The country is in lockdown, businesses are folding up, workers being laid off and the overall retail confidence level is low. COVID-19 has changed communities, businesses, and the world forever. As retail businesses continue to work through the current situation and plan the future, it’s clear that the change required is significant – as is the potential opportunity across segments.
However, amid the crisis, one thing which has not disappeared is consumer aspiration. For now, consumers are coping with the new normal, buying only the essentials. Once the lockdown is lifted and the economy starts lifting back to normalcy, consumers’ pent-up aspirations will come to the fore. However, they will not rush into a flurry of buying, but will learn to live with less, spend less.
According to Agarwal, with limited financial resources, customers will prioritize their consumption. Their purchases will be need-based and will not include the good-to-buy stuff.
“The consumer will want to spend less and save more and due to limited disposable income, his/her affinity to value for money will also be high. S/he will want to buy products which are lasting,” he explained, adding that as a result of this pinched spending, consumers will experiment less and lean towards brands they trust, brands they have been loyal to for many years.
“There has been a paradigm shift in consumer mindset. The way customers shop has changed dramatically, and this is the new reality in which retailers have to function now. Customers will now talk only to brands they know and trust. They will try to hit stores they are confident of and will not try experimenting with new stores or brands during this period,” he said.
He also stated that the way businesses interact and engage with their customers will make a lot of difference.
Aside from this, Agarwal also said that while adapting to changing consumption patterns and the new normal, the situation has thrown open opportunities for retailers and brands to work with others like never before.
“The COVID 19 crisis has given great impetus to convergence, collaboration and co-creation,” he stated.
“We should acknowledge our strengths and should focus on partnering by utilizing others’ business acumen. If there is an opportunity in terms of resources and space, then retailers must coordinate and collaborate. I for one would not mind collaborating with new categories like medicine, beauty, wellness or even salons, which will enhance services at my stores. It is the time to accelerate collaboration over competition,” he concluded.