Imagine it is September 2020 and we are meeting over lunches in our favourite restaurants, sweating out in gyms and buying home supplies in supermarkets. We can finally meet face to face. But things have changed. COVID-19 has drastically changed how we behave, interact and operate at least for time being. Yes, we are changing and there are certainly new changes in consumer behaviour in the times of the New Normal which are worth talking about.
We are witnessing a massive metamorphosis at a velocity that we have never experienced before, sparked by fear and anxiety, multiplied by social media, and encouraged by our governments and civil society. These changes include frequent hand-washing, going out with masks, working from home, and even stocking and hoarding household supplies.
Also Read: Minding your Minds during COVID Times – 7 Ways to Relieve Stress and Anxiety!
With Twitter launching the handwashing emoji, Thailand using pedestal push floor number button its Elevators & Robot Food Delivery in Northern California, we are witnessing how companies are responding to our behaviour changes by responding to the ‘new needs’ mushrooming due to Corona Pandemic.
Will Indians demonstrate Changes in Consumer Behaviour with respect to Lipstick Effect and go for Revenge Buying?
The Lipstick Effect
The Lipstick effect occurs when a consumer continues to spend money on small and reasonably priced indulgences, especially during the time of recession or economic downturn or when they have little cash in the hand. At such a time people do not have enough to spend on big-ticket luxury products or services. But they still find the money to purchase small luxury items, such as premium lipstick.
During Unlock 2.0 and in the coming months, Indian consumers may demonstrate this lipstick effect and forego big-ticket retail purchases but may indulge in reasonably priced items. This may mean that the main decision-maker of the house will always show loyalty to her preferred brand on special occasions like birthdays and indulge in premium products to make the family happy. This means even in times of economic distress, valued brands can expect to up-sell. The lipstick effect has helped brands and companies survive such crises before. But changes in consumer behaviour and its real effects to aid the Corona-hit companies due to the bruised economy are yet to be seen.
Lipstick Index to Nail Polish Index to Kajal Index
During the 9/11 terror attacks, lipstick sales had risen in the months after 9/11 in 2001, it eventually came to be regarded as a reliable metric for determining troubled economic times as it indicated that buyers were opting for less expensive products and this indicator was termed as the ‘Lipstick Index’. Then came the concept of the ‘Nail Polish Index’, with few economists suggesting it as a more realistic indicator of economic distress.
During Corona times, the use of lip-obscuring mask usage and lockdown-mandated lack of socialising occasions- indicates that Lipstick Index has perhaps outlived its usefulness. In fact, COVID-19 preventive measures have not only masked the relevance of lip colour but also mandated hands must be in gloves, the usefulness of nail polish is thrown into oblivion and so is the reverence of the Nail Polish Index.
Cosmetics majors worldwide are realising that in such a scenario sales of Mascara and Kajal will shoot up, at least in short term. They are contemplating the measure of economic distress by probable growth of sales of Mascara and Kajal by devising the Kalajstick Index or Mascara Index, which economists think is a more suitable alternative to the erstwhile Lipstick Index. Howsoever, if Indian consumers will demonstrate appreciable changes in consumer behaviour with respect to Kajal or Mascara Buying is still to be realised.
Revenge Buying
Revenge buying is quite popular these days. It is actually a curious phenomenon of indulging in excessive buying after a long time because of mandated restrictions. In Hong Kong, this unique consumer behaviour pattern of revenge buying was seen post lockdown after the government opened malls and retail stores.
Brand Hermes in China recorded a record $2.7 Million in sales on the day it reopened. This shows that consumer behaviour may take a U-turn after the lockdown gets underway.
Will Indians go for revenge buying still to be seen with the unlock 2.0 in place? But research indicates a small pivotal group of those on a shopping spree will take a U-Turn and go for revenge buying akin to a trend currently seen in China.
12 Changes in Consumer Behaviour Trending Now in New Normal
Let us review a few recent trends and changes in consumer behaviour in the context of the new normal.
1. The erosion of confidence and prevalence of a maintain-mentality
The COVID-19 outbreak has certainly caused mayhem and fractured our trust with a fear that people and places carry an invisible threat. Taking decisions on larger issues like holidays, places and cities of work, eating out, buying apartments etc. has become a complex and anxious decision. Experimenting with new products or services is no more a natural reaction during such a time of insecurity. People are clearly postponing purchase decisions. Also, there is a growing feeling of economic insecurity, leading to a saving mentality while curtailing non-essential spending, and high price sensitivity. This is one of the major consumer behaviour changes that have a deep impact on us.
“A maintain-mentality is more prevalent than gain or grow mentality right now”
2. Putting more value on family
The Pandemic has certainly taught us to get back to good old familial values. After some initial lamenting, people are now figuring out how to make the best of this and putting more value on spending time with family and loved ones. We are certainly reconnecting with families & friends like never before.
3. Preference for cocooning and home comfort
With self-isolation and social distancing being the norm of the day, our homes have become the epicentre of our life and daily experience. With the ever-increasing average time spent at home, growing work from home culture and mandatory homeschooling of kids, the comfort of home has become our centre of attention. This means there is a considerable rise in the proportion of home spending and home improvement products.
Also Read: A Sneak Peek into how the Future Workplace Post Lockdown will look like!
4. The priority for shopping local
The ever-increasing cocooning at home is tantamount to staying more local with an increasing preference for convenience and safety. Proximity, stock availability and product origin are now key considerations for shoppers who are no longer willing to venture out far to get their favourites.
Clearly, we have started relying more on neighbourhood mom & pop stores and giving them new life by ditching the supermarkets. The Familiar is more Valuable now. Promotions and deep discounts are not enough to drive traffic to the previously frequented stores.
5. Rise in individualism, self-dependence and self reliance
People have certainly become more self-dependent over a period of time with lockdown forcing us to abandon our domestic help, drivers and other old habits like excessive online ordering. We have become more accustomed to cooking at home, doing household chores, and washing our utensils. There is a rise in products that make us independent like dishwashers, cleaning robots & vacuum cleaners, preference of personal cars over public transport.
It is important to note that while consumers see ride-sharing as a risky option and will avoid public transport, there is an ever-increasing preference for using their own personal vehicles for the commute. There is a clear big opportunity for the automotive industry in the coming months ahead!
6. New users are driving e-commerce growth
One of the things which the COVID pandemic has taught to society is to go digital. Even the older generations are now comfortable with the online ordering of products and other digital channels. The older generation is a new consumer segment who have successfully overcome the barriers to trials like account setups and are digitally literate now. This means e-commerce has earned itself a new and promising user base.
7. Rise in the internet consumption and connectivity prospects
Mobiles are for calls again and we are reconnecting with families & friends like never before. Zoom, Google Meet, Cisco Webex and other apps are connecting us swiftly, and we are generously giving time to family. This means connectivity from home is skyrocketing as people are seeking to reach out to their loved ones.
Consumers are spending more time viewing social media and binge-watching online streaming videos. Video consumption patterns have skyrocketed during the new normal. This means brands now have unique opportunities to reach their audiences directly via online media.
8. The upsurge of wellness at home
With the gym closed and outings comprehensively curtailed, we are working out at home with our focus on Heath at Home. Many of us have enrolled on online dance & Zumba classes, with fitness instructors quickly moving online. Yoga on zoom and download of fitness apps are all on the rise. The Sale of fitness equipment and download of fitness apps are all on the rise. The ‘health of the family at home’ & concept of ‘health at home’ is of our utmost priority.
Also Read: Holistic Health and Wellness – Holistic Approach to Health & Weight Loss
9. The Virtual replacing the actual
There is a shift toward being virtual in the ways of communication across learning, working, transacting and consuming. From Virtual Dating, Virtual Fitness, Virtual Office, Virtual meetings with Friends, Virtual Seminars, Virtual Classes, Virtual Watch Parties on Facebook, to Virtual Office Pizza Parties we are doing all the things that can be done virtually.
10. Preference for brands which are focussing on the needs of consumers during the COVID times
The consumers are certainly impressed by brands which continued to provide necessary services, supplied essential items, contributed to the cause of COVID relief, made changes to help consumers and pledged to make society a better place by charitable contributions during the times of the new normal. The brands which shifted their communications to cover sustainability, community aid, and support gained a definite edge. This is one of the major changes in consumer behaviour which is shaping new consumer habits and has a major impact on how brands shall address this rising concern.
11. The consumers going contactless
Companies and brands which are offering options of contactless payments and other payment methods like phone and mobile device payment options are the friends of choice for shoppers who are not comfortable handing over their wallets to others.
12. The Acceptance of Authority
We are seeing ourselves following what we have been told to do with the government intervening strongly during the Corona Pandemic. We are dependent on the views of experts and the government to comply with safety protocols. This has put a major focus on people lending real weight to the central authority which was eroded in the past few decades. Accepting authority is evident after we diligently followed travel limitations, self-isolation and lockdown officially mandated by the governments. There is no doubt a greater acceptance of the role of government, companies & the experts in the society.
