The impact of COVID-19 on consumer behavior

The impact of COVID-19 on consumer behavior

The impact of COVID-19 on consumer behavior

The impact of COVID-19 on consumer behavior

The impact of COVID-19 on consumer behavior

The impact of COVID-19 on consumer behavior

The impact of COVID-19 on consumer behavior


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Source : Marketing Catalog
Date : 09/06/2021

: Mr Feng


The COVID-19 crisis is affecting consumer behavior and thus the way in which marketing can be used. The use of marketing during (and after) the COVID-19 crisis shows (and will continue to show) similarities with the way that marketing is carried out during economic downturns. Dekimpe and Deleersnyder (2018) have summarized the most relevant studies on the effectiveness of marketing efforts during downturns and upturns. However, this specific crisis, which will be followed by a recession (contraction), displays characteristics that differ from those associated with a recession. For example, as well as a fall in consumption due to lower consumer confidence, lower incomes, consumer defaults on loans and reduced financial means as a result of falling share prices, shifts in consumption are also occurring between product categories. In parallel to these economic developments, the imposition of social distancing is also affecting the drivers of consumer behavior.

Consumers are being challenged to re-evaluate their life priorities, which may give rise to new values and spending criteria. In this respect, Euromonitor International (2020ab) has observed a focus on family/community/self, health and digital solutions, and expects this to last into the long term. More specifically, Euromonitor has identified various megatrends, including:

Connected Consumers: both consumers and businesses are showing stronger emotional connections with reliable suppliers in their search for stability and value. In this respect, digitalization is more important than ever and shows how consumers, employers and employees may be able to keep operating in the future. Services such as Zoom and Google Meet are proving to be indispensable in many more situations than we were previously aware of. Moral and ethical values (referred to as ethical living) are also receiving greater attention. In relation to this, Euromonitor has mentioned the tendency of consumers to become more engaged with products and services and to attach greater value to connections with reliable, often important and well-known brands such as IKEA, Knorr, Maggi and Disney. We also observe that consumers are looking for reliable information about COVID-19 and its consequences. This is, for example, reflected in greater attention being paid to non-commercial websites and TV broadcasting.

Healthy Living: a healthy lifestyle and healthy habits inside and outside the home are becoming more important, and a more holistic approach to wellness is being adopted.

Middle Class and Lower Class Retreat: as a result of COVID-19 and its economic consequences, we observe that the middle and lower economic classes are struggling to maintain their economic position and lifestyles. We observe that unemployment in the USA is increasing dramatically, and is affecting about 25% of all US citizens. In Africa, the situation is even worse. Middle class retreats can be observed in Europe in particular. This is leading to behaviors such as sharing products (Eckhardt et al. 2019), renting and borrowing.

Shopping Reinvented: social distancing is leading to a shift to online shopping among many consumers. This includes both groceries and durables. As a result, online stores are experiencing enormous increases in turnover. We also observe that consumers who were not previously familiar with online shopping are now becoming ambassadors for this way of shopping. The expectation is that at least a part of the shift to online shopping will be permanent. The COVID-19 crisis has also led to a move towards buying more locally produced food. For example, the Streetify e-commerce platform brings together buyers and local stores.

Shifting Market Frontiers: we observe that large cities reach saturation when social distance has to be maintained. The space offered by free zones (parks, avenues, shopping streets) and nature (such as woods and beaches) is insufficient. As a result, a shift to living in mid-size cities is expected. It is also believed that certain markets have reached their limits, both directly as a result of COVID-19-related measures (including the travel industry, particularly aviation and cruises, and the restaurant industry), and indirectly, as a result of the developments mentioned above (such as farming (both intensive livestock breeding and intensive agriculture), mining and fast food).

We observe changes in consumer spending as a consequence of these trends.

Source: Euromonitor International

The impact of COVID-19 on retail sales.


Figure 2 illustrates that, with the exception of fresh food, packaged food and home care, COVID-19 is expected to negatively affect consumer markets. Other data sources show increases in infotainment (Netflix, for example, attracted about 16 million new subscribers between April and June. Games, puzzles, etc. are also increasingly popular: the board game Trekking the World generated revenues of about $100 K in 1 week), hygiene products and wellness, digital products, gardening materials, do-it-yourself products (+ 25%), streaming services, furniture (+ 8%), and consumer electronics (16%). All this reflects the feeling that the home is a healthy bubble.

Many of these and other products are bought online. As an example: in the Netherlands, sales by online stores in the non-food sector rose by 60–70% in April 2020 (compared to normal growth of 16–18%), according to the GfK market research agency. In May 2020, online sales were 50% higher than in May 2019.

Substantial decreases in consumer sales have occurred in areas such as cars (sales are 40–50% down on the same period last year), shoes (down 45%), clothes (down 60%, even strong brands such as G-star and Nike are facing much lower sales and the Belgium/Netherlands/Scandinavia-based FNG chain is close to bankruptcy), visits to restaurants and bars (hence also alcoholic consumption, which has resulted, for example, in a major loss for Heineken in the 2nd quarter of 2020) and travel and outdoor recreation (events, museums).