Trends and forecasting
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Unprecedented times call for changes in how businesses operate. With the pandemic impacting global consumers and their spending habits, opportunities are emerging for businesses to rise and adapt to new market demands. What’s next in the changing consumer behavior, and how should brands position themselves for success during the COVID-19 crisis? Asking these questions can provide businesses the insights they need to prepare for the new normal.
People worldwide are deeply concerned about the devastating impact of COVID-19 in all aspects of daily life. Across the world, our survey revealed that consumers are most worried about the economic repercussions of the virus. Almost all countries surveyed ranked “economic crisis” and “unemployment” in the first or second position among issues related to the pandemic.
Matters relating to one’s health and the possibility of disease spreading more rapidly in the future were placed third and fourth respectively among our survey respondents. We can surmise from these rankings that consumers in general are more concerned about the economy and their personal job security during the pandemic. However, there is also a heightened awareness of personal hygiene and overall health and well-being that companies can appeal to when it comes to developing their marketing strategies.
The COVID-19 outbreak has changed life as we know it. The aspect that has changed the most is purchasing and shopping. Based on data we collected for the Asia Pacific, Middle East and Africa regions, 88% of consumers said they had to change the way they buy goods and services, while 40% reported significant changes in this area.
What are people buying?
We can certainly see this change in terms of brand preference. All countries surveyed indicated an average of 26% increase in consumers purchasing a new brand that they wouldn’t normally buy because their preferred brand was not available. Moreover, one out of three customers who tried new brands eventually ended up favoring their new purchases and reported that they will continue buying them post-crisis.
It’s also not surprising that our need for essential goods will take precedence during a pandemic. 36% of consumers allotted more of their funds to buy bread, meats, vegetables, and fresh food while foregoing personal care products. Our survey also revealed a 60% rise in cooking home-made dishes, as well as a 30% increase in the consumption of frozen products more than usual.
Another change that’s taking place is the rise of the conscious consumer. Consumers are not only more mindful of what they’re buying but also of the brands they’re patronizing, which can seriously affect the volatility of market shares even among the top brands! We predict that this trend will prevail even after the pandemic considering that 4 out of 5 consumers said that what companies do during this time will impact whether they do business with them in the future. Hence, it is during such trying times that brands have to pay special attention to their brand positioning strategy during COVID-19.
Having said that, consumer brands must not carelessly launch marketing campaigns under the guise of doing public good as these may backfire on their brand. Consumers are watching closely with 75% noticing examples of companies being a force of good during the coronavirus crisis and 78% noticing examples of companies who are taking advantage of the pandemic. Businesses must also be prepared for more prudent customers. Sixty-eight percent of our respondents said that they will reduce purchases and save money after the pandemic.
Where are people buying their goods?
The bulk of buying activities in the APMEA region migrated from physical retail stores to online platforms, largely due to lockdowns, quarantines, and governments’ advice to stay at home. Emerging Asia experienced the highest surge—from approximately 30% online activity in February to more than 80% in April 2020.
Traditional retail stores in APAC experienced a slight recovery when China reopened its economy, though these types of stores are still in decline. We can expect online platforms to remain strong even after the crisis. In fact, online may become the new reality for certain categories as 72% of consumers said they preferred ecommerce websites when it comes to purchasing electronics and small and large appliances.
Additional data from our survey also support this growing preference of online platforms. Sixty percent of consumers said that they will avoid going to shopping malls and outlets, while 59% said they will increase their usage of home delivery services.
When businesses and offices were forced to close, many knowledge workers found themselves working from home. This increased the demand for work equipment such as monitors, laptops, and tablets.
There is also a greater demand for household appliances and mobile devices globally as more people stayed at home and used PCs and smartphones to stay connected with loved ones during the pandemic. Surge in demand for laptops were seen across the different regions, particularly in Europe where sales grew by more than 50% in March 2020, compared to the same month last year. The highest sales spike seen during this same period was for monitors at 88%, reported in Western Europe.
When asked about their work situation in the future, 72% of workers believed that remote work will be a reality for many companies. This mindset might explain why we also see consumers who are more willing to invest in electronics and office equipment. Our survey revealed that 1 in 3 consumers expressed their intention to spend more on durable goods in the next 12 months.
Countries have since reopened their economies and consumers are going back to stores though in fewer numbers. Our Coronavirus Recovery Atlas report provides insights on current market dynamics and early recovery in the EMEA and APAC regions. Consumer sentiments in these regions reveal that there is now a growing concern about an economic recession, though majority of the countries are still optimistic about regaining their losses by Q4 2020 or Q1 2021.
Recovery will also be different for each country as numbers show that sales are picking up faster in Germany, Italy, and France compared to China. The one thing that is constant since the reopening of stores has been the ‘revenge shopping’ phenomenon fueled by the pent-up desires of consumers for ‘retail therapy.’ Based on our integrated analysis, revenge shopping will last for a brief period and will eventually eclipsed by consumers’ demand for value-for-money.
Furthermore, all brands need to closely monitor disruptions to the supply chain in order to respond accordingly to changing consumer demand patterns and spending behavior. ‘Accidental trials’ have weakened brand loyalty and will most likely continue to cause upheavals in previously impenetrable markets. The preference for convenience and quick delivery will also continue to pit pure online sellers and traditional retailers’ online shops against each other. Brands that can act quickly and achieve success in positioning or repositioning their brand during COVID-19, as well as innovate in the early stages of the crisis will have the upper hand in the post-lockdown market
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Trends and forecasting
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