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The COVID-19 pandemic has fundamentally changed the world as we know it. People are living differently, buying differently and in many ways, thinking differently. The virus is reshaping the consumer buying behaviours rapidly and research proves that even after this pandemic ends, its impact will still remain intact in the minds of consumers.
Consumer behaviour has changed drastically, apart from people going online, brand loyalty is loosing its value, people are choosing locals over their brands. Healthcare products apart from masks and sanitizers have seen a rapid surge and many more changes that have given the buying pattern of consumers a new look.
New and Everlasting Shopping Habits
The outbreak has pushed consumers out of their normal routines. Consumers are adapting new habits and behaviors that many anticipate will continue in the long term.
The virus has accelerated five long-term trends:
1.The Boom of 'E-Commerce'
The coronavirus pandemic has paved the way for various digital platforms. What can be seen is a shift in where consumers are spending, more towards e-commerce. According to a recent study by Absolunet, e-commerce sales have doubled for Canadian merchants since March 11 – the day the World Health Organization announced COVID-19 as a global pandemic.
Following the COVID-19 pandemic, it is predicted that consumers will be slow to come back to brick-and-mortar retailers and majority of the business will continue to go to the big e-commerce players like Amazon.
Some of the key consumer behaviour changes which prove the growing dominance of the e-commerce platform, according to a survey by NRF are:
- 9 in 10 consumers have changed their traditional shopping habits
- More than 50% of consumers have ordered products online that they would normally purchase at the store
- Nearly 6 in 10 consumers say they are worried about going to the store due to fear of being infected
While some of these changes are no doubt temporary, others are permanent. As the community moves beyond the survival mode, the digital-adoption momentum is likely to carry forward and become permanent.
This dramatic change is due to two main reasons:
- The reluctance to mingle in crowded public places.
- Higher propensity for digital adoption.
Online purchasing will continue to be a prominent channel for consumer buying going forward. Brands and organizations that haven’t historically been easily available online must rapidly adapt to the “new normal” or they won’t survive. The e-commerce market in India is set to grow at a compound annual growth rate (CAGR) of 19.6% between 2019 and 2023. According to Global Data, a London-based data analytics firm, India’s e-commerce market is expected to rise by ₹7 trillion by 2023 owing to this pandemic.
2. A Rise in Conscious Consumption
Consumers are more mindful of what they’re buying. Overall, 56% of consumers prefer to spend less and are only buying what they need given the current landscape. They are striving to limit food waste, shop more cost consciously and buy more sustainable options.
Isn’t it obvious that with limited purse, one won’t be buying the luxury cosmetics and things that can be avoided? Luxury purchases are likely to decline significantly as consumers continue to reduce their discretionary spending. However, people will continue to spend above-average amounts on products related to disease prevention, pandemic prevention, health, food and medicine.
In the weeks following the ‘Janata curfew’, sales of all categories of consumer goods were impacted. Certain categories such as beverages and confectionery were wiped out, but few categories such as packaged foods and commodities are weathering the storm better. Brands will need to make this a key part of their offer in order to sustain in the new market condition.
3. Growing Love for Local
In these tough times, when all the malls are shut and the departmental stores locked, the local kirana stores proved to be a blessing in disguise for each one of us. The desire to shop local is reflected in both the products consumers buy (e.g. locally sourced artisanal) and the way they shop (e.g. supporting community stores). CPG brands will need to explore ways to connect locally – be it through highlighting local provenance, customising for local needs or engaging in locally relevant ways.
As PM Narendra Modi also requested the nation to trust their local kirana stores in this tough time and coined the phrase “Vocal for Local “. This highlights the rise of kirana stores in this lock down. Despite the proliferation of big FMCG brands and swanky supermarkets, the humble kiranas have continued to hold sway in India during the pandemic. Local brands and Indian kirana stores have shown resilience, with recovery of almost 65 percent by the third week of the lockdown.
More than ever, brand loyalty is a low priority for consumers as product availability is of the highest importance. 40% of consumers say they would purchase from a less familiar brand if their first choice was unavailable rather than wait until the product is restocked, paving way for the local stores to enter our shopping world.
4.The Ever Increasing Focus on Health
Its not just sanitizers and soaps consumers will expect hygiene in the supply chain and a transparency in hygiene benefits of most products. Brands which are able to build consumer confidence in this area with relevance will benefit. Business models will pivot and brands are expected to bring out new variants to fulfill this need.
Products in the personal care space could also experience increased consumer interest as will air & water purifiers and other advanced “epidemic prevention products”. Consumer Packaged Goods (CPG) brands should heed this change and make it a priority to support healthy lifestyles for consumers, shoppers and employees. Having a “health strategy” will be a strategic differentiator for the foreseeable future.
5.Brands Are Being Held to a new standard
More than ever, brand loyalty is a low priority for consumers as product availability is of the highest importance. 40% of consumers say they would purchase from a less familiar brand if their first choice was unavailable rather than wait until the product is restocked. Studies have indicated they want to hear from brands about how they are operating during these uncertain times and it’s clear that current and future consumer buying decisions will be affected by how brands respond to the COVID-19 crisis.
Consumers expect brands to shift their business priorities and resources to appropriately respond and adapt to current challenges, even if it translates to suffering significant economic losses. Unsurprisingly, consumers expect brands to produce products that aid consumers with today’s challenges and communicate transparently to stakeholders.
Beyond these expectations, consumers want companies to further support the crisis by donating a portion of sales to local hospitals and/or partnering with other brands to maximize the impact of their efforts. Greater media consumption, especially online video content is predicted to have staying power post-pandemic. Brands should consider new ways to reach audiences online, such as through TikTok or YouTube, depending on target audience demographics.
Written By - Siddhi Khandelwal
Edited by - Arnav Mehra
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