Post Covid: The New Social Contract
As we look forward to a post-pandemic world, the extended amount of time that we’ve spent living with Covid-19 has fundamentally reshaped many aspects of our society and culture. As a society, we are moving forward, and more than ever, people want to move forward on their own terms. Each of us is now asking ourselves – why go back to the status quo, whether it is long commutes, crowded trains, long wait times — jobs that don’t pay enough, or schools that cost too much? The pandemic pushed each of us to reflect on what should remain of the old social contracts we lived by in the “Before” times.
Last year was more than an acceleration of new technologies like Zoom and Peloton, but an acceleration of an already fragmented culture, fueled by media and politics, breaking our old social contracts. The pandemic was the last straw with businesses closing, joblessness claims reaching the highest level recorded in our history, and travel coming to a standstill. Political divisions divided the country. Inequities and racism came into full focus led by BLM, Stop Asian hate, and MeToo movements. New political and social groups mobilized. As a nation we reached a boiling point: Last year there were approximately 22,000 reported cases of protests and riots, and according to the ACLED group there were 21 contextually important events that contributed in some way or another to the future of our nation.
Perhaps there is no new normal, but we, as a society, are now transitioning back to our routines under new terms and conditions. Social contracts have always played a significant part in our lives. These are things we’ve come to accept as norms, and shaped our lives, our expectations, and how we interact with each other. They influence our actions, like buying certain brands, shopping at certain stores, choosing certain schools, pursuing certain careers, choosing certain mates, and living in certain places. But last year a lot of these expectations were thrown out the window, and the very social contracts that we’ve come to rely on and accept were broken by two major forces at play: fragmentation and transformation.
These two forces have changed how we interact with our employers, brands, communities, and ourselves. While we will learn a lot over the next few months about what the future holds, especially in the wake of new variants, we are already seeing consumer behavior trends emerge focusing on intentional living, forming what we’re calling The New Social Contract.
One of the prominent effects of the pandemic is the collective realization that we all need community. We are not meant to be isolated beings but rather social ones. What used to be more of a concern associated with aging, Covid-19 has now accelerated the importance of community. Combined with the trend of remote work, many people have relocated, whether for lifestyle, cost of living, or family. As many consumers rebuild their lives in some cases from scratch — with new cities, new jobs, new technologies — they are creating their own New Social Contracts around when and how we work and the importance of health, wellness, and community. We believe that the next chapter in our lives is going to be more purpose-driven and the long-term impact from 2020 will be a focus on Intentional Living.
Two of the hallmarks of this shift to Intentional Living can be seen in where and how we work — and new attention to mental health and wellbeing.
A Continuation of WFH
As the delta variant pushed back return-to-work transitions for many corporations this summer and fall, more and more workers are becoming used to the flexibility of working from home and are stating a preference. In fact, 52% of people are still working from home and 61% prefer to work from home. In the last year, we have seen the effect of consumer trends as people pivoted to the home as their main hub for work, life, and play. Lowes and Home Depot benefited significantly from the lockdown, reporting a 20% and 23% increase in sales in 2020, respectively. Given the enthusiasm for remote and hybrid work, we anticipate the consumer trend to reflect a permanent shift in the need for a home office and the tools necessary to work remotely from home.
Prioritizing Mental Health and Wellbeing
The isolation imposed by the pandemic unleashed another pandemic, one of loneliness and mental illness. Research shows that social isolation and loneliness are devastating for physical and mental health. According to the US Centers for Disease Control and Prevention, between August 2020 and February 2021, the number of Americans saying they had experienced symptoms of anxiety or depression in the previous week increased from 36% to 42%. In addition, there is a growing backlog of preventative care and medical treatment that will need to be addressed. Based on a CDC study last year, 41% of US adults delayed or avoided medical care completely, including urgent and emergency care.
After a physically and mentally exhausting year, consumers are focused on their health right now. They are looking to brands to help them prioritize it, particularly in food and beverage. In addition, with this backdrop, Consumer, Health, and Technology are converging with the consumer at the center of their own health care. As an example, telemedicine grew by almost 40 times in 2020.
As one of the major consumer categories, we anticipate a shift in consumer behavior toward health-focused food & beverage. While the pandemic kept us home eating frozen pizza and Cheetos for the better part of a year, the pandemic also magnified health conditions such as diabetes and heart disease. We believe consumers will focus on healthy eating, specialized diets, and weight loss programs as they deal with the effects of habits created during the pandemic. An estimated 42% of Americans gained on average 29 pounds during COVID.
One food and beverage trend that will likely stick post-pandemic is the emphasis on convenience. Amazon, Walmart, Instacart, Kroger, and other major grocers have fundamentally changed their supply chains and are delivering to our doors, and we do not see people shifting their behaviors back post-pandemic. In addition, the pandemic has loosened a lot of the regulation around shipping and carrying away alcohol, creating a rise in alcohol e-commerce (e.g., Drizly) that we think will be permanent.
Brand Purpose & Values
COVID-19 put a spotlight on our universal need for connection and community. Many solutions proved to be insufficient at a time when technology became the primary tool for human connection, particularly in light of the fragmentation in media and politics. Consumers moved away from brands that didn’t share their values. From a recent survey at Deloitte, out of 2,500 global consumers in April, one in four people strongly agreed that they walked away from brands they believe acted in self-interest.
During this past year, consumers have been experiencing a metanoia - a turning point caused by the pandemic. As social causes came into the limelight, consumers were starting to grapple with the kind of social contribution they expected from brands they support economically. The challenge for brands in this backdrop is to grow with consumers. Bringing the “why” to brand purpose can unlock creativity, inspire employees, and create differentiation by building an emotional connection with consumers—at a time when a connection is much needed.
Consumers have now embraced themselves, new habits, and had a lot of time to reflect. The challenge now is that with this heightened sense of fragmentation, brands will have to work that much harder to tap into higher-order, universal human desires to authentically connect with their customers.
Consumers have had enough of companies that talk the talk but don’t walk the walk. They’re looking for brands whose actions align with their words, and positively engage with their community. An EY survey found that 69% of consumers believe brands should positively change the world, particularly when it comes to sustainability. This issue has become front and center for many consumers recently. Consumers want to engage with brands that are eco-friendly and sustainable. A staggering 76% of consumers indicate that they are proactively seeking out brands and products that are made sustainably.
After experiencing growing fragmentation in our culture and society, consumers are now looking at brands through a new, more intentional, lens. As brands converge to be a reflection of our values, we want to feel good about what we consume. In a survey by PWC 76% of the consumers responded they would end relationships with businesses if they were treating their employees, customers, and environments poorly—a statistic that all brands should be aware of going forward.
The New Social Contract
While there is still much uncertainty around the pandemic and return to work, we have already seen what we believe to be fundamental changes to our pre-pandemic way of life. Whether it is a focus on improving the home as the default physical space or a focus on health and wellness after a period of health anxiety and deferring care, we are all emerging from the pandemic with new perspectives. Despite its challenging origins, the New Social Contract will prove to be a net positive development as consumers focus on living with intention and support brands that reflect their values.