Nielsen, the data and measurement firm, has just released its fifth edition of the COVID-19 Evolving Consumer Trends report. The report predicts key consumer behaviour shifts as a result of the pandemic.
According to the report, restrictions on travel will continue and the willingness of consumers to spend on luxury and entertainment will be limited by financial and safety factors. There will be a ‘basket reset’ – consumers will be accounting for new essential needs focused on health and safety and spending on merging old and new needs. In-home spending will take priority over discretionary out-of-home spending and consumers will seek products and services that provide value, quality and peace of mind due to declining consumer confidence brought about by salary cuts and lay-offs.
The data shows that the Indian FMCG has been hit hard by the severity of the pandemic. With ‘unlock’, non-essential commodities have shown a restrained revival and are still to reach pre-COVID levels. However FMCG recovered quickly due to the pent up demand in June-July and is stabilising now, driven mostly by rural India.
For groceries and home solutions, consumers prefer mass and popular price segment products and bigger packs that offer good value proposition and are scouting for deals and promotions. Grocery store shelves are getting optimised as the number of assortments for each category is reducing.
Read also: Opinion: Damsels in distress; dreamland in despair
E-commerce sees a cautious recovery with an increased number of first time shoppers as more consumers adopt online shopping. The average spends per shopper, order value, number of items purchased has increased. Mobiles and accessories, appliances and electronics are driving the recovery for e-commerce while online fashion sales sees a decline.
In a survey conducted among chief experience officers (CXOs), 64 per cent of respondents were optimistic about business performance in the next four months while 29 per cent expect a moderate decline by 5 to 15 per cent. Limited store opening hours and decline in consumer demand continue to be a challenge for businesses.
CXOs are adapting to the ‘new normal’ consumers by increasing their investment in digital and online platforms as more and more consumers are adopting e-commerce. Many are also reprioritising their production capacity, focusing more on need-of-the-hour based commodities. About half of the surveyed CXOs are reviewing their communication strategy to convey safety, health and hygiene and reducing advertising campaign spends. Localisation of sourcing and manufacturing operations has also been considered by business leaders.
As consumers continue to be conscious about health and wellness, spending cautiously on essential needs only, manufacturers and retailers are rationalising their product portfolio and consumer offerings to suit the needs of the ‘new normal’ consumer.