Consumer behaviors are settling into a new normal, as people everywhere learn to live with the reality of COVID-19 and as more countries reopen parts of their economies, says ‘A global view of how consumer behaviour is changing amid COVID-19’, a report by McKinsey.
McKinsey tracked consumer sentiments across 45 countries.
According to a the report, although the pandemic’s impact has varied across regions, five themes have become evident among consumers across the globe:
Shift to value and essentials
Even as some countries have reopened, many consumers globally are continuing to see their incomes fall. And they aren’t feeling too optimistic about their countries’ economic outlook. In most countries, confidence about economic recovery has dipped slightly since early April. Consumers in China and India remain more optimistic than their counterparts in the rest of Asia, Europe, or the United States.
As consumers hunker down for a prolonged period of financial uncertainty, they intend to continue shifting their spending largely to essentials, such as grocery and household supplies, and cutting back on most discretionary categories.
Flight to digital and omnichannel
Most categories have seen more than 10 percent growth in their online customer base during the pandemic and many consumers say they plan to continue shopping online even when brick-and-mortar stores reopen. In markets that had moderate online conversion rates before the pandemic, such as the United Kingdom and the United States, e-commerce continues to grow across all product categories. In markets like China with a high rate of online shopping before the pandemic, although total consumer participation in online shopping is not expected to go up substantially, the share of wallet spent online is expected to increase.
In addition to e-commerce, other digital and contactless services—including curbside pickup, delivery, and drive-through service—are also seeing much higher adoption rates. While some of these habits are seen as a work-around to the crisis, many at-home solutions to regular activities will likely be adopted for the long-term.
Shock to loyalty
For certain products and brands, COVID-19 caused supply-chain disruptions. And when consumers couldn’t find their preferred product at their preferred retailer, they changed their shopping behavior: many consumers have tried a different brand or shopped at a different retailer during the crisis. Value, availability, and quality or organic products were the main drivers for consumers trying a different brand.
The research shows that in China, and the United States, more than 75 percent of consumers reported trying a shopping method while in Japan, where lockdowns weren’t imposed, the comparative number is only 33 percent. We expect these changes will shape consumers’ habits even beyond the effects of COVID-19. In China and the US, upward of 60 percent of consumers who tried a new behavior plan to stick with it post-crisis.
Health and ‘caring’ economy
Across countries, survey respondents say that when deciding where to shop, they look for retailers with visible safety measures such as enhanced cleaning and physical barriers. In addition, they buy more from companies and brands that have healthy and hygienic packaging and demonstrate care and concern for employees
During these trying times, consumers have a heightened awareness of how businesses interact with stakeholders, local communities, and society more broadly. The actions that businesses take during this pandemic are likely to be remembered long after COVID-19 has been conquered.
In most countries, more than 70 percent of survey respondents don’t yet feel comfortable resuming their “normal” out-of-home activities. For more than three-quarters of consumers who adjust their behaviors due to the health crisis, the easing of government restrictions won’t be enough. Instead, they’ll wait for guidance from medical authorities, reassurance that safety measures are in place, and the development of a COVID-19 vaccine and/or treatments.
Consumers do plan to resume some of their out-of-home activities soon, and shopping is first on the list. Large events and air travel, on the other hand, are last on the list