COVID-19 and the evolving consumer
With the growing terror of COVID-19, the consumer is saving, spending on health and adjusting with the new quarantine life
Every time the Prime Minister of India decides to go live, I am sure everyone is holding their breath. When he declared that India will observe a day of “Junta Curfew”, we all knew the time had come for an official lockdown. And a few days later India was officially closed(making people follow orders in our country is only possible by force, we still are not serious about COVID-19) for 21 days. We are on the 9th day of the lockdown and things have drastically changed as I observe. Not just for India but almost for the entire world.
A Nielsen investigation has identified six key consumer behavior threshold levels that tie directly to concerns around the COVID-19 outbreak. The thresholds offer early signals of spending patterns, particularly for emergency pantry items and health supplies, and we are seeing these patterns being mirrored across multiple markets.
Health was one of the growing concerns but suddenly it has become the top priority globally. “Interest rises in products that support overall maintenance of health and wellness. Followed by pantry preparation, quarantine living preparation and permanent shifts in the supply chain, the use of e-commerce and hygiene practices.”
Things have been similar for the Indian consumer, says Nielsen. While hygiene products sales see a surge, e-commerce orders witness a huge jump. With the rising number of COVID-19 cases and an ongoing lockdown the surge is expected and will continue even after the first lockdown ends.
Meanwhile, Adobe has unveiled the Adobe Digital Economy Index, the first real-time barometer of the digital economy, which analyzes trillions of online transactions across 100 million product SKUs in 18 product categories in the US for now. (Report Link)
“Powered by Adobe Analytics and based on a new “digital consumer shopping basket” measuring sales of online goods and services, Adobe's Digital Economy Index findings include a 20 percent increase in digital purchasing power—the amount consumers can buy with a set amount of money over a period of time—since 2014. Sales in certain categories, including groceries, cold medications, fitness equipment and computers have surged as a result of COVID-19. Buy Online, Pickup In-Store (BOPIS) shopping has increased 62 percent.”
People are turning online for shopping, especially for groceries according to Adobe's DEI. Other major observations for the US consumer:
COVID-19 concerns drove increases in online purchases in the following product categories from January 1 - March 11, 2020:
Virus protection category products like hand sanitizers, gloves, masks, and anti-bacterial sprays surged 807%
Over-the-counter drug purchases increased by 217% for cold, flu, and pain relievers
Toilet paper online sales spiked by 231%
Non-perishable, canned goods and other shelf-stable food sales increased by 87%
With the global economy marching into a recession, the evolving consumer has “Savings” as the top priority followed by spending in preventive health care, fresh and organic foods. Travel, public transportation, Outerwear, Luxury fashion, Restaurants, etc are going to feel the burn because the consumer is preparing itself to live a quarantine life even if tomorrow the lockdowns are opened up. Here is what the BCG Consumer Snapshot for March 2020 has to say:
Even the “Human Truths in a Time of Coronavirus: Part 1”. The new study, released by McCann Worldgroup’s global intelligence unit – McCann Worldgroup Truth Central people are taking a range of precautions in response to virus fears.
76% of people globally say they’re washing their hands regularly and using hand sanitizer, 59% of people globally are staying away from public places, 32% of people globally say they’ve tried to boost their immune system and 30% of people globally are calling family members to inform and update them.
Deloitte’s latest report on “Impact of COVID-19 on consumer business in India” states that the pandemic has set foot in India and is expected to lead the country towards a major slowdown. According to the findings the pandemic is likely to impact the country’s economy through the following four - Supply Disruptions, Global and Domestic Demand, Stress on banking and financial sectors and Falling Oil Prices. Besides China’s slowdown is expected to significantly impact various industries in India.
Greater use of the internet, social media and e-commerce touchpoints leading to the digitisation of the consumer shopping journey states Deloitte.
COVID-19 after showing its terror in China is now active in Italy(1,10,574 confirmed cases) and the US(2,16,362 confirmed cases). India is starting to see the terror and it has already registered 2032 cases with 50 deaths(Source at 12:19 PM 02/04/2020) While the government battles to protect the citizens and coordinate on the other aspects of bringing life a little bit normal; the consumer will be adopting new trends and habit.
Trust me there is no going back from here. Giving priority to health, living a meaningful life, reducing unnecessary expenses, mass adoption of technology and adjusting to the new quarantine life is the new norm.
“The world feels awfully strange right now, but not because – or not just because – it is changing so fast and any one of us could fall ill at any time, or could already be carrying the virus and not know it. It feels strange because the past few weeks have exposed the fact that the biggest things can always change, at any minute. This simple truth, both destabilising and liberating, is easy to forget. We’re not watching a movie: we’re writing one, together, until the end,” writes P. C. Baker. “We can’t go back to normal.”
Over the next few months, these habits will take concrete shapes and I will try to capture them.
For now, stay safe and stay home.