Consumer patterns and implications for brands & retail
Covid Impact Report
Consumer Patterns & Implications for Brand & Retail
Covid-19 has created several new consumer segments as a result of varying attitudes and spending habits are changing.
OVERVIEW
Consumer concerns are centred around health, the economy (including income and unemployment), and climate change which is still a prominent issue.
80% are not willing to return to life as it was.
Driven by ongoing concerns about health and finances but also as a result of rethinking and resetting priorities.
50% expect to have less disposable income.
Driven by high unemployment and the imminent reduction of government income assistance.
A high priority to build savings.
As a precaution, to buy residential property to live in, or to invest.
Only 9% feel they have discretionary funds and want to spend on discretionary items.
Consumers have adapted their shopping behaviour.
As a result of the pandemic and lockdown restrictions; consumers have adapted to online channels at the speed of lightning.
With more consumers adopting new ways of doing things, the online grocery channel has increased market share.
Convenience customers are going to drive a surge in e-commerce
Retail entrepreneur Ruslan Kogan, says the next wave of e-commerce growth in Australia will be driven by consumers interested in convenience as much as price.
Kogan predicts e-commerce will surge from 8% to 30%.
If Kogan’s prediction is accurate, that still leaves 70% for physical shops (which may also sell online)for shoppers who prefer local, personal customer service, unique merchandise, instant gratification, or other attributes satisfied best by physical shopping.
Keeping it local…
Independent and specialty stores are benefiting from consumers shopping closer to their location and wanting to support local businesses.
Key reasons consumers are shopping locally:
I’m supporting local businesses
I’m shopping more at stores that are closer to my location
I was looking for better quality products
I was looking for products that I couldn’t find at larger retailers
I was looking for better prices
I always shop at this store
Shopping locally is more important for Insulated spenders.
Constrained or insulated?
As published in Nielsen’s “Reboot or Rebound – The New Normal For Australia” communication, the polarisation of consumer spending habits continues…
Insulated spenders prioritise convenience whilst Constrained spenders prioritise value. Constrained households do not necessarily correlate to lower income.
In this report we unpack how brands and retail can cater for the two types of spenders: constrained and insulated and what trends we can expect to see as the retail landscape continues to evolve and change.
*Data Source: Foreseechange, Charlie Nelson
