“There is only one way to survive and thrive when faced with circumstances out of our control and for which we are unprepared: ADAPT.”
― Charles F Glassman
Amid the COVID-19 pandemic of 2020, consumers are doing just that: adapting. Albeit this adaptation is arising differently depending on people’s specific circumstances and the country they live in, there are several similarities and trends that are being observed among the planet as a whole. In a nutshell, people are living more simply and the effects of this consumer behaviour could persist.
- CONSUMER SPENDING
Consumer spending amid this crisis has largely been focused on the basics and necessities of life. A decrease in monthly household income during this time has forced people to do more with less. Between 30 and 50% of consumers globally expect their household income to continue to fall over the next two weeks, while few (less than 10% in most countries) expect an increase. [1] This uncertainty translates into a decrease in discretionary spending and an increase in making do with what we already have at home.
- TIME SPENT
Studies show that consumers are spending their time differently. Most consumers globally expect to spend less time working and more time-consuming entertainment, including digital and video content, news, and social media. [2] People are spending more time with their immediate family or perhaps alone if they are single. Additionally, more time will be spent online connecting with family, friends and colleagues virtually as opposed to dining out, attending shows and hitting various shops and hot spots in person. This shift in the time allocation of consumers could very well awaken people to the benefits of slowing down. More than that, it will have effects on various industries and this may compel them to revaluate how they do business moving forward.
- SPENDING PATTERNS
Concerns around the COVID-19 outbreak offer early signals of spending patterns, particularly for emergency pantry items and health supplies, and we are seeing these consumer behaviour patterns being mirrored across multiple markets. [3] In order to ensure fewer outings to the grocery store, combat the risk of finding empty shelves and maintaining optimal immune health, people are stocking up on items with a shelf life and purchasing more health products than before. COVID has caused consumers to focus more on their health and well-being for two reasons: they have more time on their hands to do so and in hopes of protecting themselves from the current and potential health threats down the road. Shoppers have been buying what they need and what they can get. Given the climate, consumers may reprioritize health, safety, and availability in their consideration of a product. [4] The price they pay will not be as much of a deciding factor.
- E-COMMERCE
The [number] of users venturing into e-commerce will continue to rise. [5] This is supported by the fact that 69% of people surveyed who bought household goods online for the first time during COVID-19, claim that they will do so again in the next 12 months. [6] Lockdown and the fear of contracting this disease are prime contributors to this. With no end date in sight, this trend will definitely continue for the foreseeable future. Even when the pandemic fog has lifted, apprehension may still exist and therefore online purchasing could emerge the new norm.
- EXPECTATIONS OF CONSUMERS
Expectations have changed and attitudes are changing. As a result of panic buying, certain items are out of stock more often. Items are not arriving on our doorstops as quickly as before and people are working from home. This means everything is taking longer to reach us and some services have come to a complete halt. More than 75% of consumers globally expect the impact to be felt for more than two months, and about 50% expect the duration to be for more than four months. [7]
With this new reality looming, here are some pointers for the business owner post-pandemic:
Winging it won’t work. You must start preparing now for the recovery of your business. Seek to understand the situation of your business as a result of the pandemic. Then decide the course of action required to attain the position you want to be in tomorrow.
Consider the following: Are you able to shut down your operations and reopen unchanged after the pandemic; can you make up for lost ground; should you update/venture into e-commerce; consider offering virtual means of dealing with your customers, and preparing your employees to continue working productively from their homes? Re-evaluate your processes and the overall efficiency of how your company runs. Make improvements where possible. Do this all while considering your ‘new’ customer.
In addition to these elements, adopt a futures mentality. Incorporate resilience/pandemic/global crisis planning into the mix. This includes creating pandemic specific policies and procedures to ensure continuity for your most critical services and products. Companies urgently need to improve their agility. Many businesses work in a short-term, reactive way. The best option is to balance your ability to respond rapidly with a clear overall strategy. This will help you decide whether the actions you take are appropriate or not. [8]
Maybe this is a blessing in disguise? This could be a brand new opportunity for an alternate realm of business ventures. You better get planning!
[1], [2], [3], [7] https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/a-global-view-of-how-consumer-behavior-is-changing-amid-covid-19
Accessed April 18th , 2020
[4], [5], [6] https://www.nielsen.com/sg/en/insights/article/2020/covid19-new-norm-consumer-behaviour/
Accessed April 19th, 2020
[8] https://www.infoentrepreneurs.org/en/guides/review-your-business-performance/#3
Accessed April 20th, 2020