Impact of COVID-19 on Consumer Behavior | Emerging Trends

Covid-19 has shifted our world on its axis. Gone are the days when after a long day at work, one could just walk into a store and indulge in some much-loved retail therapy. With nowhere to go and no one to show off to, all our fancy clothes, bags and shoes are resting unused in our closets. Our primary spending today is on healthy eating and living. Now, let us look at how the pandemic has shifted the overall consumer behavior.

● Emphasis on essentials: Due to the financial crunch, consumer spending has become careful, discretionary spending has been altered. Non-essential items have been replaced with essential items and hygiene products such as vegetable wash, floor cleaners, sanitizers and soaps are trending.

● Rise of digital and omnichannel: Before the pandemic began, offline shopping was an experience. And brands spent an extensive amount of money and time to define physical customer touchpoints. But with the consumers now stuck behind the closed doors of their homes, all these touchpoints have become inconsequential and brands have had to hurry to create new customer touchpoints online. Epigamia who up till now depended on retailers to display its stock and drive sales has come up with an online store to enable online customer touchpoints.

● Change in loyalty: In the initial days of the lockdown, due to disruptions in the supply chain, consumers opted for brand substitutes when the stock of their favorite brands was unavailable. This shift forced consumers to try out new brands. Although this shift could have been temporary, now that the problems in the supply chain have been fixed, it has been noticed that for some this shift has turned permanent.

● Health-based economy: Products that add no nutritional value on consumption have seen lower sales. Carbonated drinks are being replaced for healthier alternatives. A piece of better evidence for this phenomenon would be when Dabur saw a nearly 7-fold growth in demand for its Chyawanprash brand and a 34% increase in sales for its OCT health supplements. HUL acquired Horlicks and Boost health drink brands from GSK to play up the health factor. Discretionary spending on Makeup and fashion apparel had suspended when the pandemic first began and now it has become a part of consumer spending habits. Retail stores will have to approach this with solutions that could coax back the consumers into buying these non-essentials again. From Louis Vuitton to Bewakoof.com, brands have started selling elegant and funky face masks. Personal care products are also being replaced with products that add a hygiene factor. Firms on understanding this shift have begun adjusting to this new trend.

All in all, we have become a homebody economy, with consumers no longer venturing out, all of their purchases have shifted in such a way that now they are centered around their needs at home. Savings from canceled vacation plans, zero commutes for work, and lack of status maintaining buys are now being used by the consumers to transform their homes into comfortable living spaces.

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Author: Akanksha Tanwar
Editorial Team, NjM
Class of 2022, NMIMS Mumbai