How COVID-19 may change Market Research

Business life is changing as COVID-19 spreads in the US and the world. In the market research and insights field there will be both short-term and long-term effects. It is important that clients and suppliers begin preparing for them.

This has been a challenging post to write. First, in the context of what many people are going though in their personal and business lives as a result of this disruption, writing about what might happen to one small sector of the business world can come across as uncaring and tone-deaf, which is not the intention. Second, this is a quickly changing situation and this post has been rewritten a number of times in the past week. I have a feeling it may not age well.

Nonetheless, market research will be highly impacted by this situation. Below are some things we think will likely happen to the market research industry.

  • An upcoming recession will hit the MR industry hard. Market research is not an investment that typically pays off quickly. Companies that are forced to pare back will cut their research spending and likely their staffs.
  • Cuts will affect clients more than suppliers. In previous recessions, clients have cut MR staff and outsourced work to suppliers. This is an opportunity for suppliers that know their clients’ businesses well and can step up to help.
  • Unlike a lot of other types of industries, it is the large suppliers that are most at risk of losing work. Publicly-held research suppliers will be under even more intense pressure from their investors than usual. There will most certainly be cost cutting at these firms, and if the concerns over the virus persist, it will lead to layoffs.
  • The smallest suppliers could face an existential risk. Many independent contractors and small firms are dependent on one or two clients for the bulk of their revenue. If those clients are in highly affected sectors, these small suppliers will be at risk of going out of business.
  • Smallish to mid-sized suppliers may emerge stronger. Clients are going to be under cost pressures due to a receding economy and smaller research suppliers tend to be less expensive. Smaller research firms did well post 9/11 and during the recession of 2008-09 because clients moved work from higher priced larger firms to them. Smaller research firms would be wise to build tight relationships so that when the storm over the virus abates, they will have won their clients trust for future projects.
  • New small firms will emerge as larger firms cut staff and create refugees who will launch new companies.

Those are all items that might pertain to any sort of sudden business downturn. There are also some things that we think will happen that are specific to the COVID-19 situation:

  • Market research conferences will never be the same. Conferences are going to have difficulty drawing speakers and attendees. Down the line, conferences will be smaller and more targeted and there will be more virtual conferences and training sessions scheduled. At a minimum, companies will send fewer people to research conferences.
  • This will greatly affect MR trade associations as these conferences are important revenue sources for them. They will rethink their missions and revenue models, and will become less dependent on their signature events. The associations will have more frequent, smaller, more targeted online events. The days of the large, comprehensive research conference may be over.
  • Business travel will not return to its previous level. There will be fewer in-person meetings between clients and suppliers and those that are held will have fewer participants. Video conferencing will become an even more important way to reach clients.
  • Clients and suppliers will allow much more “work from home.” It may become the norm that employees are only expected to be in the office for key meetings. The situation with COVID-19 will give companies who don’t have a lot of experience allowing employees to work from home the opportunity to see the value in it. When the virus is under control, they will embrace telecommuting. We will see this crisis kick-start an already existing movement towards allowing more employees to work from home. The amount of office space needed will shrink.
  • Research companies will review and revise their sick-leave policies and there will be pressure on them to make them more generous.
  • Companies that did the right thing during the crisis will be rewarded with employee loyalty. Employees will become more attached and appreciative of suppliers that showed flexibility, did what they could to maintain payroll, and expressed genuine concerns for their employees.

Probably the biggest change we will see in market research projects is to qualitative research.

  • While there will always be great value in traditional, in-person focus groups , the situation around COVID-19 is going to cause online qualitative to become the standard approach. We are at a time where the technologies available for online qualitative are well-developed, yet clients and suppliers have clung to traditional methods. To date, the technology has been ahead of the demand. Companies will be forced by travel restrictions to embrace online methods and this will be at the expense of traditional groups. This is an excellent time to be in the online qualitative technology business. It is not such a great time to be in the focus group facility management business.
  • Independent moderators, who work exclusively with traditional groups, are going to be in trouble and not just in the short term. Many of these individuals will retire or look for work elsewhere or leave research. Others will necessarily adapt to online methods. Of course, there will continue to be independent moderators but we are predicting the demand for in-person groups will be permanently affected, and this portion of the industry will significantly shrink.
  • There is a risk that by not commissioning as much in-person qualitative, marketers may become further removed from direct human interaction with their customer base. This is a very real concern. We wouldn’t be in market research if we didn’t have an affinity for data and algorithms, but qualitative research is what keeps all of our efforts grounded. I’d caution clients to think carefully before removing all in-person interaction from your research plans.

What will happen to quantitative research? In the short-run, most studies will continue. Respondents are home, have free time, and thus far have shown they are willing to take part in studies. Some projects, typically in highly affected industries like travel and entertainment, are being postponed or canceled. All current data sets need to be viewed with a careful eye as the tumult around the virus can affect results. For instance, we conduct a lot of research with young respondents, and we now know for sure that their parents are likely nearby when they are taking our surveys, and that can influence our findings for some subjects.

Particular care needs to be taken in ongoing tracking studies. It makes sense for many trackers to add questions in to see how the situation has affected the brand in question.

But, in the longer term there will be too much change in quantitative research methods that result directly from this situation. If anything, there will be a greater need to understand consumers.

Tough times for sure. It has been heartening to see how our industry has reacted. Research panel and technology providers have reached out to help keep projects afloat. We’ve had subcontractors tell us we can delay payments if we need to. Calls with clients have become more “human” as we hear their kids and pets in the background and see the stresses they are facing. Respondents have continued to fill out our surveys.

There is a lot of uncertainty right now. At its core, market research is a way to reduce uncertainty for decision makers by making the future more predictable, so we are needed now more than ever. Research will adapt as it always does, and I believe in the long-run it may become even more valued as a result of this crisis.

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