Covid-19 impacted individuals, businesses and economies across the globe.
However, recent studies have shown that the pandemic hasn’t broken the pre-existing trend of prosperity for premium brands in both developed and developing markets. It has even increased, though there are some geographical differences.
Ipsos tracking experts noticed a tendency for consumers to splurge on more premium brands during the pandemic as they were not able to eat and drink out as often as before. Premium wines, ice creams and frozen food have seen an increase in demand and have enjoyed a growth in sales.
Cooking more often at home, people have tried new brands that are sometimes more expensive and different to those they would normally consider.
A long-term view of our database confirms the increasing power of premium brands to ignite consumer desire, not only in consumer goods or in developed economies, but across many categories and markets.
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While we can learn from some categories that have successfully created and nurtured premium brands, others seem to occupy more challenging territories in which to build and defend premium offerings.
It is evident that a premium strategy can still be successful as many consumers appear to be more willing than before to pay for such brands.
Of course, many ongoing questions remain: are some consumers totally immune to scaling back their shopping habits, regardless of the wider economic situation?
Should we expect long-lasting uncertainty in the global economy because of the pandemic?
Will new societal norms and new consumer rituals emerge, causing people to buy differently; for example, fewer or cheaper brands?
Will people adopt evolving premium shopping patterns in relation to trade disruptions (such as buying less but more expensive brands)?
Our brand tracking work and the deeper investigation have revealed that it is possible to better understand the conditions, factors and rules that will guide premium brands to successfully win the hearts of consumers in the years to come.
This trend is clearly reflected in our database as the average number of brands purchased or considered by consumers across categories went from an average of 4.5 in January to 5.7 in May 2020 (+27%).
We also know that in times of crisis, consumers are potentially less willing to choose brands that are less familiar with. People can be generally prepared to pay more for brands that they trust and are confident can deliver on their promises.
Associated with greater perceived quality, premium brands paradoxically don’t pose as much of a risk when times are uncertain, even if disposable income could be under pressure.
A premium position can be supported by two main pillars: perceived functional superiority and emotional value, which increase brand desire.