People are slowly getting used to a new way of living where walking from the kitchen to the living room has become the new commute to work and a-walk-in-the-park has become the #1 city trip destination. In the meantime, some are already daring to think ahead and asking the question ‘Will this self-isolation change our consumer behavior in the long term?’
Will we continue to cocoon at home, buy locally and limit all unnecessary travel? Or will we quickly fall back into old habits and go out, order a book from a multinational located on the other side of the planet and book a city trip to Tel Aviv because the hummus is simply way better there?!
Let’s look at some key changes to our lives today in quarantine. Based on consumer research and some early learnings from China we will look ahead to predict what the impact on the long term could be. While data of consumers predicting their future behavior should be looked at with caution, and there are clear cultural differences between China and Belgium, there are still interesting trends worth analyzing.
#1 Working remotely
At the moment (April 2020), we don’t have much of a choice. In line with government measures, from Belgium, to Italy, to the US, we are staying at home. Staying at home also means working from home. This means that many people have been forced to turn their living room into their new office. This has triggered an increase in sales of equipment to work from home, such as screens, laptops and headsets.
Employers are revising work policy and productivity measurement to steer employees through the mass change in the workplace. In this context, video conferencing tools such as Zoom, Skype, Microsoft Teams, Google Hangout, etc. have seen surges in use. That being said, a recent survey by the House of Marketing on the impact of COVID-19 on marketers shows that 42% claim that the main difficulty of working from home is the lack of personal contacts.
This change in working environment has the potential to redefine the workplace in the long term. In Wuhan, China, after nearly three months of working from home, offices are opening again. But it’s not quite back to normal. Different employees go to the office on different days of the week and the office hours are shorter. This might be temporary, but there is a good chance that homeworking will increase in the near future as it offers some benefits to companies, such as lower rent.
#2 Connected cocooning
After working hours, people are trying to find ways to make the forced cocooning more pleasant.
Due to limits on out-of-home activities, media consumption is increasing with TV and internet being the biggest winners. All popular social media apps are seeing an increase in usage with WhatsApp, Facebook and Instagram taking the lead. Even in times of social distancing, people like to stay connected to each other. Applications such as homeparty are gaining in popularity and initiatives such as e-aperos and skype-coffees are the new way to stay in touch.
While screen time might be increasing, from time to time people also like to disconnect. Old-school leisure items such as board games, puzzles, books and paint are booming.
Staying fit at a time when all gyms and sport centers are closed isn’t easy. Some choose to take a walk-in-the-park to get some fresh air and physical activity while others stay inside. In this case, people are also turning their living rooms into home gyms, sparking a boom in sales of sport equipment, dumbbells, home mats, etc. At the same time, some gyms have been very creative and created a series of online videos with home workouts or even live webinars with training sessions.
With restaurants being closed, people are rolling up their sleeves in the kitchen and spending their time cooking. Right before the announcement of government measures, people headed to the supermarkets in masses to stockpile shelf-stable foods such as pasta and rice, canned food and flour. This has led to an increase in total value sales in supermarkets, with a peak of 45% in the week of March 9th. While total sales have slowed down in the past weeks, products such as flour, binders, pastry and dessert ingredients are still flying off the shelves, revealing that baking is one way people are spending time at home. This is confirmed when looking at the top 100 growing categories in e-commerce in the U.S., with bread machines ranked #2 with a growth of no less than 652%. As a response to increased home cooking, many chefs have started to give live-stream cooking tutorials to inspire with new recipes.
Nielsen Report, COVID-19 vs FMCG
Will we continue to cocoon after COVID-19? In Wuhan, the lockdown measures have been lifted since the beginning of April. Schools, gyms and restaurants are slowly opening their doors again. However, people are keeping their distance and staying more at home. A recent survey showed that 86% of Chinese mainland consumers would eat at home more post-pandemic.
In Belgium, 65% expect the impact of COVID-19 to last 4 to 12 months. What is certain is that the above-mentioned solutions show that businesses can still connect with their consumers in innovative ways online. As such, this crisis has the potential to accelerate technology adoption rates among consumers. In this context, technologies such as virtual and augmented reality become more relevant than ever.
#3 The stay at home economy fosters e-commerce
As described in a recent article by our e-commerce specialist Julie Luppens, e-commerce is expected to continue to grow: “shopping online, avoiding mass contact, offers a huge advantage at insecure times like these”. This is confirmed by recent research: 27% of Belgians claim to have increased their online shopping activities. Many companies that have been lagging behind on e-commerce now see themselves forced to catch up and enter the online world. Small businesses that do not have a web shop are using alternatives such as social commerce, selling through Facebook and Instagram. Restaurants, in turn, are looking into takeaway and delivery options. Supermarkets are seeing their online shopping platforms explode. In Italy, e-commerce has grown in value by 162% since last year.
What happens when the quarantine is lifted? It is expected that people will discover the convenience of buying online and change their long-term shopping behavior. As many Europeans expect the impact of the crisis to last another year, this could mean that avoiding physical purchases and turning more to e-commerce may become a new habit. At the same time, businesses should take into account increased price sensitivity and lower consumer spending due to lower dispensable incomes and increased savings in times of recession.
Even in China, where e-commerce was already a routine reflex for many people, 89% of Chinese mainland consumers said they would be more willing to buy daily necessities and fresh products online after the pandemic. E-commerce peaks are stabilizing but still show a growth of 3% compared to pre-outbreak figures.
#4 Forget global - Let's go local
Buying local is nothing new. This trend has been growing for the past couple of years already. More and more people have become more attentive to ‘buying local’ and as such support local business. This argument has become even more valid in times where most local businesses have had to shut the doors of their physical stores. Initiatives such as wearelocal.be and bestellokaal.be are regrouping local businesses that have gone digital.
At the same time, consumers are looking more than ever for qualitative brands and products they can trust. Nielsen investigation has found that, since the outbreak of the virus, shoppers are steering away from products that travel long distances with multiple human touchpoints. In particular products such as dairy, fruit, vegetables and meats.
Is this a lasting trend and does it mean that multinational companies are doomed? That’s hard to predict. It is clear is that today, and even more so after COVID-19, consumers want and need to be informed and reassured about the origin and production of the goods they buy. From traceability to third-party selection, brands need to communicate about the measures they take to assure safety in the supply chain.
Looking at China, we learn that, while life is slowly resuming, product-sourcing concerns remain. As an answer to that, companies are reassuring their consumers by informing them about safety measures, disinfection routines, etc. Moreover, online to offline (O2O) platforms allowing delivery of fresh food from local retailers and suppliers have gained in popularity as large retailers ran out of some items during the crisis.
#5 Increased awareness of mental and physical health
Already before the outbreak of the virus, people were increasingly beginning to buy products that boost overall health and wellness. As the situation evolves, priority is given in particular to products that are essential to virus containment such as facemasks. It is predicted that, when quarantine is lifted, people will take even greater care of their health. Topics such as nutrition, mental health, immunity and hygiene will gain in relevance. Recent research shows that Belgians plan to purchase 7% more health & wellness products after the coronavirus compared to before. In China, 90% are already considering buying air and water purifiers and 77% are considering buying blenders and smart bands.
There is no doubt that the COVID-19 crisis is having an enormous impact on everyone’s life, be it directly or indirectly. Quarantine measures have changed the way we work, eat, exercise, relax, buy products, connect with each other and consider our physical and mental health. The current situation is far from perfect and clearly takes a heavy toll on many people’s lives. On the bright side, the new home-stay-economy has also offered new opportunities to existing and new companies. Businesses have shown themselves to be extremely creative by finding innovative ways to connect with their consumers and fulfill their renewed needs.
These new solutions are catering to needs that might have changed forever and consequently they have the potential to endure. It is of course hard to predict, but many trends are needs that were already evolving and that accelerated because of this crisis context. Even though 3 out of 4 marketers expect a change in consumer behavior after the Corona crisis, only 2 out of 3 marketers are preparing for this change. Don’t just sit back and wait until this is all over. Think a step ahead and look for burning issues you can turn into new opportunities.
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Knack, Ogilvy, Marketplace, Kantar Barometer, De Tijd, Stackline, Gondola, Nielsen reports 2020, Nielsen: tracking the impact on FMCG, Nielsen: expectation of the impact of COVID-19, Nielsen: COVID-19 concerns as tipping point for local brand growth, Nielsen: 'homebody economy' gains steam