Amid all the headlines about the ‘new normal’, how consumers are flocking to digital channels, and how remote work will be part of the future beyond COVID-19, every company is trying to keep up with a fluid market. We face another year or possibly more of volatility – and companies will need to be agile to stay the distance.
Most people and businesses have been through a lot since the hard lockdown started earlier this year, with some adopting digital habits during this time. Many have taken a knock to their finances, which could play as big a role in shaping their behaviour in the months to come as any actions they take to avoid the coronavirus.
There have been many surveys and studies of consumer behaviour, perceptions and attitudes in the wake of the pandemic, yet the results paint a mixed picture of how permanent the new behaviours will be. Given that we may face new waves of infection and further lockdowns before the wide rollout of a vaccine, companies need to be ready for anything.
Here are four trends to watch out for:
- The ‘cocooning’ trend will intensify
Faith Popcorn first coined the term ‘cocooning’ in 1981 to describe the trend of people staying at home to shelter from the dangers of the world. With the pandemic, cocooning is back as a worldwide trend. Indeed, for South Africans, it never really went away because of the country’s ever-present safety and security concerns.
Beyond the pandemic, many middle-class South Africans may choose to stay home, more often. They have spent their time on DIY to make their homes more comfortable, invested in new televisions and coffee machines, and embraced e-commerce and food delivery services. As McKinsey puts it, home is recast as “the new coffee shop, restaurant and entertainment centre.”
- Consumers will be more digital, but it remains to be seen how much more digital
Demand for ecommerce services soared during the hard lockdown (level 4 and 5), and South Africans spent more time watching TV and streaming video, playing video games and watching DIY videos on YouTube. Yet the numerous studies about how sticky these behaviours will be after the pandemic deliver conflicting results.
This volatility is no doubt explained by the fact that the studies weren’t all conducted in the same period of the lockdown. It is clear that many consumers who didn’t shop online before COVID-19 will continue to do so after the pandemic, and that ecommerce adoption will grow in many product categories. It is less clear how many will return to the malls when they think it’s safe. Companies will need to continue to balance clicks and bricks to cover the market effectively.
“Purchase behaviour has been forced online, but not in the whole and not with a sense of everlasting adoption. That said, this is a powerful new sales channel that brands need to take advantage of as it is scalable and efficient. What the research has highlighted is that this loyalty is currently low.” says HaveYouHeard’s head of insights Claudia Schonitz.
- Loyalty can’t be taken for granted—trust and convenience count
An uncertain time like the current pandemic traditionally favours incumbents with cash reserves and strong brands as customers look for stability. Yet some of the developments during the lockdown created fertile grounds for consumers to switch brands.
Research from Google shows that COVID-19 has accelerated digital consumer trends, with consumers’ shopping preferences shifting and buyers seeking out new products. “South African consumers showed high loyalty to retailers who offered a convenient shopping experience in times of lockdown, whether the retailer was familiar to them or not,” writes Google. “Now is the time for retailers to be clear about their brand promise.”
Many consumers became more price-sensitive because of the financial pressures of COVID-19 and will switch to get a better price. Some were also forced to try alternatives due to stock shortages arising from panic buying early in the outbreak or a lack of ecommerce delivery capacity at the major retailers.
Trust is also key at this delicate time—GfK’s research shows that 87% of consumers said how companies conduct themselves during this crisis would impact whether they do business with them in the future. Around 80% said they had noticed examples of companies trying to take advantage during the coronavirus crisis.
- People still crave the old pleasures
Because we are possibly only a quarter of the way through the pandemic, it isn’t always easy to imagine a return to a world without masks and social distancing. Yet, much to government’s dismay, many South Africans have been quick to go back to nightclubs, family braais and other social activities as the lockdown eased. The lesson is that while some things will change, others will not.
In fact, HaveYouHeard’s consumer study concludes that: “…. the post-apocalyptic world is not the place many predicted it would be, and that the pandemic, reinforced as it has been by a recession, has not led to a host of new and sustainable consumer behaviours. The post-pandemic South African consumer is not that much different to the pre-pandemic iteration.”
Meet the new normal, same as the old normal?
Companies cannot be sure as yet exactly how the pandemic will change the South African consumer in the longer term. It’s clear that COVID-19, however, won’t affect everyone in the same way in a country with South Africa’s inequalities and disparities. Brands will need to stay close to customers and respond rapidly to shifts in consumers’ emotions, behaviours and spending patterns.
[Photo by Negative Space on Pexels]