ThinkNow Year End Report 2020
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The 2020 ThinkNow Year-End Report examines the impact of the COVID-19 pandemic, racial injustice, and political polarizations on consumer behavior and attitudes, particularly among multicultural communities. Key findings highlight the need for brands to adapt their marketing strategies to reflect a more inclusive and culturally sensitive approach, especially in messaging that resonates with diverse consumer groups. As the nation moves forward, understanding the nuanced needs of these audiences will be crucial for brands seeking to foster long-term relationships and drive engagement.
ThinkNow Year End Report 2020
- 2. This year has been one of the most polarizing years in recent history. A global pandemic decimated the economy. The murders of Ahmaud Aubrey, Breonna Taylor, and George Floyd sparked a worldwide outcry for social justice. And the presidential election and ensuing calls for recounts and litigation gripped the nation while the world watched. America is coming to terms with its history of racism, a fissure on the heart of humanity that permeates the disproportionate impact of the pandemic on communities of color, galvanizes millions around police reform, and drives record-breaking attendance to the polls. We saw a surge in diversity and inclusion initiatives in public and private sectors in response. Leaders sought out experts to navigate these challenging conversations within their organizations. Terms like “allyship”went mainstream, and workplaces became focus groups on equality. All these events culminate into a complex display of cultural dynamics that influence consumer attitudes and behavior. Our annual year-end report examines the effects of these influences through a multicultural lens to provide actionable insights on key consumer trends to watch heading into 2021. 2
- 3. From impeachment proceedings to the presidential election, emotions at the start of 2020 were high, but unemployment remained low as U.S. consumers braced for a polarizing year in politics. Despite the political sideshow, most Americans were convinced that the economy was stable. Yet, while more Americans (58%) believed that the economy was growing than in 2019 (33%), consumers, in general, were not convinced that the growth would translate into more dollars for their households. But a micro view of the data revealed an energized Hispanic base and less pessimism among Black Americans. Despite this optimism, however, roughly half of the Total Market disapproved of the president. Political and economic optimism was highest among Hispanics, who expected to see an increase in household income in the new year. Hispanics also maintained a positive outlook about the political climate heading into election season. Think the U.S Economy in 2020 Will Be (2019) 34% About the Same as 2019 33% Better Than 2019 18% Worse Than 2019 The U.S. Economy Today (2020) 58% Growing 23% Growing Rapidly 35% Growing Slowly CAUTIOUSLY OPTIMISTIC & POLITICALLY TENSE 3
- 4. A GLOBAL HEALTH CRISIS By mid-January, optimism quickly faded as news of an unprecedented health crisis dominated global headlines. COVID-19 soon took the world by storm, grinding industry to a halt and confining consumers to their homes. As infection rates soared, markets quickly descended into chaos, and millions of jobs were lost, casting a shadow on the once positive economic outlook. In response, marketers adapted by pulling commercials created pre- pandemic and began shifting focus to how brands were helping during the crisis. Brands began reallocating ad spend to digital platforms as marketing paradigms shifted in favor of e-commerce and hybrid in-store and online offerings. Consumers likewise traded their regular routines for digital entertainment and remote work and increased their corporate social responsibility demands. Black and Latino Americans were among the hardest-hit populations, suffering the highest mortality rates and financial fallout from the pandemic. These ongoing disparities have further entrenched pre-existing cultural divides, prompting many marketers to re-evaluate approaches to culturally sensitive marketing campaigns. Now entering the third wave of the pandemic, data suggests the pandemic is actively reshaping cultural attitudes surrounding healthcare, corporate social responsibility, and crisis management. Targeting the new multicultural mainstream will require enhanced segmentation models that focus on deeper cultural insights and cultural fluency. Key impacts include the following: 4
- 5. Total Market Gen Z Age 18-22 Millenials Age 23-38 Geny X Age 39-54 Boomers Age 55-64 % "Very Concerned" About COVID-19 In March, we reported that consumers were engaging in more in-home activities like cooking, shopping online, and streaming online entertainment during quarantine. Consumers also reported cutting back on spending and prioritizing savings. In a follow-up survey conducted in October, Gen X reported being the most concerned about COVID-19 across generations, with Boomers expressing the most concern about mask safety. Hispanics expressed the most concern about the threat of the coronavirus, significantly more than Black Americans and Non-Hispanic Whites. Overall 63% of the general population said wearing a mask was extremely important to curbing the spread of the virus. Rapid Shifts in Consumer Outlook and Behavior Total Market Gen Z Age 18-22 Millenials Age 23-38 Geny X Age 39-54 Boomers Age 55-64 % "Extremely Important" To Wear Face Mask 49% 38% 42% 56% 54% 63% 55% 56% 69% 71% 5
- 6. Renewed Focus on Corporate Social Responsibility and Crisis Messaging In May, we reported that the majority (75%) of consumers thought it was important for corporations to give back to the community during the pandemic. The pandemic’s impact on corporate social responsibility was statistically flat across ethnic segments but varied by age – with Boomers being the most likely to say that corporate investments in social causes had no impact on company perception or interest in their products. Hispanics and women were also likely to share this sentiment. However, half of consumers across age groups felt “we’re in this together” advertising messages were not genuine. Among the most skeptical were technology forward Millennials and Gen Z, 40% of whom believed brands are only showing up during the pandemic to capitalize on the vulnerability a crisis creates. This data suggests that while consumers are placing a higher value on corporate social responsibility, empty messaging without action will not only fall on deaf ears but isolate consumers looking for deeper community connection, prompting them to “break up” with that brand. 6
- 7. Multicultural consumers have expressed stronger negative opinions of brands that depict working from home as a utopian alternative to commuting. Black and Latino consumers are particularly averse to these ads, with only one in five Black Americans and one in six Latino Americans having a work from home option. Many Hispanics live in multi-generational households, which further shapes their reception of marketing messages that fail to address collectivist culture. Brands must offer these consumers solutions beyond social distancing to be competitive. Older, Spanish-dominate Hispanics have been particularly vulnerable during the pandemic, as they rely on "digital sherpas," or bilingual family members, to help them make purchase decisions. Being estranged from these family members has isolated them socially and prohibited them from interacting with brands online that only cater to English-speaking customers. Thus, brands must consider both in-language and in-culture marketing messages to mobilize these consumers to gain buy-in. Culture Shapes Crisis Response 7
- 8. The pandemic has forced millions of business owners to contend with financial loss and permanent closure as a lack of foot traffic dries up funds. Multicultural business owners have absorbed the lion’s share of these losses and have had difficulty securing financial aid from government relief funds and financial institutions. Since March, 91% of Latino have been unable to obtain funds from the federal government’s Paycheck Protection Program (PPP). Hispanic women-owned businesses have been among the hardest hit, which accounted for the country's fastest entrepreneurial growth before the pandemic. To combat stifled income, Hispanic business owners leverage social media and other digital channels to reach broader audiences. By combining virtual benefits like discount codes and coupons with print ads and perks, like curbside pickup or delivery, they entice customers to visit their restaurants and stores. Negative Impact on Multicultural Businesses 8
- 9. During the summer of 2020, the nation clashed with its history of racial injustice. Following the murders of George Floyd and Breonna Taylor at the hands of police officers, activists and citizens alike took to the streets, calling for an end to systemic racism and historic inequality that has plagued the Black community for centuries. Many brands turned to social media to express their solidarity with the Black Lives Matter movement in response. Companies began implementing diversity and inclusion initiatives into workplace training programs. Brands scrambled to reposition themselves as champions of racial equality through inclusive marketing messages and diverse ad campaigns. But younger consumers were quick to call out certain brands for “performative woke washing” - that is, brands who claimed to be progressive but had complicated pasts with race relations. Consumers widely celebrated other brands like Ben and Jerry’s for their long-time stance on criminal justice reform and dismantling of white supremacy. On a larger scale, the momentum from the protests represented the country’s rapidly changing ethnic demographics. As multicultural consumers increasingly become the majority, brands must step up and provide more inclusive marketing messages that address the nuances of these diverse audiences. Gen Z is now the first majority-minority generation and has a total of $143 billion worth of spending power. For brands to connect with them meaningfully, they must invest in deeper multicultural insights that speak to their interests, attitudes, pain points, and passion points. As an industry, to overcome what is being perceived as cultural illiteracy among key demographics, marketers must invest in sampling and segmentation tools that provide more meaningful insights into Hispanic, Black, and Asian American consumer values and behavior. Fielding multicultural data is no longer a “nice to have” it's become a business imperative if brands are to build equity and long- term relationships with multicultural communities. WOKE: THE NATION CONFRONTS ITS PAST 9
- 10. Diversity and inclusion initiatives shift from solely hiring and recruiting metrics into the broader context of culture, product development, and content creation. The benefits of diversifying departmental teams bring the voice of the new mainstream into spaces where marketing decisions are being made. Adding cultural competence to the content creation process ultimately helps boost engagement among multicultural audiences and increase profitability. Diversity and inclusion are part and parcel of “the empathy economy” as consumers look to spend money with brands they feel reflect their values. At the height of racial tensions this year, ThinkNow conducted a study to examine the attitudes and opinions of Black men and police officers about racial bias in policing and proposed solutions. Black men and police officers surveyed considered racial bias in policing a serious problem. Both groups also feel that Americans don't understand the challenges they face, either serving on the frontlines or being born Black males in today's society. To combat police bias, Black men support policies that champion equality, end racism, and promote tolerance. Police are more likely to support policies that encourage community collaboration and extended training. Racial Bias in Policing Racially Biased Policing 77% 81% Black Men Police Officers 14% 19% 5% 5% This is a serious problem in the U.S. This is a minor problem in the U.S. This is not a problem in the U.S. Diversity, Inclusion and the Empathy Economy 10
- 11. Multicultural Consumers are Less Enthusiastic About Being American Cultural identity among Black, Hispanic, and Asian Americans is shifting in the wake of the pandemic and social justice movements. In a study conducted from August 2019 to October 2020, Black Americans experienced the sharpest decline in feeling like they have a strong sense of belonging to the U.S., from 67% last year to 53% this year. Hispanics, on the other hand, saw the smallest decline. With the increased visibility of police-related shootings of unarmed Black citizens, xenophobic attacks on Asian Americans, and disproportionate economic hardship, in general, brands must be sensitive to the struggles of multicultural consumers and speak to their needs. Those that show genuine interest and concern now and put forth long-term commitments for change will be remembered post-pandemic. Closing the Gaps in Multicultural Market Research Social justice movements have also shed light on racial inequalities in market research, particularly in data collection. Current multicultural sampling methods often lack adequate segmentation and pigeonhole ethnic respondents into monolithic groups. Panels are often underfunded and under supported. Underinvestment in attracting, engaging, and retaining multicultural respondents is especially problematic when sourcing hard to research audiences like Gen Z, who make up the majority of multicultural consumers in the U.S. today. To mitigate cultural bias, market researchers must be sensitive to generational and cultural differences when building panels. When surveying non-English speaking panelists, for example, researchers must use translation partners that translate and transcreate surveys to account for cultural nuances. 11
- 12. Earlier this year, we surveyed a representative sample of Americans about their voting preferences. We found that Hispanic, Black, and Asian Americans were more likely to vote for the Democratic presidential nominee in the 2020 election than in 2016. One-third of likely voters said they would vote for the Republican presidential candidate, representing a 9-point decrease from 2016 across ethnic groups. Forty-three percent of likely voters approved of the job Donald Trump was doing as President at the time. Fast track to November 2020. Despite an unprecedented health crisis and economic and social unrest, over 140 million Americans cast their ballot in the 2020 presidential election, marking the highest voter turnout in American history. On November 7, 2020, Pennsylvania officially went “blue,” securing the win for Democrat Joe Biden, now the 46th president- elect of the United States. But many Americans weren’t rejoicing. Two weeks after the official declaration of the Biden presidency, the country found itself embroiled in a heated debate over voter fraud. As of the date of publication, President Donald Trump has yet to concede the election to the President-Elect and is pursuing legal action in several state supreme courts to overturn election results. This election reflects a rapidly evolving electorate. Election results revealed a socially integrated electorate whose political leanings were shaped more heavily by environment than stereotypical racial attitudes, especially among U.S. Hispanics. As Hispanics have become more acculturated, many of their need-states and attitudes have shifted to mirror those of other Americans. Thus, tried-and-true appeals to their collective identity in campaign ads are no longer effective, and more segmented approaches must be applied to get Hispanic buy-in. Overall, many multicultural voters were split along regional lines rather than racial ones this year. As multicultural voters grapple with societal change, shifts in political party affiliation, ideologies, and voting patterns are expected. ON THE BALLOT: THE 2020 PRESIDENTIAL ELECTION 12
- 13. The pandemic and racial injustice have disproportionately impacted multicultural consumers. Marketers must be sensitive to this and show empathy in messaging. Going “back to normal” will look different for everyone, and harder hit demographics may need more time to recover. Understanding the barriers to rebounding from the pandemic and the economic fallout should be a priority for marketing teams as you craft campaigns targeted to multicultural consumers. We have experienced a paradigm shift in the way we think about race in this country, and the charge is being led by consumers, who generally choose who they do business with based on a brand’s response to societal issues. Brand activism around social justice is not resigned to a short-lived hashtag centered around siloed events. It is a sustained commitment to positively impacting social justice issues with transparency on initiatives and results. Those who do it well will affect change in our country and fortify their bottom line. Specificity and authenticity are key drivers moving forward. Classifying consumers by monolithic constructs like Hispanic, Black, or Asian may be used to describe consumers on a high level, but meaningful engagement is reserved for those who are intentional about doing a deep dive into the cultural nuances that make these audiences unique. Intersectionality in marketing is the future – 2021 will show how brands that master this notion will master the post-pandemic economic boom we are poised to experience. With two promising COVID-19 vaccines, 2021 is poised to be the year for literal and metaphorical healing. Experts are predicting we will return to some sense of normalcy in the spring of 2021. So what does this mean for marketers post-pandemic? Here are some things marketers should keep in mind as we prepare for 2021: A LOOK AHEAD TO 2021: 13
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