NEWS23 November 2020

Market research spending hit by pandemic

Covid-19 News Trends UK

UK – UK businesses reduced their spending on market research by 37% in 2020 due to the impact of the Covid-19 pandemic, according to Kantar’s Global business compass.

The study found that 38% of UK firms maintained their investment in market research during the pandemic, with 9% increasing their backing for the industry.

The reductions in market research spending found in Kantar’s research echoed those for other marketing disciplines, with marketing budgets having been cut by 57% on average in the UK in 2020.

The findings are based on a survey of almost 4,500 business leaders across 70 countries, 900 of whom were at executive level. The survey took place between May and June 2020. 

One in three UK business leaders surveyed said they did not think their firm had the right operating model in place to be competitive during the pandemic, with 59% of businesses changing their business model in 2020.

The study found that 20% of businesses grew during the pandemic, and 29% took the opportunity to invest in innovation.

One third ( 37%) of UK business leaders expected their business to be down by 20% or less, while one in five of those leaders expected their business to be down in excess of 40% year-on-year.

The research suggested 65% of UK businesses would invest in e-commerce as a result of the pandemic, with the study estimating that 40% of consumers increased ecommerce spending during lockdown.

Globally, the study found that 57% of business leaders did not expect an economic recovery until 2022, regardless of how quickly a vaccine is delivered in 2021.

The study’s global results also found that 69% of business leaders expected their company to end 2020 in decline, with 45% expecting the company to have lost 20% of pre-pandemic revenue by the end of 2020.

One in three respondents expressed satisfaction with the financial support they received from their national governments.

Some changes in consumer behaviour established in pandemic were also expected to remain after Covid-19, with 90% of those surveyed expecting this to be the case. The study found 64% of companies expect to have to fundamentally overhaul their long-term strategic priorities.

Rosie Hawkins, chief innovation officer at Kantar, said: “We see leaders taking steps to understand and explore the spaces for innovation in their business to drive recovery; evolving their business models, innovating in their portfolio to address new found habits and consumption patterns, reinventing routes to market and reimagining the customer experience in a digital environment.

“We also expect to see more business leaders recognise the importance of purpose-led strategy and the role of sustainability in their operating models to ensure that they continue to remain relevant to a customer base whose expectations of brands are significantly increasing.”

@RESEARCH LIVE

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