COVID-19: Impact on consumer behavior and its implications for businesses.
- May 01, 2021
- Category Emerging Trends
The COVID-19 pandemic is leading to transformations in the ways we travel, we eat, we shop, we communicate, and the way we socialize. These transformations and their acceptance have started accelerating along with the lockdown restriction back in March 2020 and many of them are expected to stay longer.
How has consumer buying behavior evolved after the enforcement of COVID restrictions in different geographies? Are these changes permanent or temporary?
How can market research and consulting firms help brands and SMBs tackle new challenges and implement the right strategies?
The pandemic is transforming consumer lives.
Covid-19 has disrupted our lives for more than a year now and so has it disrupted the economy, growth, consumer behavior, organizations, and the entire ecosystem. The period of lockdown and the curfew restrictions have created a deep impact on people’s lives.
We as consumers have adopted new ways, ideas, and resources to transition ourselves to the next normal. We have started buying and consuming products and services after viewing them from a new lens. The spending and consuming patterns have taken different routes.
As per a recent economic forecast, the effect of the pandemic on the economy is going to be a rubber effect which implies that the economy is going to snap back with retribution. The increase would be catalyzed by increased household savings which are currently more than 20% across the world.
Many of the long-term changes in consumer behavior and sentiments are still being created offering new opportunities for businesses to shape the new normal. Big brands and SMBs (Small and medium businesses) need to follow the new decision pattern and base their strategies on the new purchase decision-making parameters.
1) Health is the top priority
Consumers' priorities have eventually centered on health parameters in their buying decisions. Spending on health-related purchases has become more important for consumers increasing demand for basic needs, hygiene, cleaning, and staples and thereby reducing for non-essential categories.
A big boost can be noticed in the demand for organic, natural, fresh, and fitness products. People have started paying a lot of attention to developing healthy habits and the same can be seen in their buying behavior.
“People don’t buy for logical reasons. They buy for emotional reasons.” – Zig Ziglar
This change in consumer behavior is expected to stay for longer and leave a permanent impact as consumers have incorporated such behavior as a habit now. Fitness on-demand businesses have gained a lot of traction during the pandemic times by offering home workouts, customized diet plans, and fitness training.
2) What value are you offering?
In the current unstable situation, buyers have started being more committed to value. The premium prices are facing the heat as consumers are looking for the perceived value and opting for essitial buying in each purchase.
Owing to the crisis, consumers have started to shift to other brands due to longer wait times, supply issues, reduced spending power, and health risks. Price sensitivity is also playing a very crucial role in driving consumers to shift brands with minimal resistance.
The acceleration of the ‘vocal for local’ trend has also impacted global brands and the behavior of consumers towards them. Impulsive buying and strong brand loyalty have gradually declined and this is anticipated to be one of the permanent changes businesses are going to experience in consumer behavior.
3) Going Digital
All the businesses have been adopting digitalization for several years. However, the pandemic has drastically increased the number of businesses that needed to start operating online. Rapid digitalization over the past 1 year has boosted many sectors.
As per a recent IBEF report, SMBs grew 18% year on year to 25.13 lakh units in 2020, from 21.21 lakh units in 2019. Online e-commerce deliveries, Telemedicine, remote working, remote learning, and online entertainment are seeing the highest boom. Consumers have started adopting digital platforms and ways to shop, learn, socialize, communicate, and get entertainment.
The food and household category have seen substantial growth of more than 25% in customer base across countries that adopted online shopping. Digitalization has evolved consumer behavior and created permanent as well as short-term changes in it. While some of these consumer attitudes and behavior may remain permanent as the next normal, some might get back as the pandemic effect declines.
How can market research and consulting companies help businesses to adapt to these changes?
Big brands and SMBs need to implement new strategies to resonate with the transformed consumer behavior. Businesses need to adopt new product and service strategies along with the new platforms to deliver them effectively.
Businesses need to respond to the health first needs of the customer by highlighting the health aspects and benefits of their product or service. If the product or service offering is already related to healthcare it is the right time to consult a market research firm. The firm can help in understanding the detailed needs of the customer and market gaps and find the right product-market fit when customers are ready to try new brands.
As consumers are now inclined towards value, businesses need to match these preferences of evolved consumer behavior by reviewing what they offer and exploring changes that can be made to it. Businesses can think about launching the most affordable version of their products which is more value-driven. Rethinking the GTM (Go-to-Market) strategy and revamping the product attributes based on real-time consumer research insights can accelerate businesses to grow.
Going digital is the need of the hour to stay in business for long. Every small and big business is integrating digital processes and ideas into its operations. With the increasing online penetration in shaping consumer behavior, businesses must drive digitalization initiatives to increase customer base and loyalty. The research and consultancy firm also helps businesses adopt the right digitalization strategy based on different operational geographies.
These are some of the ways how market research and consulting firms can help businesses grow and sale through the pandemic by responding the evolved consumer behavior.
There is a wide range of project-based services that you can leverage to accelerate your business competitive intelligence and growth. Visit our website today to know more: https://www.researchfox.com/
Or get in touch with us at firstname.lastname@example.org
Let us know your thoughts on the impact of Covid-19 on consumer behavior in the comment section below. Feel free to share this post with anyone.
#Market research, #consulting, #go to market, #Covid-19, #Consumer Behavior, #Impact of covid, #ecommerce, #competitive intelligence