In India, despite pockets of revival, net consumer optimism has decreased, and most consumers continue to expect an enduring impact from COVID-19.
Health and safety is the primary concern for people at large. Covid-19 has significantly impacted the way people lead their lives, resulting in about ¾ of Indians being more cautious in the way they spend their money.
Over 56% of Indians feel that personal finance has taken a major hit due to COVID-19 compelling them to cut back on discretionary expenses. ~94% believe it will take about 3-4 months for their routine to change and completely recover from the financial impact. However, 70% of people believe that they might get some respite in savings by Diwali, not so convinced are the lower-income groups though.
Some categories are gaining many new customers who intend to stick with the behaviour post-COVID-19, including online fitness and wellness apps, store curb side pickup, and physical telehealth. In contrast, consumers demonstrate less of an appetite to continue with other growing categories, including restaurant curb side pickup, professional video conferencing, mental telehealth, and remote learning for children. Tier 1 cities are leading the growth of these new segments however, the nature of adoption almost mirrors itself in tier 2 cities, with a ~10-15% variance.
Even though many countries have lifted stay-at-home restrictions, most people still feel the pull toward a “homebody economy.” Most consumers across countries still feel they are not back to “regular” out-of-home activities.
Some of the prevalent consumer sentiments in regards to the current circumstances are-
1. Ticket size matters:
Consumers are more likely to indefinitely postpone or cancel purchases for bigger-ticket items such as jewellery, vehicles, and home construction or renovation than for smaller ones. According to research, Indians are less likely to forego their purchases at this point—a sentiment that might change should the economic conditions decline.
2. Value Polarization:
A study revealed that people in India are planning to complete purchases in a variety of categories in the not so distant future, approximately one in three stated that they intend to spend less than originally planned. However, there was a clear distinction between price and value.
3. Preference for trusted brands:
Even among those planning to spend less than initially intended on a purchase, up to 70 percent consumers prefer to stay with their intended brand—albeit by actively looking for a discount or promotion, or by switching to a cheaper product within the brand.
4. Uneasiness and Guilt:
Amidst the uncertainty of the continuing global crisis, there seems to be a sense of guilt related to discretionary spending, even among those that can afford it—particularly for some more conspicuous categories. Similarly, consumers who planned to trade down or forego purchases of large domestic appliances believe that it didn’t feel right to spend, given the current social context.
5. Digital shopping accelerated, but physical stores retain appeal:
The COVID-19 crisis has naturally shifted consumers toward digital shopping and engagement channels. Yet, findings show uneven rates of acceleration across various types of online channels. Multicategory online marketplaces could be poised to gain the most momentum within the coming months. In India, as stated by the research, there’s a higher intent to visit exclusive-brand stores than multi-brand stores.
With the New-Normal; so, to mention, the role that brands need to fulfil is far from usual. Businesses have had to re-adjust strategies based on how the oscillating trends unfold itself. There has been a significant cut-down in business expenditure and operational costs, with maximum curbs happening across hiring, BTL promotions with almost 60% of expenditure being curtailed, followed by ATL, and lastly sales promotion budgets slashed by ~40-45%.
However, as businesses must thrive and brands must sustain its hard-earned equity, there has been a noteworthy shift in consideration by 97% of brands, to hop onto Digital. ~34% brands that have an existing digital arm; have re-jigged their supply chain and increased spends on digital, with 23% more businesses are focussed on selling on e-commerce platforms, due to on-ground/retail limitations.
I certainly believe that this is the most feasible time for businesses to become brands, if it’s done right, that is. Marketers today, have started to realize the value of digital in both, brand building and customer acquisition – however, the need of the hour is for brands to build consumer confidence and establish itself as the brand of true value – so that in the new normal, months from now, the effort and investment for customer acquisition is subsidized and it reaps the benefit of the equity that the brand has created for itself. Making unrealistic claims for quick fame must be avoided – as it may get a short-term PR gain but a long term negative image. It does more harm than good to the brand.
Here are 5 action points that businesses should undertake to prepare for the next normal
1. Don’t simply restart: Rethink your store.
Companies across are spending substantial time and resources in implementing modern safety policies and operating procedures as lockdowns ease. Digital acceleration, however, would entail a fundamental reassessment of the role stores will play in the next normal for consumers, and how to ensure a positive experience. Companies that are both digital and offline, rather than either, will be better positioned in the days ahead—especially if they can use both to build a mutually reinforcing customer ecosystem.
Case Study: BK’s Social Distancing Crown
2. Earn and maintain consumer trust.
Currently, consumer sentiment is on the lines of “flight to safety”. Brands have gained trust, potentially accentuated by an environment of uncertainty and inability to test or experience products before buying them. Adversity is an opportunity for some, it’s given a chance to homegrown brands to start-up and meet essential requirements (read: sanitizers, food items, kits, medical kits et). Although, their growth is largely driven by spill-over demand from established brands, it’s a good time to build a brand of their own.
Case Study: Burger King Precautions
3. Disseminate Value.
When consumers look to buy goods that meet their value requirements, it will be of vital importance for companies to be able to quickly communicate – to a store or an online customer, of how their products meet those criteria. This includes rethinking the “star products” to highlight, as well as reconsidering overall product range and promotional calendars to effectively highlight relevant products and deals, and by providing competitive entry price points.
Case Study: #Veetismysalon
4. Follow the consumer.
Today, customers engage with multiple channels and touchpoints, including official brand websites, social commerce, online media, exclusive brand stores, and multi-brand stores. As consumers use more channels, businesses need to ensure that their experiences at each touchpoint are consistent, delight generating, and further enhancing consumer understanding by businesses. This requires brands and companies to not only be open to shifting their marketing messages but also investing in analytics capabilities and Mar-tech solutions to bring in more insights and efficiency.
Case Study: Deliveroo Restaurants Return
5. Communicate purpose.
Customers and employees respect brands that demonstrate social intent and genuinely convey how the crisis has impacted their level of service and the overall business. As marketers plan for what’s next, their marketing tone and messaging will have to be re-thought and adjusted to match the current reality of consumers.
Case Study: Nissan – Ode To Empty Roads
While the situation seems grim, I do believe in the resilience of our people and businesses in India. Let’s hang in there, taking the best of care, first health-wise. Let’s hold on and continue to delight our customers. Finally, let’s hang together like the communications industry so we don’t hang separately!
Data Source: KPMG Research, WARC Reports, ThinkWithGoogle, MMA Global