We look at 5 ways in which COVID-19 is impacting consumer behavior globally.
COVID-19 has fostered fundamental changes in the lives of people and the way businesses, governments, institutions, and everything else operated on planet Earth. With severe lockdowns and restrictions in place across the world, people are slowly adapting to the confined lives that they are supposed to lead in order to tackle the virus.
With a rise in the number of coronavirus cases worldwide and a significant increase in the death toll, governments are trying their level best to curb the situation before it gets too late. Already classified as a pandemic, there are more than 2.5 million reported cases of coronavirus worldwide. With such a large number, it is essential to follow safety practices at both an individual and societal level. However, what changes are being witnessed when it comes to consumer behavior amidst all these new restrictive regulations? Let’s find out:
Change in consumptive practices:
The first and foremost change that can be observed among consumers is the kind of consumption they are practicing in the wake of COVID-19. A large number of people across the world have undertaken major cuts in their shopping habits. The availability of only essential items has resulted in people being more conscious about the kind of products they buy on a daily basis. Due to social distancing, more and more people are turning to e-commerce websites for their needs, and research has observed a significant growth for companies like Amazon, and similar online retailers. Brand sales have fallen significantly as people have lowered their discretionary expenses.
Even as the virus eventually dies down, the economic implications of COVID-19 will cause less expenditure on non-essentials, and as recession sets in, people will focus more and more on only those products that come under the essential category.
A changing landscape for travel:
The travel industry is considered by many as an accomplice in the spread of coronavirus across the world. Major travel restrictions and non-issuance of visas in multiple countries has not only disrupted commerce but has affected individual lives as well. Apart from social distancing, the need for self-isolation has forced people to let go of any traveling plans, whether business or personal for an undefined period of time.
Due to restrictions on travel, both individuals and businesses have shifted to teleconferencing as a means to stay connected in this era of self-isolation. There has been a significant rise in the popularity of face-timing applications like Zoom which has gained a sizeable market share ever since the lockdown. The travel and tourism sector across the world will witness a steep decline across the world as more and more people resort to virtual connections in order to satiate their interests.
The most severe impact that can be observed is in the way consumers have shifted their focus from certain industries. Healthcare, AI, and IT sectors have transformed into areas that garner the maximum focus from both individuals and businesses, and conversely, beauty and wellness industries are facing a severe decline in their customer base. People’s priorities have shifted and these industries need to rapidly transform the ways in which they operate in order to stay in business.
More and more people are focusing on self-care and self-preservation at a time like which translates into the prioritization of skincare and sanitization products over make-up and other beauty care products. Brand associations are tanking as people turn towards affordable products that focus on the ‘self-care’ aspect that people are now invested in.
Digital Transformation: Change in past-time activities:
With a complete cut off from the public sphere, all physical sources of entertainment have gone for a toss. Moreover, with a large number of people adapting to remote working and lack of access to public spaces, the digital media industry has seen an unprecedented rise in the customer base. An OTT giant like Netflix witnessed a heavy influx of new subscribers with respect to the pandemic situation and even the gaming industry is observing a boom in its market share as more and more people turn to digital activities for entertainment purposes.
When it comes to finances, cashless and contactless payments has resulted in a boom in e-transactions. More and more financial institutions are now looking towards a transformation in their services and rendering them digital-friendly in order to enhance their efficiency in dealing with their customers in lieu of the pandemic.
COVID-19 has widened the gap between communities and has enforced the evolution of highly individualized lives. As more and more people across the world are resorting to self-isolation, there are several psychological implications to these changes as well. What we hope to see is an eventual redressal of the situation that has come about due to the pandemic.