The COVID-19 pandemic has accelerated the pace of change and business trends that were already existing. Like an earthquake that releases a pent-up force the economic shock of the pandemic will be seismic, forcing winners and losers as consumer behavior shifts.
Much of the organizational gravity that stood in the way of unlocking the 4Ms of Performance is now gone! We are not witnessing the massive restructuring of industries as was the case during the 2008-09 global financial crisis when electronics, banking, and the energy sectors fell-off the cliff. What we are witnessing is a great acceleration of trends that existed before the virus.
Online delivery service increased by the same amount in eight weeks as it had over the entire previous decade! Telemedicine experienced a ten-fold growth in subscribers in just 15 days. Online education, remote work conferencing and near-shoring all had similar growth increases.
The question: what is the unique opportunity this hyper-acceleration presents for your business?
In many ways, we are only at the early stages of the COVID economy fall-out/recovery. All businesses are facing challenging times, regardless of their market position. Given the speed of the virus’s impact and the great acceleration of trends it has fostered you will need to be bolder and more agile then ever to succeed.
Consumer Optimism Uncertain
The COVID-19’s impact on consumers has surfaced several unanticipated trends which are global in nature:
- Shifting to value and essential purchasing
- Flight to digital
- Disloyalty of established brands
- Healthier and more caring lifestyle
- Homebody economy
Shifting to Value and Essentials
Consumers are not optimistic about their particular economic circumstance over the near-term. Daily routines and financial stress on the average consumer is expected to last at least another 4-6 months. This will keep people mindful about spending and the trend is to spend-down to less expensive products/services while looking for great value.
Discretionary spending on travel, clothing, dining out, jewelry, new vehicles, and hospitality will continue to be sluggish. Food take-out, snack food, skin care, fitness and wellness will over perform.
Flight to Digital
There has been a major shift to online purchasing as consumers pivoted as the virus struck. E-commerce continues to grow across all product categories and that growth will continue even when in-store shopping normalizes.
In addition to digital purchasing, other services – curbside pickup, home delivery, and drive-thru services – have and will continue to see increased adoption rates.
Disloyalty of Established Brands
COVID-19 caused major supply-chain havoc. When consumers could not purchase their preferred product they changed their shopping behavior. Value, availability, and quality were now the main purchase drivers causing a shift in brand loyalty. Consumer disloyalty to brands had been on the rise, particularly with Generation Z’ers, and this trend has been greatly accelerated.
Healthier and More Caring Lifestyle
Consumers now seek out retailers that exhibit safety and enhanced hygiene measures. There will be a trending toward brands that demonstrate care and concern for employees, customers, and local community.
To my mind, the most significant and profound trend regarding consumer behavior is the move toward a ‘homebody economy’. Confidence in government, particularly State and Local, has taken a backseat in relevance as consumers now wait for the further development of medical safety measures and a vaccine.
There will be a resumption of ‘normal’, out-of-home activities, such as shopping, but attending large events and air travel will be back-burnered. The trend toward ‘at home activities’ and meeting in small social groups will be the norm for some time to come.
COVID-19 greatly accelerated the pace of changes that were already in-play with regards to consumer purchasing behavior. Every B2C business should be adjusting to these changes as they are here to stay.
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