Consumer behavior has shifted rapidly since the advent of the Covid-19 pandemic. This reflects the uncertainty of the times and can be expected to continue for a while. Various studies and surveys are being conducted by organizations to assess consumer sentiment and broad trends that will have longer-term implications for businesses.
Understand your customer in the new normal
Consumers today are highly concerned about the pandemic and are responding in different ways through their spending habits, daily and work routines. People are adapting to the new normal in a somewhat fearful state of mind, as they assess the impact on their lives and the economy. Some are motivated to take immediate action, like panic buying and hoarding of staples while others are trying to maintain their regular routine, despite the change in the environment. Businesses therefore will have to assess how their own customers are reacting to the situation and develop customized strategies to reach them and ensure their loyalty.
The retail industry is being rapidly reshaped by the pandemic, but other industries are not exempt. Accenture’s recent study indicates that new habits formed by consumers now will continue to influence shopping behavior after the pandemic, leading to a permanent revaluation of how we shop, live, and work.
There are some broad trends across the board that indicate that consumer behavior has changed for the medium to long term. Personal situations like the need for social distancing and financial security are influencing consumers’ buying behavior. People are staying at home as far as possible, limiting socialization in the interest of health. This has also led to a rise in home cooking, as well as home improvement activities, according to the Accenture study. They also reported they were interested in reducing food waste, and shop more sustainably and would like to continue going forward.
The survey also revealed that work from home is still popular, with over 86% of consumers reporting that they plan to continue working at home for the next few months even if offices are reopening.
Faced with financial uncertainty and changes in daily routines, consumers are being mindful about their spending, often preferring to opt for the lesser expensive brand instead of paying a premium on expensive brands, reports McKinsey in their new survey across 45 countries. For example, from India, 61% of consumers reported that they were more mindful about where they spent their money, 45% said that they were changing to less expensive products to save money, and 40 % said that they were actively researching brand choices before making the decision to purchase. Further, 50% of Indian consumers said they would shift their spending to essentials like grocery and household supplies and reduced spending on discretionary categories.
Digital and omnichannel commerce on the rise
During the pandemic, many customers were forced to shop online for the first time. They report that they plan to continue to do so in the future. Even in markets that have a fairly high percentage of online customers like in the US and UK, e-commerce continues to grow across all product categories.
Other digital and contactless services such as take-out, drive-through services, and home delivery services are being increasingly adopted, and are likely to continue after the pandemic.
The pandemic also accelerated the pace of digital adoption in general, not just for shopping. There is an increase in respondents across surveys who have stated that they are interested in increasing their use of technology such as voice-activated digital assistants, wearables, recommendation apps, and intelligent home devices.
Health and safety come first
Customers now are more safety-conscious when they decide where to shop in person. They are looking for retailers and businesses who show a commitment to enforcing safety measures such as limiting crowds and enhanced cleaning. 51% of Indian customers in the McKinsey survey mentioned that they would buy more from companies and brands that have healthy and hygienic packaging, while 45% stated they would prefer buying from companies that demonstrated care and concern for the health and safety of their own employees.
Globally, as businesses look for ways to survive the pandemic, they can look to their customers to get an understanding of how to serve them best. By examining local and global trends, business owners can pivot to the need of the hour and in doing so, can not only hope to stay relevant but also gain a competitive edge.