How COVID-19 Has Altered Consumer Behaviour

COVID-19 has drastically altered consumer behaviour, with major implications for brands. Brands are being watched more than ever for their public responsibility. Employee well-being has been thrown into the limelight. Branding has taken on new directions, as brands make both temporary adjustments and irrevocable changes. 


Changes in consumer purchasing decisions on convenience and luxury products 

Supermarket shelves have been constantly wiped out as the number of COVID-19 cases rises. From food items like instant noodles and dried foods to household items like toilet paper and cleaning products, consumers are growing used to seeing empty shelves. 

A notable trend is an increase in cooking and baking. According to a survey by Unruly, a video advertising platform, among non-digital activities, cooking stood out with 64% of respondents stating that they were doing more of it than before the pandemic. In Singapore, a survey by Nielsen reports that half of the respondents are much more likely to eat at home compared to before. 

“Given the extended period Asian markets have endured the COVID-19 escalation, the prolonged time … is clearly forcing a rethink in consumer behaviour. The desire to spend more time at home appears to be a likely side effect that will extend over time.” - Vaughan Ryan, Managing Director Southeast Asia, Nielsen

Overall, however, more people are spending less and saving more in the face of job insecurity and an impending global recession. 

The closure of retail stores worldwide has slashed consumer spending on non-essential items. According to Mapp, a digital marketing provider, 41% of UK consumers are delaying major purchasing decisions, especially for white goods, cars and properties. Even after the pandemic is over, some fear that brands will raise prices to try to recoup their losses. 

Shifts in media consumption patterns

Four-fifths of the world’s workers live in countries under full or partial lockdown. This means that consumers are spending more time on teleconferencing, collaborative virtual workspaces, online exercise programs, video-calling loved ones and indulging in entertainment. Media consumption could rise by up to 60% according to research by Nielsen.

Switches in consumer preferences towards advertising

In this period of trials and uncertainty, consumers seek reliable sources of information and support. The majority of consumers would still like to see advertisements but the key to success lies in the content and how it is conveyed. Unruly reported that 43% of survey respondents want brands to share information on how they are supporting employees or include information about COVID-19. That said, 17% want ads to provide a sense of normalcy and another 17% want them to be funny or positive distractions. 

Brands need to be vocal about sharing and while maintaining a strong sense of social responsibility. Nonetheless, they should avoid dwelling too much on the pandemic but adopt an optimistic approach, opting occasionally for tasteful means of cheering up consumers.  

Acceleration of digitialisation for brands 

COVID-19 is forcing brands to meet their consumers where they are – online. For brands that have traditionally relied heavily on physical stores and traditional marketing, experimenting with immersive technologies is imperative. 

Take the fashion industry, for example, COVID-19 has facilitated the rise of trailblazers such as The Fabricant, a fashion house that only produces digital clothing. In the process, The Fabricant also eliminates textile waste and creates beautiful online content. The founder observed that “brands are already looking for radical ways of redefining their culture and operations to a more digital mindset”. 

e-Commerce platforms like Bringoz are revamping to help retailers scale their delivery options. Its proprietary technology is helping companies to manage automated delivery operations and nearly doubled in the number of transactions since February. 

Brands that have strategically shifted their marketing efforts online to meet consumers at their need have been rewarded. 

Source: Louis Vuitton’s Chinese Valentine’s Day Campaign

In China, Louis Vuitton’s physical stores were closed leading up to Valentine’s Day. Instead, the brand launched an online pop-up store on We-Chat. Store associates were available via live chats for consultations. Louis Vuitton successfully doubled its sales from 2019. 

Source: Nike’s Douyin account 

Similarly, activewear brand Nike began posting in-home exercise workouts to Douyin (the equivalent of TikTok). It has since garnered 346,000 followers and over 2 million likes. Customer engagement translated to sales where it achieved a 36% year-on-year increase in digital sales in China. These brands are now using their experiences in China as a playbook for global marketing efforts. 

COVID-19 has forced brands to relook their processes and accelerated the digital transformation of businesses. 

Consumers are deciding which brands align with their values

What constitutes value to the consumer has already been shifting away from quantity and discounts due to sustainability and social responsibility concerns. COVID-19 will exacerbate this shift as it further differentiates brands by their responsibility and purpose. The world may be physically distant but in a world that is more socially connected than ever through technology, consumers are watching for how brands carry themselves. 

Time for brands to rethink and reset

As Benjamin Franklin said, out of adversity comes opportunity. Far from being opportunistic, this represents a chance for brands to redefine, rethink and reset themselves. For brands that have seen a dip in business, brand-build by reflecting and investing in the brand. This could be in the form of reconnecting with one's purpose, creating brand materials and strengthening team dynamics. For brands that have seen a boom in demand, this period allows one to test business scalability, improve processes and boost efficiency.  

COVID-19 has irrevocably altered consumer behaviour and branding 

We have seen how consumer behaviour has changed in this trying period. While some changes like buying decisions may be temporary, there are far more underlying shifts that will remain. Even after, businesses would ensure they have adequate stock of essential items in case of a repeated scenario. There would be an influx of investments in digital and healthcare technologies, given the huge demand experienced. Brands would increasingly pursue digital transformation to better connect with consumers. As brands take this time to rethink and reset, we are set to see even more changes.

Humans may remain inherently the same, but our channels for action are constantly evolving. Ultimately, humankind does whatever necessary to rise to the challenge together. Brands need to actively choose what roles they will play. 

References:
BBC: Covid-19: The history of pandemics
CNBC: Nike learned a lesson in China: Some want to sweat away their coronavirus stress
Data Spring: 4 Major Effects Of The Covid-19 Pandemic On Asian Consumers | Eye On Asia
Forbes: Virtual Catwalks And Digital Fashion: How COVID-19 Is Changing The Fashion Industry
Information Age: Covid-19 and digitalisation: 4 areas of tech set to boom post-pandemic
Louis Vuitton: Happy Chinese Valentine’s Day
Net Imperative: 41% of consumers delaying major purchases due to lockdown
Net Imperative: How is online advertising changing during the Covid-19 pandemic?
Nielsen: Asian Consumers Are Rethinking How They Eat Post Covid-19
Nielsen: Covid-19: Tracking The Impact On Fmcg, Retail And Media
Nielsen: The Impact Of Covid-19 On Media Consumption Across North Asia
Retail Dive: Nike sees China as a 'playbook' to tackling COVID-19 in the US
The Drum: Silence isn’t always golden: why brands need to be vocal in a time of crisis
The Economist: How the covid-19 pandemic is changing Americans’ spending habits
The Guardian: Covid-19 to wipe out equivalent of 195m jobs, says UN agency
Warc: Brand lessons from China in connecting with consumers during COVID-19 outbreak
Weixin: Adidas 超品日放大招；NIKE 直播把运动练到家 | 甲方乙方
WWD: Is COVID-19 Reshaping Consumer Content Preferences?