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The Financial Express

Effect of Covid-19: How consumer behavior will be changed

| Updated: February 01, 2021 22:13:51


Effect of Covid-19: How consumer behavior will be changed

As the world begins its slow pivot from managing the COVID-19 crisis to recovery and the reopening of economies, it’s clear that the period of lockdown has had a profound impact on how people live. The period of contagion, self-isolation, and economic uncertainty will change the way consumers behave, in some cases for years to come. The new consumer behaviors span all areas of life, from how we work to how we shop to how we entertain ourselves. These rapid shifts have important implications for retailers and “Consumer-packaged-Goods” companies. Many of the longer-term changes in consumer behavior are still being formed, giving companies an opportunity to help shape the Next Normal.

 

New consumer behaviors will transform the industry's future

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. Supply chains have been tested. Retailers are closing doors. Consumers across the globe are looking at products and brands through a new lens.

The virus is reshaping the consumer goods industry in real time, rapidly accelerating long-term underlying trends in the space of mere weeks. Research indicates that new habits formed now will endure beyond this crisis, permanently changing what we value, how and where we shop, and how we live and work.

Even as this crisis continues to evolve, by exploring the changes that are happening now, we can consider what consumer goods businesses should do today to prepare for what’s next.

Getting to know the consumer in crisis

Consumers are deeply concerned about the impact of COVID-19, both from a health and economic perspective. People are responding in a variety of ways and have differing attitudes, behaviors and purchasing habits. People across the globe are afraid as they strive to adapt to a new normal. Fear is running high as individuals contemplate what this crisis means for them, but more significantly, what it means for their families and friends, and society at large.

Consumers are responding to the crisis in a variety of ways. Some feel anxious and worried, fueling panic-buying of staples and hygiene products. At the other extreme, some consumers remain indifferent to the pandemic and are continuing their business as usual, despite recommendations from government and health professionals.  Companies will need to understand how their own consumers are reacting, and develop customized and personalized marketing strategies for each. The days of one-size-fits-all marketing are over.

 

New buying behaviors in this new normal

Why, what and how consumers buy is changing due to the COVID-19 outbreak? Consumer priorities have become centered on the most basic needs, sending demand for hygiene, cleaning and staples products soaring, while non-essential categories slump. The factors that influence brand decisions are also changing as a "buy local" trend accelerates. Digital commerce has also seen a boost as new consumers migrate online for grocery shopping – a rise that is likely to be sustained post-outbreak.

In times like these, our need for the basic necessities of life takes precedence. It comes as no surprise that personal health is the top priority for the consumers we surveyed, followed by the health of friends and family. Food and medical security, financial security and personal safety were other leading priorities.

The social impact

 

The COVID-19 outbreak has slowed the pace and changed daily life for many consumers, and this is having a profound impact on the way we view personal hygiene, health and how we engage with our communities, friends and families. People are embracing technology more than ever to support all aspects and consequences of isolation. There is also positive evidence to suggest that this crisis will build communities, rather than separate them.

The ways in which people spend their leisure time are changing because of the outbreak and related social distancing measures, and again, these habits are likely to be sustained. More than half (61%) plan to continue watching more news after the outbreak, while 55% will prioritize more time with family. Entertainment, learning and DIY have also seen a rise.

This trend is reflected in the types of apps that consumers are downloading, related to entertainment, news, healthcare and education. Underlying consumer needs (e.g. to connect, to be entertained, to learn, to be informed) remain the same, yet technology is changing the way it happens. Companies must increase their focus on digital vs. traditional tools to engage with consumers and improve experiences.

A new virtual workforce

People are working from home as businesses close doors and encourage remote work. Many employees who have not worked remotely before—or not often—plan to do so more frequently in the future. High percentages of employees feel they have the right environment and tools for remote work, but some miss social contact. Overall, employees feel their employers have taken the right steps to protect their health and keep them well informed.

Employees who now find themselves working from home are broadly positive about the experience. Unsurprisingly, those who worked from home previously are more likely than newcomers to feel they are more productive at home and feel they are more professionally satisfied than they are in the office.

 

Staying connected with consumers

 

COVID-19 is a health and economic crisis that has a sustainable impact on consumer attitudes, behaviors and purchasing habits. Consumer Packaged Goods companies can adapt to these changes by taking action to respond, reset and renew to be positioned even stronger for the future.

 

As the Covid-19 pandemic continues to rein havoc on our lives, we still hope that somehow things will get back to how they were before. However, no matter how much we yearn for that normalcy, some business aspects will change forever. Businesses should understand this and start working on adaptability to the new normal.

-rmc/

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