Impact of COVID-19 on short- and medium-term consumer behavior
Will the crisis have a lasting effect on consumption?
The pandemic has hit economies in most countries and many industries hard – mainly because consumption behavior of consumers has changed drastically. Due to lockdown and economic instabilities, consumers were forced to adapt their behavior from one day to another. Consumer trends that have been developing on a clear path in the last years were disrupted – the question remaining is whether this disruption will have a lasting impact. What happens now as economies are ramping up and social life is slowly opening up – what will the new normal of consumer behavior look like?
Along five major consumer trends, Monitor Deloitte has asked over 2000 consumers and industry experts in Germany during the crisis how consumption behavior has changed and how it is expected to evolve during the next 12 months:
1. Online vs. Offline: Due to the lockdown and increased health-consciousness, consumers were forced to buy more goods online and to use more digital services. However, will this forced trend continue after the crisis – and for which categories will this hold especially true?
2. Sharing vs. Owning: Before the crisis, the sharing economy wat at an all-time high. What will happen after the crisis – will consumers be more timid in sharing spaces and goods or will convenience lead them back?
3. In-Home vs. Out-of-Home: Dining out and convenience formats where on the rise before the crisis. The lockdown has forced people to not only dine in but also change their fitness behavior. Will the crisis change the fitness and gastronomic sector forever or are consumers longing to get back to their old habits?
4. Local vs. global: Globalization has been the driver of our economy over the past decades – for the first time ever global exchange, travel and supply chains have been disrupted severely, fostering already ongoing localization trends – especially in the food and retail sector. How will the new normal look like? Are consumers willing to give up convenience and pay a premium to support local economies in the mid-term as well?
5. Data privacy vs convenience: Compared to some Asian countries German consumers have always put a lot of emphasis on data privacy and not sharing (too much) personal data. However, the crisis and the increased dependencies on digital services has force many consumers to give up their data more often than before. Did this foster a long lasting mind-set change or nor?
In the section above you can download the full study.
How COVID-19 changes consumer behavior long-term
As part of the presentation at this year's German Retail Congress 2020, the results of the study in May 2020 were supplemented by the observations of the Deloitte Global Consumer Pulse Survey. The Global Consumer Pulse Survey, which is being released monthly until the beginning of 2021, provides an overview of how COVID-19 affects the everyday life of consumers and influences their shopping behavior. The study is based on a representative online survey in 19 countries, with about 1,000 people per country/survey participating.
The main finding in the validation is that building up omnichannel capabilities is key to win consumers in a volatile world as currently shaped by COVID-19. One step at a time and a clear target picture in sight. The main success factor is to understand what your customers really want and need. Based on this understanding you should, on the one hand, develop a sustainable long-term omnichannel strategy and, on the other hand, implement popup solutions as immediate action. While executing your strategy, learn and adapt towards changing circumstances regularly.
You can download the whole “How COVID-19 changes consumer behavior long-term” brochure here and find out more about how COVID-19 has affected the retail sector and what lessons German retailers should learn for their future and their transformation.