How Will the COVID-19 Pandemic Alter Consumer Behavior?
Sat, April 17, 2021

How Will the COVID-19 Pandemic Alter Consumer Behavior?

 

Sabrina Helm, associate professor in the Norton School of Family and Consumer Sciences in the University of Arizona’s College of Agriculture and Life Sciences, stated that consumers are significantly reducing most discretionary spending, as it has impacts on certain industries like apparel, travel, restaurants, and more, reported Alexis Blue of UA News, a news website of the University of Arizona.

Helm also observed a rise in online shopping, particularly for groceries. In March, consumers of all age groups tried shopping for groceries online and most will likely continue to purchase groceries online. As long as the pandemic continues, buyers will flock to online shopping platform to purchase goods. However, it is impossible to foresee whether consumers will continue to shop online or go back to physical stores once it is safe. Most people have missed the social experience of shopping in physical stores, which online shopping cannot possibly provide.

The Pandemic Reshapes Consumer Behavior

According to Nielsen, an American information, data, and measurement firm, the firm polled over 6,000 respondents in 11 markets from March 6 and 17: China, Hong Kong, Taiwan, Japan, South Korea, Thailand, Philippines, Vietnam, Malaysia, Singapore, and Indonesia, cited Cheryl Arcibal of South China Morning Post, a Hong Kong English-language newspaper.

In China, 86% said they would eat at home more often than before the pandemic. 77% of those in Hong Kong shared the same outlook, followed by 62% of those from South Korea, Malaysia, and Vietnam. The results echoed those of the findings of market research firm AMC Global. It found that 45% reported that they are currently eating less fast food than they normally do, cited Heather Lalley of Restaurant Business, a leading media brand in the commercial foodservice industry. Further, 32% of consumers said they plan to make more home-cooked meals after the pandemic.

In March 2020, Consumers in Singapore said they are confident (54% versus 46% of those who said no) that the country will recover from economic recession in the next 12 months, said Nielsen. In March 2019, 73% said “no” and 27% said yes. With regard to the respondents’ purchase behavior, 49% bought hand sanitizers for the first time due to COVID-19 and of those who said they bought said product for the first time, 56% were more likely to buy it in the next 12 months. 46% also purchased surgical masks and of those, 54% would buy it in the next 12 months.

Respondents also bought or ordered the following products for the first time: food delivery (14%, with 68% saying they will order in the next 12 months), toilet paper (12%, with 52% stating that they will purchase in the next year), and fresh grocery via online (11%, with 70% saying they will buy it again). Other respondents also decided to order packaged foods online (9%, with 61% expressing their interest to buy it again) and insurance (5%). 40% of those who purchased insurance for the first time said they are likely to buy it again in the next 12 months.

Online sales importance for non-food products rose from 12% last 2019 to 14% by February 2020. Meanwhile, online sales importance of food products decreased from 8% to 6%. The latter figures emphasized on the significance of physical stores and hypermarkets. With regard to online sales, 5.9% of hand sanitizers were online last year, with the figure jumping to 59.6% in February 2020. This was followed by household cleaners (21.3% by the end of February versus 19% in 2019), adult diaper (17.6% versus 15.2%), canned abalone (14.3% versus 3.3%), beauty eye care (12.5% versus 8.6%), and shampoo (11.6% versus 9.2%).

Regarding offline sales, sales were 34.6% for diapers by the end of February compared with last year’s 44.2%. Reductions in offline sales were also seen in coffee beans (24% versus 30.8%), dehumidifier (21.1% versus 25.24%), toilet care (16% versus 20.2%), laundry in remover (13.7% versus 19%), and wet wipes (13.7% versus 19.3%).

 

 

Reluctance In Dropping By Brick-and-Mortar Stores

Germany allowed smaller retailers below 800 square meters to reopen so long as they follow social distancing and hygiene measures, said Vicky McKeever of CNBC, a business and real-time financial market coverage news website. Larger businesses like Ikea, car dealerships, bike shops, and book shops were also allowed to reopen.

Stefan Stukenborg, head of an Ikea branch on the outskirts of Cologne, said the reopening was relaxed, as there were no queues and crowds, said Reuters, a Canadian media company. In an official translation of a statement, Stefan Genth, CEO of the German retail federation Handelverband Deutschland, noted that such cases would be expected for some time considering that consumer sentiment was at an “all-time low.”

He added that this was rooted in uncertainty in the job market, pushing consumers to be more frugal. In Italy, smaller retailers were allowed to reopen but owners said they did not expect business to be the same as before the pandemic.

 

 

The Trend of the “Behavioral Immune System” and “Social Proof”

Patrick Fagan, co-founder and chief science officer at Capuchin said the pandemic will usher technological innovation such as live-streamed events, which can be a huge business opportunity for individuals, quoted Alexandra Pastore of WWD, a news website about the fashion industry.

While the pandemic introduced a new way of enjoying events in the realm of cyberspace, the pandemic also brought the trend of the “behavioral immune system.” He explained, “When people feel threatened they show predictable behavioral responses, including becoming more conservative, more risk-averse, more insular, and do more stereotypical thinking.”

 

 

CEO of behavioral science consultancy Innovation Bubble Simon Moore told CNBC that consumers will look for “social proof” that people are going to shops before doing it themselves. Cathrine Jansson-Boyd, who lectures on consumer psychology at Anglia Ruskin University, added that social distancing measures were planted in people’s minds to the point it affects their behavior as consumers.

Jansson-Boyd added that governments are “kind of saying go out and try to be normal but the problem isn’t gone.” This causes cognitive dissonance, which refers to mismatched thoughts, feelings, and actions, causing stress and discomfort to a person. Consumers’ habits are expected to change during the course of the pandemic. Fagan stated, “It takes about two months to form a habit. And with lockdown going on indefinitely, these behaviors seem to be here to stay, even when it’s lifted.”

The pandemic affects all walks of life, including employment and consumer behavior. We can expect more events to be held online, blurring the lines between real life and cyberspace. We can also expect a surge in online shopping. Businesses will never be the same. We can try to go back to our old consumer behavior and habits, but it’s not going to be easy. In fact, the behaviors we developed during the pandemic will be present, affecting the way we shop for goods.