Covid -19 has changed the world as we knew it.
The pandemic has disrupted nearly every routine in our day-to-day lives. The extent and duration of mandated lockdowns and home isolations have forced people to give up some of their most deeply ingrained habits—whether it is taking the kids to the park, going for a workout in the gym or travelling to work in a congested bus or train.
With unlocks being announced across the globe and offices slowly reopening, we are entering the world of many new normals - of blended teams, remote work, virtual work environments, and more.
Even organizations have had to rethink their earlier focus from profitability & growth to sustenance and resilience. It is like the whole world is in survival mode. Amid these myriad changes, the customer’s buying patterns are also changing. The average employee today is wading through uncharted waters - while carrying the uncertainty of his next payslip. This is affecting the way they consume and spend their expendable income.
Hence, organizations need to align to these changing trends. What was once in demand, could no more be relevant. As this is a new situation for everyone, historical data on consumer behaviour and markets might not be of much relevance either. This is the time for organizations to be agile and adapt quickly, just to stay in the game.
New buying behaviours in the new normal:
The pandemic has shifted perspectives in these aspects:
1. A strong shift in focus on health
: There is a profound impact on the way we view personal hygiene, health, and how we engage with our communities, friends, and families. With our Prime Minister, Narendra Modi drilling the credo, ‘ Jaan hai to jahaan hai
’ into the active consciousness of the nation, survival has become a precursor of life. This kind of priority and thinking is likely to take precedence over everything else for the foreseeable future. Taking a cue from this, researchers predict that the personal hygiene market is expected to reach US$15 Bn by 2023 in India
According to The International Food Information Council’s 2020 Food & Health Survey
, 54% of all consumers, and 63% of those 50+, care more about the healthfulness of their food and beverage choices in 2020 than did in 2010; healthfulness is the biggest mover, more so than taste and price.
Based on this shift in mindset, here are some trends we can look out for:
- Switch to reliable brands: Research shows that 77% of consumers intend to make more attempts to stay healthy in the future. For example, according to PepsiCo, India, with heightened awareness around health and hygiene, there is a switch from unpackaged to packaged products that stand for safety and reliability.
- Focus on gut health & immunity: Globally, 57% of consumers report being more concerned about their immunity as a result of COVID-19.
- Switching to plant-based food: Many people are ditching meat and are preferring a more healthy plant-based diet. In the U.S., 18% of alternative protein buyers purchased their first plant-based protein during COVID-19, and 92% of those first-time buyers report they are likely to continue purchasing meat alternatives. In Germany, the U.K., and the Netherlands, 80% of consumers state they are likely to continue eating plant-based meat alternatives beyond COVID-19.
Brands need to hear this message and use it in their products, services, and packaging to appeal to the changing consumer. Having a ‘health’ angle /strategy to your product or service can be a differentiator for the foreseeable long run.
2. Switching to conscious buying
: People have become more mindful of their buying behaviours. They are looking to prevent waste, finding sustainable and low-cost options. In most countries, consumers intend to continue shifting their spending to essentials, while cutting back on most discretionary categories. Covid is changing consumer behaviours rapidly and in large numbers. The consumer is the one dealing with pay cuts and insecurity about his job. Consumers today are expecting a large negative impact of Covid on the economy and longer periods of financial instability. This is pushing them to shift their spending largely to essentials while cutting back on discretionary spending
According to Accenture’s ‘COVID-19 Consumer Pulse Research’
that surveyed 2,500 consumers in India between March and June (among 45,000 globally), 85 percent of consumers in the country said they shopped more health-conscious while 85 percent said they were focused more on limiting food waste.
3. Supporting local & organic products: There is a growing trend in consumers preferring local produce, and organic alternatives.
In most countries, consumers also express strong preferences for local brands over international ones, across all categories. For instance, in Australia, more than 80 percent say their preference for local brands has increased since before the outbreak began, while in China—a country where foreign brands have had a historically strong reputation—only 43 percent say they have a greater preference to buy from these brands.
As per an Assocham study, the Indian organic market stood at a little over Rs 1,200 crore last year. This year the market is expected to cross Rs 2,000 crore
. There is a clear preference for pesticides free and chemicals free produce. Not only in India, but this trend is also spreading globally. As per APEDA statistics, Indian organic exports were Rs. 5,151 crore last year. They are expected to double in the year ahead.
4. Going viral on virtual
: With people working from home, and offices and school-going virtual, there is an increasing demand for digital products and virtual environments. 46% of people
who never worked from home previously now plan to work from home more often in the future. As a result, there is an increase in sales of gadgets and products like laptops and tablets. For example, a household that could make do with one family computer now needs more now.
This is well illustrated in the recent sales numbers of Amazon Prime Day
. Digital Commerce 360
estimates that despite the pandemic, Amazon Prime Day 2020 sales hit $10.4 billion – up from $7.16 billion (+45.2%) compared to Prime Day 2019 and from $4.19 billion (+148.2%) compared to Prime Day 2018.
There is an increase in the consumption of online streaming content as well. According to the study in 2019
, a consumer used to spend around 83 minutes per day on online Streaming platforms which have grown to 92 minutes in 2020. The global streaming market is predicted to reach $688.7 billion by 2024.
There is also an increase in wearables and the use of apps. For example, ‘The Untouchable’
band is one of the latest wearables which was introduced during the pandemic. It is a special band that helps one get rid of unconscious habits like that of touching one’s face. This band helps in training the mind by giving a mild vibration whenever one touches his/her face.
Even as markets are opening up, people are cautious about how they spend their money; choosing products that are cost effective while prioritizing value and convenience. A large part of the population has tried a new store or brand or new ways of shopping during these trying times. Even if we go back to the way the world used to work, consumers expect their shopping habits to change permanently.
What can you do as a business to appeal to this new generation of consumers?
1. Align with the customer mindset
: Purchasing decisions are often impulsive and instinctive. It is time to acknowledge and align to the new consumer’s preferences. Discover these narratives that build positive associations with your brand and products. For example, the fashion industry has taken a cue from the current scenario to ramp up their sleepwear and loungewear. According to a June 2020 survey
, nearly 30% of 18- to 24-year-olds said they purchased leisurewear amid the pandemic, and another 20% said they planned to purchase but hadn't yet. The figures were similar for 25- to 54-year-olds.
2. Pay attention to customer delight: When customers are surprised and delighted by new experiences, long-held beliefs can also change - making the customer repeat the behaviour. For example, customers who switched to online shopping and door-step deliveries for the first time during the pandemic might stick to it as they now have experienced the ease and convenience of the service.
3. Acknowledge the change in the customer needs: As the mindsets and perspectives are shifting, so are the buying behaviours and preferences. It is time to acknowledge and align to these changing trends so organizations can stay relevant and survive.
For example, the real estate market is seeing a huge change in choices - in terms of location and preference to buy versus rentals. As many organizations are considering making remote working a permanent feature, the working-class is reverse migrating to their hometowns. Cities are starting to lie vacant with many to-let boards in apartment complexes as there is a rise in demand for homes in the suburbs and tier 2 & tier 3 towns.
In a post-Covid era, there is a rise in trend
among homebuyers to build a lifestyle away from the hustle of a metropolitan yet offering all the amenities of advancing cities. As a result, the real estate dealers in the towns need to ramp up their offerings while the ones in the city need to rethink their strategies and pivot.
4. Shape emerging buying habits with new products or services
: Companies can nudge consumers toward new habits through product innovation. For example, there is a distinct trend towards eating home-cooked meals. Kraft Heinz’s innovation agenda
for its international markets now prioritizes products that make home cooking pleasurable, fast, and easy—products such as sauces, dressings, and side dishes. In the same light, we see a rise of cloud kitchens being run by individuals who cater to the rising demand for home-cooked meals.
5. Use cues to reinforce the new behaviours to become habits: Habits form when consumers start to associate certain behaviours to certain cues - like the time of day, place, or activity. For example, people chew gum when they travel (associated with a place) or after a smoke (associated with an activity). With everyone working remotely and largely staying indoors, gum manufacturers need a new cue today.
To help turn behaviors into habits, companies should identify the contextual cues to drive the desired behaviors.
The pandemic has changed our habits and behaviors forever - and at an alarming speed. Some of these changes might outlast the pandemic. Even as cities and markets reopen, consumers remain cautious and mindful of their spending patterns and pre-covid choices. There is a distinct and unique change in consumer behavior across geographies. As recovery takes its course, health, economy, and social impacts of the Covid-19 are becoming more apparent. It is time for organizations to recognise and develop a nuanced understanding before planning for the future so they can adjust their product offerings accordingly.
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