Black swan events defined by their unpredictability, widespread effects and a hindsight bias have the power to bring about a major and permanent shift in human psyche. The effects of Covid -19 on our lives is quite evident. Majority of the population knows that it is one of the deadliest diseases out there. A few, including scientists, doctors and academicians know it is one of the most evolved viruses ever known and that it will take years, if not decades to bring life back to normal. There will be, as they say, a world before and after Coronavirus. There will be long term consequences on travel, education, workplace, public policy, retail and almost all aspects of global economy. Consumer behavior has already started to see underlying changes which are here to stay.
We live in a society which is clearly marked by humans being the center-piece of celebration. Brands, from Apple (product) to Uber(service), celebrate us as a social animal (be it clicking a picture on an iphone with friends, or booking a cab to reach the venue of your friend’s marriage). Festivals, social gatherings, dining out, meeting friends, going for movies was and has been the norm. With more than half of the world’s population now staying at home and concepts of self-quarantine and social distancing at the top of our minds, the way we consume things is surely going to change and so will our outlook towards essential and indulgent categories.
Need is greater than want: Marketing 101 teaches us the difference between need and want; there has been clear indication throughout the economy on how consumers are trying to balance what they need vs. what they want. The jury on this is out. There will be massive cuts on high ticket items and luxurious spending (vacations, automobiles etc.). People are thinking twice to make any non-essential purchase. The shopping is more efficient, the exploration is lesser. This is also due to bleak economic forecast for a lot of consumers.
In Home is the new Out Of Home: With lockdown and several measures taken by the state come more meals at home, more cooking at home, and ofcourse work from home. Many restaurants have been forced shut, some will reopen but with reduced capacities due to social distancing norms. Bars have been closed; liquor cabinets have been stocked up. People are spending more time at home and will continue to do so both because of the changing habits, and safety. Fewer people will now be comfortable going to a bar or a restaurant, get on airplane or attend a large event. Share of wallet will shift from dining out to order in. In home exercising, spending more time on OTT platforms, cooking new dishes will become a norm. The key will be to retain consumers who have been ‘pushed’ to these services.
3Hs — Health, Hygiene & Healing: While the so called “health wave” had been building up for some time, now is the time it has reached its crest. Spends will be higher on proactive health minded buying than reactive health management. One thing that this pandemic has definitely taught us is to wash our hands. Consumers will be now less price sensitive towards products that guarantee hygiene standards both in foods and personal care. Prolonged periods of staying at home has forced people to rethink about our life priorities. Spending more time with family, pursuing long lost hobbies, and magnifying self-expression will continue to rule the roast post Covid.
Quality and Safety: As very basic equation to give value to a product is function minus cost. There will be greater focus on what function something serves and less focus on cost (for essentials). Products and services that guarantee quality and have verifiable safety standards will be most sought after by the consumers. There will be heightened trust on locally sourced material and products that share their origin stories.
Online now, faster: This pandemic has given a peek into the future. There has been slowing traffic to retail outlets and more to online stores. Although the infrastructure is yet to match the surging demands, the shift from offline to online will be faster. A lot of new consumers have tried online shopping for the first time and most of them will stay with convenience being the key. Physical stores, earlier seen as a blocked assets will serve as delivery and pickup points.
While these are indicative, this is not the new normal yet, the change in undercurrents are visible but only time will tell which of these will stick and which will fade. Humans, in a way, tend to work mysteriously. What will be required of brands is to not be tone deaf, think beyond own intentions and ease the transition to this new normal.