coping with the fear.

So how will this play out in our new Captive Economy? The isolation is akin to mild imprisonment, and for many it is just that, house arrest. Just because it is voluntary doesn’t change the feelings of isolation and arising loneliness. Helplessness is often paralysing for victims of kidnapping, and it will be a feeling we will all experience. Helplessness arises as we have not been given an ‘end date’. From this sense of helplessness again comes stress and anxiety.

Cortisol is our stress hormone, increasing blood pressure and decreased immune-system efficiency, which is of course what we need least right now to fight any inbound virus.  Several weeks in, the novelty and memes may no longer have as much of an impact. If we find ourselves looking to attach ourselves to something for comfort and to de-stress, then brands and businesses need to ask what they can do in this space.

Boredom and loneliness can often make us quite materialistic. If feeling anxious and lonely, people often turn to retail therapy. As the famous quote goes, “shopping is often cheaper than a psychiatrist”. Consumers are not getting their usual highs from retail physical interactions right now, feeling anxious and so in the immediate hunt for pleasure, some will turn to shopping. But taking advantage of this is also dangerous.

Next, the UK clothing brand, fell foul of this when they launched their 75% sale online. As their high-street stores were forced to close, they shifted the focus to online to attempt to retain some of the business. Social media saw that sale as taking advantage of the pandemic and putting the warehouse/distribution staff at risk, having already had 2 cases of the virus in their distribution centre. A few days later, they shut down their online store.

There could be very dangerous results for consumers with a gambling mentality. Consumers stuck in their home, seeking a high, may very easily turn to the online gambling products to satisfy their needs. We can all see the dangers in that one. That is a retail therapy that perhaps has less of a place in this Captive Economy serving lonely consumers seeking a high. PornHub.Com, the world’s biggest adult entertainment brand, has temporarily rebranded as StayAtHome.Com, offering its premium services for free worldwide to those trapped in their homes!

For any brand the attachments made in this Captive Economy will possibly have more emotional weight to them than previous ‘transactional’ interactions with customers in the past. Loyalty is often defined as having an ‘emotional tie’ to a brand. Well now is the time to form some of those ties, and it doesn’t need to even be through sales or profit. A relatively new local restaurant (now running just takeaway) has a large “HEALTHCARE WORKERS TAKE OUT FOR FREE” notice in its window. It is located near a hospital and my guess is that in the future many of those benefiting will become loyal customers, as will I having witnessed it.

4. Community

Which leads us nicely to community, a value that is clearly fast becoming a core of the Captive Economy.

Cast your mind back to that psychology module you took once as part of your MBA or degree and you will recall Maslow’s Hierarchy of Needs, the American psychologist who proposed that humans meet a pressing need before moving their attention to the next higher need. We have all seen the famous pyramid with Physiological Needs at the base, followed by Safety, Belonging, Esteem and Self-Actualisation needs at the top. Interestingly this pyramid representation/graphic never appeared in any of Maslow’s own publications, the invention of a publisher years later.

So, if you were to be shipwrecked tomorrow on a desert island (how’s that for social distancing) your pressing need is food, water and shelter. These are basic needs, followed quickly by Safety needs (something Maslow knew lots about, often being chased and had rocks thrown at him in Brooklyn by anti-Semitic groups). You will serve these base needs first. You won’t be spending all your days on the island doing creative sand-art or meditation (more self-actualisation) if you have nothing to eat.

Looking at the Captive Economy through motivation theory it partly explains why panic grocery buying was so fast to kick-in. This is a base human need, to feed ourselves and together with the need to take control, consumers moved fast to meet this need.

Currently the Safety need is holding stable. There has not been any global social unrest requiring significant police intervention. Governments have acted fast and most feel secure and safe in their homes. Employment security has been significantly shaken but again many governments have stepped in quickly to give necessary financial supports. There is a significant threat to our Health safety, but most have taken individual actions to minimise exposure. So, assuming we all feel safe and have enough food, what is the next need we seek to satisfy?

The Love/Belonging need is about friendship, family and intimacy, that human connection we all seek. It is why solitary confinement is so cruel. Humans are social creatures, I guess less so right now. We want to be part of a tribe, a gathering, a community.

In normal times we satisfy that need in many ways. The family around us are our primary tribe, but modern day living often puts significant distance between parents, children and grandchildren. We substitute this original tribe for others – work communities, sport/gym communities and social media communities. We need to feel that we belong somewhere.

Now that we face such uncertainty and danger, community belonging has become even more important to us. We are circling the wagons and it is nice to know that you are part of something. We are seeing community spirit flourish everywhere, from the song-filled balconies of Italy to the streets of many countries applauding the healthcare workers. We are all in this together.

Those overloading on grocery supplies are being publicly shamed on Facebook. Limited resources are being shared in communities, people donating what they have or their time. For every negative story of selfishness or greed there are 10 of communities coming together.

If you are going to succeed in business during the Captive Economy, you better be sure that you communicate authentically and from the heart. This is about community connections, about coming together. If you can harness that sense of community and tap into it, and more importantly contribute, you create value.

Irish Distillers, the makers of Jameson Whiskey, switched their plant here in Ireland from producing and bottling whiskey to Alcohol Hand Gel for the Health Service, even before this became the ‘done thing’. It doesn’t taste as good as Jameson but is more useful for using on your hands. Brands that move to being part of the community solution, beyond ticking the corporate social responsibility box, will resonate with the Captive Economy Consumer.

5. Digital Connection

We have been building a digital reality for many years now, with significant step jumps along the way. As the personal computer bedded in, email became a norm. Then the laptop invaded and the entertainment industry started to shift. Add in social media, Wi-Fi, and the smartphone and we have a digital world that we can sometimes occupy more than the real world itself.

As a cyber behaviouralist, my area of interest has always been our digital behaviours and how these impact on our real-world expectations. For example, as we are now used to waiting only 3-4 minutes for a ride-share or taxi via an app, we also do not expect to queue in the real-world either. Instant is the base expectation.

If we were already on this digital journey before now, we are certainly on it for good now. Without the ability to physically connect with one another or brands, we have all turned to the digital model instead.

While this is nothing new, it does change how we perceive digital. For some it will mean first interactions, and for others a deepening of their digital lives.

For example, the later consumer generations (Traditionalists and Boomers) are being drawn in. My 76-year old mother has ordered her groceries online for the first time. While she will still prefer the store afterwards, I feel having realised it is not as scary as she first thought, I can see her bulk buying once a month online. The 6-7% share of the grocery market for online pre-Covid19 is likely to significantly change now and afterwards, as will subscription box businesses. Industries will need to shift more to digital as consumers increase their use of same.

The 71-year old mother of a friend of mine taught her 6 friends how to crochet over Zoom last week. Think about that. Someone who has never considered herself a ‘digital tutor’ is running a webinar on crochet skills. There is no going back from this. New ways of digital interaction will change consumer expectations for all brands.

The digital revolution came a long time ago but the Captive Economy is going to catalyse the reality for a lot of people. Digital learning will become more normal, as will working from home, or group social interaction via Face-to-Face group WhatsApp and Houseparty calls.  Cooked home food delivery is going to increase as a norm, not a treat. This is going to be one of the biggest NON-TECHNICAL step-jumps of the Digital Revolution.

There have been many technology applications that have been idly awaiting mass adoption. As people are unable to travel, consumers are now beginning to utilise the AR tours many museums have. You can wander inside the Guggenheim Museum in New York using Google Street view. Will VR Travel become less of a novelty and more of a reality?

It is also interesting to see how quickly consumers are losing interest in digital content unless it is unique and value-adding. Over the past 2 weeks, every brand and celebrity craving attention (remember celebrities are brands too) are pushing out digital content, from Insta Live connections to You Tube content. The market is saturated, consumers jaded and cut-through is about to get a whole lot harder.

In this new digital reality, your content has to be so different, so unique, so shareable that the consumers will share it. This is not the time to push out digital content for the sake of ‘doing something digital’. The average consumer, either B2C or B2B, is being bombarded by webinar invites, social WhatsApp calls and Zoom dates.

Digital engagement is something that now requires significant creativity in the Captive Economy.

The Captive Economy Values

So, the consumers have had their freedoms taken away, they feel less in control, isolated, lonely and bored. They yearn to be part of a community and stay connected. Into this space, brands and businesses need to deliver.

Brands need to make the consumer feel more in control, feel that they have freedom to choose, feel more connected, more engaged, feel that they are part of something bigger, an authentic heart-felt community. Do that, and you are relevant today.

Personally, stay safe in this Captive Economy. Eat well. Exercise often. Drink good wine. Meditate. Have really great sex. Read more. Have hot baths or long showers. Burn incense. Write letters to old friends. Play with your children. Learn new things. Bake.

Do things that make you smile every day. It’s all that matters anyway.


[Watch The Captive Economy Video]


To read more about the behavioural psychology of the Captive Economy Consumer, read the previous post here.

Ken Hughes is now acknowledged as being one of the world’s leading authorities on consumer and shopper behaviour, blending his understanding of consumer & cyber psychology, digital anthropology, behavioral economics and retail futurology to explore the needs of the new consumer and predict the changes to come.

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Photo credits: @brucemars, @JC Gellidon, @AdiyaSaxena, @kinga_cich, @MithLensink, @ChristianErfurt,  @GemmaLouiseK, @Zoltan_tasi, @coherty, @rpnickson, @BrunoCervera , @KellySikkeman, @rosebainbridgephotography, @DuyPham, Nicolò Campo (Sipa USA via Reuters), Aidan Crawley (Bloomberg), @WilliamIven, @JohnSnobrich, @Nicjlas_hamann, @PriscillaDuPreez

 

 

 


Ken Hughes is now acknowledged as being one of the world’s leading authorities on consumer and shopper behaviour, blending his understanding of consumer & cyber psychology, digital anthropology, behavioral economics and retail futurology to explore the needs of the new consumer and predict the changes to come.

Book Ken Hughes at your event. Enjoyed this content? Join the 100s of event planners who book Ken to challenge, inspire, delight and energise their attendees.

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