Opinion | Will consumer behaviour see shifts post covid-19?3 min read . Updated: 02 Apr 2020, 01:49 AM IST
Shifts in supply chain, increased usage of online shopping could be prevalent post covid-19
Executives at automobile companies said their mass market cars may see a spike in sales in a post covid-19 scenario. They argue that customers will shun shared cabs and public transport as the fear of the disease, a global pandemic that has killed thousands, lingers. Some car companies are expecting their affordable hatchbacks to do well as the middle-class consumer puts hygiene and safety above all else.
Others predicted hard times for online marketplaces for homestays, such as Airbnb, which have no direct control over the inventory listed on their platforms and, hence, on their hygiene. Consumers may shift to big branded hotels for their sanitation standards. “I feel the recovery of shared and rental economy will be slower than established hospitality players," internet economy expert Sreedhar Prasad said in an interview.
Online grocery companies and e-commerce firms are also hoping that a massive shift will take place towards online shopping in India, as people will be wary of going to crowded shops and markets. With the ongoing 21-day countrywide lockdown announced by the government, malls, restaurants, cinema theatres and retail shops, other than those providing essential goods, have downed their shutters.
This has meant a major readjustment for mall rats, shopaholics, foodies and film junkies, who are all confined to their homes, unable to spend and stimulate the economy.
A Nielsen study unveiled last week looked at the retail purchase in traditional, modern and e-commerce channels, and evaluated consumer attitudes. It tracked this behaviour for several weeks from the time the disease first surfaced in India till the country went under a lockdown. First, it observes an increase in consumer interest in health and hygiene products, leading to purchase of safety items such as hand sanitizers and face masks. As the disease spread, consumers started stockpiling their pantry with shelf-stable food and broader assortment of health and safety products. Store visits went up and the basket size expanded. The quarantine stage, followed by restrictive living, led to a rise in online shopping, fewer store visits, purchase of essential goods.
So, will marketers see big shifts in consumer behaviour once the lockdown is lifted and life limps back to normal? Nielsen said when people return to daily routines, they may continue to be cautious about health, and there could be permanent shifts in supply chain and increased usage of e-commerce.
That may be true to an extent, but Arvind Singhal, chairman of consulting company Technopak Advisors, said not all shopping will suddenly move online. “A few weeks of change does not change consumer behaviour permanently. While I agree that online grocery shopping may see a spurt, it does not mean that there will be a fundamental shift in behaviour." Consulting firm Red Seer pegged the current online food and grocery retail at 0.2% of the overall market. Unless online retail offers a unique value proposition, shoppers will return to physical retail since consumer response in crisis is very different from when there is stability. People will step out to eat and for entertainment, said Singhal.
Rajat Wahi, partner, Deloitte, agreed, saying that the proximity and convenience of a neighbourhood kirana, or even modern trade stores, are unbeatable. “In China, for instance, super markets are back in business and report an increase in consumption." He also does not think that ride-hailing cabs will lose their edge, for their sheer convenience. “What you may see is perhaps the consumer being more cautious, wearing mask and gloves. But he will bounce back."
Ankur Pahwa, EY India’s e-commerce and consumer internet leader, said consumer behaviour towards ordering will not change. Contactless delivery will become more of a norm. Even ride hailing companies will have to change after this crisis is over, and pay attention to their driver partners and their cabs, besides offering better sanitation. “Even as the companies exercise caution at their end, consumers’ expectation of hygiene will change. And, probably, they will be willing to pay more for it, too."
Thomas Fenn, who runs Delhi-based restaurant Mahabelly, said discerning consumers will start paying very close attention to how brands are handling hygiene protocols and, more importantly, how they are executing them through each and every touch point.
Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.