COVID-19 has made a significant global impact in 2020. Market analysts and experts believe this pandemic to have an effect on not just the current economy but in the next coming years. Businesses are closing down from restaurants, movie theaters, gyms, and salons among many other.
Workers are also experiencing difficulties as more employers are laying off their staff as they are unable to sustain the overhead costs. Many people are finding themselves without a job and no means on how to provide for their families. Some companies are asking their employees to work from home deeming this as the new normal.
People are slowly adapting to the changing times. One of the things that is particularly clear is how this outbreak is changing the way consumers behave. The uncertainty has sparked new changes in the way consumers are buying products. More and more are resorting to buying products online.
With most countries on lockdown, businesses are forced to close their operations since people are instructed to stay at home and avoid public areas. Thus, limiting people to shopping only for essential goods. To keep up with the current situation, small to large-scale businesses are scrambling to ensure that they stay afloat.
In this article, we’ve gathered information to help companies analyze and make decisions for their businesses, especially during this difficult time. We will also discuss how the changing consumer behaviors and what they are buying to help you decide on how to adapt to the changing economy.
Changes in Consumer Behavior
By now, everyone has felt the impact of coronavirus in their lives. People are following social distancing protocols and adjusting their behavior when it comes to purchasing essential and non-essential goods. Whether its buying groceries in physical stores or online, consumers are making conscious decisions based on the effects of the pandemic.
People are now more conscious of protecting themselves and their loved ones from contracting the virus. This includes shifting their buying behavior and patterns. With the uncertainty of the situation, consumers are focusing their efforts towards online shopping.
To understand how coronavirus is affecting consumer decisions, we’ve gathered some of the changes we’ve seen in their shopping behavior.
People now prefer online shopping
With the rapid spread of COVID-19, people understand the importance of staying at home. People are limiting their exposure to others which also affects their decision in buying essential goods. Hence, most consumers are diverting their efforts online.
Some people are asking if it’s safe to buy online, especially since they will be receiving their items through delivery. However, experts say that the virus will most likely die during the process, especially with the tough shipping conditions and environment the item has to go through.
Hence, the risk of spreading the virus during the shipment from packing the item to delivering it to an individual’s doorstep in a matter of days or weeks is very low. The risk of an infected person transferring the virus to the products is also low, especially when the goods are moved from one place to another under various temperatures and conditions.
Shoppers are panic buying
With the emergence of COVID-19, the World Health Organization (WHO) declared this as a global pandemic. This resulted in a panic-buying spree on certain medical items such as face masks, alcohol, and hand sanitizer. Other products people hoarded include household items such as toilet paper.
Why would people hoard toilet paper? People respond to crisis differently. What may be essential for one person may not be for another. However, when faced with uncertainty, most people feel the need to have some sort of control over things.
Panic buying is a form of psychological need where an individual gains a sense of control. It makes them feel that they are making the right decision in hoarding essential items. In a way, the idea behind it can be compared to the concept of retail therapy where buyers feel comfort when shopping. When people see other people panic buying, it creates a shortage which makes others decide to buy and stock up to ensure they have enough essentials. Gender and age affect consumer decisions. According to studies, consumers behave depending on their gender and age. Based on a survey, women are more concerned when it comes to how COVID-19 is affecting everyone while one-third of men are affected in terms of how they purchase products and services. Survey also shows how more men are now turning to online shopping to avoid physical contact. Meanwhile, the buying behavior of young adults or millennials is also affected by the pandemic. The majority of them are concerned on how the outbreak is affecting the economy. Hence, they are reducing their spending and stocking up items. While the older generation may still be concerned about the pandemic, they are do not let it affect their buying decisions compared to millennials. The New Normal With the global impact from coronavirus, business-to-consumer and business-to-business organizations are trying to meet the market demands. At least nine out of ten consumers have altered their choices in shopping as a result of the pandemic. The majority of consumers say that their behavior has been influenced by the outbreak. This situation will continue to remain until stay at home orders and lockdowns are lifted. As consumers begin to adapt to the new normal, there has been a shortage of products. Many shoppers are reporting a lack of stocks of certain essential items in groceries. Half of them say that they are delaying the purchase of non-essential products, especially since most of the shops they normally frequent are closed. These changes in consumer behavior is an indication of the new normal.
Businesses who view e-commerce as a secondary sales channel will now realize how important it is and how it can save their business. This now becomes an opportunity for small to large-scale companies to get back on their feet and maximize the presence of digital platforms. It is also a means to attract new customers, increase your revenue, and create new sales channels.
An Increase in Revenue in Certain Industries Due to lockdowns in various cities and countries across the globe, most people now choose to shop essential and non-essential goods online to avoid physical contact and contamination. Some industries are enjoying a surge in profits including the following below. Online grocery. We’ve seen a significant rise in the demand for online grocery items since March. Many consumers are maximizing the use of online ordering instead of going straight to the grocery.
Several reports indicate the possibility of contracting the virus in groceries. To avoid this, consumers are trying online grocery shopping. This is also ideal for people who do not own a private vehicle. With online grocery shopping, customers can have their purchased items delivered straight to their doorstep.
Online grocery services continue to attract new customers. In fact, around 13% of customers who availed home delivery say it was their first time to try out the service or in a span of six months.
Home delivery. Many customers do not want to shop in physical stores to avoid possible contamination from people or objects. Therefore, one means of getting their supplies to their home is through home delivery service.
Whether its groceries, food or non-essential items, home delivery services have become the most practical way to get stuff sent to a person’s home without them having to leave the house. Home delivery companies are looking to hire more employees to be able to serve the demands of the consumers. Home delivery is a safer and practical way of serving the needs of the customers.
Food and beverages. Sales of food and beverage items are up to be more specific. However, people are changing the way they buy these items in the grocery.
Aside from using delivery services, many consumers are buying online and just picking up the groceries at the supermarket. There are also certain apps and services where people can hire shoppers to do their grocery run. These services are enjoying a huge surge in demand and profit.
Health and safety products. Health-related items such as vitamins are seeing a rise in demand. Some health stores have reported these items to be out of stock. Face masks, alcohols, and hand sanitizers are also some of the hot items being hoarded by many consumers. Reports show that the sales of face masks have gone up to a whopping 300%.
Face masks and hand sanitizers are two of the top products consumers are having a hard time purchasing. Many countries are having a hard time getting these supplies. With the high demand for these products, many pharmacies and health stores have run out of stocks. Some online sellers are jacking up the prices and taking advantage of this demand.
Digital streaming. With people being stuck at home and entertainment venues closed, people are resorting to digital streaming services such as Netflix, Hulu, and Amazon among many others. These services saw a rise in subscribers. Meanwhile, even non-traditional streaming services are starting to release their own digital streaming.
Subscription services. Companies that offer the convenience of subscriptions have skyrocketed in the past few months. They are enjoying an increase in conversion rates as well as revenue.
Industries Affected by the Lockdowns
Many industries and businesses are hit hard by the effect of coronavirus. Since many employers are laying off their staff, many have lost their source of income. Therefore, many are cutting down on non-essentials including travel, entertainment, leisure, luxury goods, and fashion among many others.
Experts project the luxury goods industry will lose billions of dollars this year. Many retail businesses are closing their shops and most people are directing their efforts to shop online. This means that retail physical stores are scrambling to regain their revenue. However, when it comes to online sales, people are putting their money on essential products such as food, health, and medicine. The Challenges Consumers Face Based on research, 45% of consumers say they bought extra supplies of food and drinks. Hence, customers are faced with mostly empty shelves in the supermarket particularly for many essential items. Bread, toilet paper, and cleaning supplies are just some of the items many shoppers have been hoarding in the past few months.
When Will Shopping Go Back to Normal? One thing is certain. Purchases may not go back to normal for some time. More than 40% of consumers say that they will probably make major purchases once the pandemic ends or the situation improves in their country. Nobody knows when that will happen.
Meanwhile, younger generations will most likely wait until the pandemic improves. Top income earners, on the other hand, are more open to buying once the situation in their country starts to improve. Even though most countries are now slowly taking steps to reopen their economy, consumers, as well as businesses, continue to anticipate the long-term effects of the outbreak. Most people believe that it will continue to have an effect on their lifestyle over the next couple of years. This means that the pandemic will still affect their decision when it comes to dining out or going on a vacation. Final Thoughts People are trying to adapt to this difficult time and one of the changes we’ve seen is consumer behavior. Business owners are also facing many challenges. One-third of the world is under lockdown. Everyone is dealing with the effects of coronavirus in some way or another. Business owners should take this time to understand how the shifts in consumer behavior and adapt to the new normal to be able to keep up with the times. However, it’s also important to put the safety of the public and support each other. With the appeal of online shopping, businesses are highly encouraged to set up and maximize the use of various digital platforms. With consumers shifting their efforts online, businesses must learn how to move their businesses online too to adapt with the changing times. Having an effective digital marketing strategy can ensure the continuity of your business.