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Impact of Covid-19 on shopping behaviour

Consumer behaviour and choices have evolved significantly during Covid-19. Some developments, such as an increase in the savings rate are a reversal of previous trends; while others, such as, digitalization of shopping and banking have witnessed an increased adoption. 

  • People across demographics are going digital, shopping more consciously and buying local as an outcome of the COVID-19 pandemic.
  • Financial and economic uncertainty have driven up the savings rate with expenditure skewed towards necessities.
  • Work from home is the new normal and has influenced shopping behaviour.
  • These changes are, in all probability, here to stay, and businesses need to adapt quickly to the needs of their consumers who are viewing brands through a new lens and in a new light.

Indian Festiv ShoppingSource: Shutterstock

Uncertainty and panic have defined these unprecedented times. COVID-19 has disrupted nearly every routine in day-to-day life and transformed not only the way we conduct ourselves physically, but also our aspirations, sentiments and buying behaviour.  Thus, for example, 75% consumers in the US have tried a new store, brand, or different way of shopping during the pandemic. Further, around 66% customers in Indonesia plan to shift online for holiday shopping. This trend has resonated closer home, too. Around 81% of customers in India admitted that the pandemic had changed their shopping habits according to Yougov.  According to Harsha Razdan, Partner and Head- Consumer Markets and Internet Business, KPMG in India:

The consumer sentiments have been changing manifold over the past few months in the current scenario. Going forward, organizations need to evaluate and invest in studying consumer profiles, keeping in mind the larger picture. 

The changing shopping patterns

While the digital marketplace was already thriving pre-pandemic, the shift has been accelerated by the many COVID-19 restrictions put in place time and again. Consumers have turned to digital platforms for their grocery shopping, banking needs and virtually everything else. This has been supported by local mop and pop stores going digital. The following graph gives a glimpse of the exponential increase in sale of groceries online:

Source: Statista

The digital boom has caused a surge in the demand for chat features, virtual consultations and increased personalization. While an increasing number of consumers are looking for customization, a threat to data privacy has emerged. In order to enhance the personalized experience of consumers, companies need continuous streams of data. The problem arises when either the consent for usage of such data is ignored or not even explicitly stated.

Also, online frauds have vehemently increased. The number of online shopping frauds registered with the National Consumer Helpline has jumped nearly six times from 977 cases in FY17 to 5,620 cases in FY20 till November 2019, taking the total count of cases since FY17 to 13,993.

Moreover, brand loyalty has taken a backseat owing to changes in lifestyle and a focus on value, quality and availability. The consumer is more open to experimenting with new brands and has an increased inclination towards local products. Policy initiatives such as Atma Nirbhar Bharat and Make in India have inspired this preference for local brands.

A more conscious behaviour while making purchases is evident. The contribution of organisations towards environment and society has become a prominent factor in making buying decisions. According to a survey by KPMG, 94% of total respondents are willing to pay a premium for a brand that is ethical and giving back to the society, while 90% of all respondents say that the integrity of a company matters to them a lot when it comes to customer service.  Abhijeet Ranade, Partner- Business Consulting, KPMG in India adds:

The typical Indian consumer has gone past the traditional definition of being price conscious. Today consumers are considering intangible assets such as brand’s goodwill, equity, ethics and purpose more while making their purchase decision. The rewards for firms who are able to comprehend, acknowledge and act on this mind shift are substantial.

Demand for necessities, hygiene, cleaning, and healthcare products has rocketed while the sale of non-essential goods and services has witnessed a plunge. Demand for home care products such as furniture and appliances has also risen in a bid the make the habitat more appealing. Food, mental and physical health have become priorities. Even with reduced incomes, consumers are inclined towards increasing or maintaining their previous level of savings. Hence, the pandemic has seen an increased investment in saving instruments. 

Here to stay at a global level?

These trends and changes in consumer behaviour have been observed at a global level and indicate that many of these changes can be permanent. According to a recent study by McKinsey in China, consumers are likely to opt for online shopping even after the outbreak ends, especially for categories such as personal care and groceries. This can be attributed to long term apprehensions and reluctance to shop at crowded places, when it can be done conveniently with the touch of a button at home.  

In order to resonate with the modern-day consumer, brands need to make an active effort to conduct themselves consciously and grow in a sustainable fashion. They need to promote a healthy lifestyle for all stakeholders so as to stay relevant. Moreover, as the consumer shifts from being more price conscious to value conscious, companies need to create lucrative value-propositions for them.

The growing inclination for local is a signal for organisations to explore ways of connecting and customising locally. Increasing consumer engagement while keeping customer at the centre, is key. Also, companies need to maintain integrity and transparency while utilising vast amounts of consumer data for critical decision making. Also, digitalisation for traditional retailers should be made a priority in order to survive. Lastly, they should stick to offering their customer a consistent price during their complete shopping experience.

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Rishab Mahajan
Rishab Mahajan
6 days ago

Really good insights! Very well written

Gautam Khanna
Gautam Khanna
6 days ago

Nice article

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