Question

The Covid-19 pandemic has significantly affected the ways consumers spend and certainly will reshape consumer behavior.

Examine this recent report by McKinsey & Company:- https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/a-global-view-of-how-consumer-behavior-is-changing-amid-covid-19

Post 1. According to the report, how has consumer sentiment around the globe changed? Explain in 50-100 words.

Answer 1

Answer :

Consumer behaviors are settling into a new normal, as people everywhere learn to live with the reality of COVID-19 and as more countries reopen parts of their economies. Although the pandemic’s impact has varied across regions, five themes have become evident among consumers across the globe:

1. Shift to value and essentials : Even as some countries have reopened, many consumers globally are continuing to see their incomes fall. And they aren’t feeling too optimistic about their countries’ economic outlook. In most countries, confidence about economic recovery has dipped slightly since early April. Consumers in China and India remain more optimistic than their counterparts in the rest of Asia, Europe, or the United States

With many people expecting COVID-19 to negatively affect their finances as well as their daily routines for at least another four months, consumers are being mindful about their spending and trading down to less expensive products.

2. Flight to digital and omnichannel : Most categories have seen more than 10 percent growth in their online customer base during the pandemic and many consumers say they plan to continue shopping online even when brick-and-mortar stores reopen. In markets that had moderate online conversion rates before the pandemic, such as the United Kingdom and the United States, e-commerce continues to grow across all product categories. In markets like China with a high rate of online shopping before the pandemic, although total consumer participation in online shopping is not expected to go up substantially, the share of wallet spent online is expected to increase.

3. Shock to loyalty : For certain products and brands, COVID-19 caused supply-chain disruptions. And when consumers couldn’t find their preferred product at their preferred retailer, they changed their shopping behavior: many consumers have tried a different brand or shopped at a different retailer during the crisis. Value, availability, and quality or organic products were the main drivers for consumers trying a different brand.

4. Health and “caring” economy : Across countries, survey respondents say that when deciding where to shop, they look for retailers with visible safety measures such as enhanced cleaning and physical barriers. In addition, they buy more from companies and brands that have healthy and hygienic packaging and demonstrate care and concern for employees.

5. Homebody economy : In most countries, more than 70 percent of survey respondents don’t yet feel comfortable resuming their “normal” out-of-home activities. For more than three-quarters of consumers who adjust their behaviors due to the health crisis, the easing of government restrictions won’t be enough. Instead, they’ll wait for guidance from medical authorities, reassurance that safety measures are in place, and the development of a COVID-19 vaccine and/or treatments. Consumers do plan to resume some of their out-of-home activities soon, and shopping is first on the list. Large events and air travel, on the other hand, are last on the list