Covid-19 and its impact on consumer behaviour
As a result of the COVID-19 pandemic and its rapid impact on our lives and the economy we are starting to see some clear shifts in consumer behaviour. These will have both short and long-term impact as both consumers and businesses as they are forced to change their behaviour radically for weeks or months. This is also likely to drive behaviours that will remain.
Time to consume: 5 min
9 April 2020
People responding to restrictions around travelling and social distance
Impact on behaviour as a result of radical changes to the movement of people between countries and increased social distancing between people in their everyday lives. Examples of restrictions imposed or recommended to stop the spread of COVID are:
- Majority of borders are closed, and flights and holidays are disrupted
- Large social gatherings prohibited or not recommended with effects on everything from pubs, restaurants, cafes to shows, theatres and even funerals.
- People are being urged to work remotely
- Schools have been cancelled for weeks at a time
- Public gatherings are being discouraged, if not prohibited
- Non-essential retail been forced to close
Apart from this it is increasingly likely that people will be self-quarantining in their home for weeks at a time and limiting their socialization for much longer than that.
These shifts are also influence change in how people work and shop far into the future and accelerate the pace of changes already underway.
While this has hit industries classed as non-essential such retail, hospitality, travel, and entertainment, which may be forced to make fundamental changes to their business models on the return to the ‘new normal’. Organisations and employees may see opportunity to permanently adopt new ways of working experienced through the crisis, such as adoption of remote working, flexible hours, and reductions in travel. Similarly, in our shopping behaviour, the increase in use of home delivery will have a longer lasting effect of online sales growth. Some of these impacts can be clearly seen in those countries that exiting the peak of the virus.
Impacts on the retail sector
There are already now clear signs of increased volumes in grocery, pharmacy, home improvement and discount general merchandise as consumers prepare for the possibility of isolation or lockdown or already find themselves in that situation. Increased demand for home delivery services are outstripping availability and there is a rising demand for DIY and home improvement as a result of people spending more time at home.
The availability of core food product in store is a challenge. Products like fresh produce, frozen food, bread, milk, alcohol, meat, cleaning and toiletries are low in supply or even unavailable in some markets as a result of increased demand and new shopping patterns. This increase in demand is also affecting staff scheduling and leading to an increase in temporary employment opportunity.
As stores are trying to follow regulations and take action to implement social distancing measures whilst still allowing their consumers to shop, this is creating delayed access to stores and queues outside. Whilst the increase in sales is significant, the cost of implementing change to allow the stores to trade is significant, a key consideration is for how long these measures will need to be implemented after the virus has reached its peaked.
Non-essential retailers in many cases have been forced to close either through a period of lockdown or a slowdown in consumers visiting stores. Whilst online operations have continued, many have shut distributions centres unable to enforce social distancing requirements safely. This will impact the cash position of many retailers.
Reacting to protect retail workers and consumers
As a result of the virus we can also see actions taken in order to protect staff and consumers to make sure everyday life can continue even if it is limited to being able to buy necessities once a day in some countries. Staff welfare issues have immediately responded by introducing such protections as sneeze shields attached to checkouts and service desks to separate staff and customers, increase social distancing measures have forced the limiting of the number of customers allowed to enter the store forcing long queues to form outside. With heightened awareness, comes a concern around the spread of the virus leading to both staff and customer taking measures to protect themselves with the appropriate PPE (masks and gloves).
In some regions panic buying and a subsequent shortage in availability has increased footfall particularly in grocery, additional security measures have been introduced. Special opening hours are offered to key workers, elderly and vulnerable people.
Industries with high potential as a result of COVID-19
The changes in behaviour relating to the virus will introduce individual’s and family’s to new experiences, accelerate the adoption of services that help us maintain our health, social networks and appetite to be entertained
Some of the industries that are most likely to prosper as a result of changes in consumer behaviour during and after COVID-19 are:
- Remote work and remote education support
- Strong consumer brands with direct home delivery
- Physical and mental health apps
- Children entertainment such as boardgames, puzzles and crafts via internet channels
- Home food delivery
- Media streaming
- Audio books and eBooks
- Gaming and e-sports
- Virtual and video communication tools
- Virtual health services
Finally, it is likely that we will adopt and learn new ways of protecting ourselves from disease by washing our hands, keeping social distance when we or someone else is ill as well as avoiding to touch surfaces in public spaces etc. However, we are still human beings and the lack of social interaction that the crisis forces upon us will drive a need for spending time together with friends, strolling in the high street, eating in the favourite restaurant, going to the local pub, visiting a cinema, once this is over.
Some time from now we will know how this changed our society for the better and for the worse. A lot will be to the better!
The article is written by
Nick Hughes & Stefan Ståhl
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