Consumers in Lockdown
As lockdown restrictions ease, we are entering into a new world for brands and retailers.
Consumers have been forced to stay at home in lockdown. This is a once in a lifetime situation that has never been seen before and hopefully never again. Will this impacted consumer behaviour long-term? Will consumers feel differently about shopping, leisure time and travel after restrictions have been lifted? How will consumer behaviour change because of Covid-19?
We have had 8 weeks, if not longer for some groups in lockdown. Long enough for new habits to be formed around shopping, lifestyle, behaviours. In fact, the repercussions of this pandemic might see consumers not getting back to ‘normal life’ as we knew for a year. So how do brands and retailers get on the front foot to ride out the storm and ensure they are positioned for growth when the economy picks up?
Consumer facing companies need to anticipate how consumers will feel, what will motivate them and how they can engage and provide confidence over the next 12 months. If consumer segments have changed during the pandemic and will continue to evolve during the aftermath.
EY have identified 5 potential consumer segments arising from the crisis:-
Get to normal (31%). This group’s spending has been largely unchanged, Daily lives were never really affected. They are the least concerned about the pandemic overall.
Stay Frugal (22%). This group is spending slightly less but some making some deep cuts. They will be trying to get back on their feet. They are amongst the most pessimistic about the future.
Cautiously Extravagant (25%). They are middle to high income. Very focused on health but relatively optimistic despite a strong belief that a global recession is coming. So will therefore spend more in areas important to them.
Keep Cutting (13%). Least educated group. and so least likely to be working. Making deep spending cuts. Changing what they buy and how. The pandemic was always a huge worry.
Back with a Bang (9%). Younger and in work. Spending much more in all categories. Their daily lives were most disrupted. Now they are the most optimistic.
Understanding these consumer segments and being able to identify and provide for their needs in the right way will be the difference between re-growing or falling by the wayside.
Retailers and brands will have to identify how consumer behaviour has changed and how it impacts their specific business. Changing to develop strategies that help them remain relevant and in line with consumer needs in a now forever changed landscape.
Market research – Conduct research to understand if and how your customers have changed.
Consumer profiling – Identify any changes in customer profiles.
Sales territory planning – Understand which outlets or products to prioritise in the next 12 months.