Accelerating shifts in consumer behavior and consumption will cast a radical new path for manufacturers.
By Laura Gurski, senior managing director, North America lead for Consumer Goods & Services, Accenture
The COVID-19 pandemic is reshaping so much about the way we live, work, connect, consume, and even think. And it is all happening so quickly. Trends that have been progressing steadily for years have been suddenly accelerated to a degree no-one could have predicted. At the same time, consumer demand and channel preferences have seen large and sudden shifts. Digital commerce, for example, is expected to have increased by a huge 160% among new or previously low-frequency shoppers according to Accenture research.
Throughout the crisis, Accenture has been tracking these evolving patterns of consumer behavior, highlighting the new habits being formed and the profound changes that are happening in what we value and the way we shop. One conclusion is inescapable: the crisis will define consumption for the next decade. Many of the changes we’re seeing are likely going to be permanent. There’s no going back to the pre-pandemic world for consumer manufacturers.
Health-conscious, cost-conscious consumers
So what can we say about how consumption is changing? Unsurprisingly, people remain concerned about the health impacts of COVID-19, although it’s notable that where infection has appeared to stabilize, health fears have subsided. Personal hygiene habits have changed dramatically, with most people (90%) handwashing more often and 79% cleaning surfaces in the home more frequently. This focus on staying clean and healthy will likely remain for some time to come, with proof of good hygiene becoming a key part of manufacturers’ ability to retain shoppers’ trust.
Economic anxiety remains high across the board, even in locations where outbreaks are subsiding. The proportion of consumers now worried about their personal job security (65%) is the highest we’ve recorded since the pandemic started. The fact is, as part of their reset strategies for the months ahead, manufacturers will need to adapt to a higher number of consumers inclined to tighten the purse strings.
Home is the heart
One inevitable consequence of lockdowns and stay-at-home orders is that the home has become the heart of the consumer experience. As well as surging to digital commerce, consumers are switching to omnichannel services like home delivery, digital chat, and virtual consultations. It means that manufacturers will need to step up their digital capabilities to meet these new preferences.
In fact, many are doing so already. Beauty brand Kiehl’s, for instance, has taken its personalized consultations online via a “healthy skin hub”. And just look at how Carlsberg is supporting bars in its homeland by asking Danes to “adopt a keg.” Every time someone drinks a bottle or a can of Carlsberg at home, they scan the label and add it to their virtual keg on the Carlsberg’s website. Post-lockdown, they can exchange it for a real beer when the bars reopen.
There are socially positive sides to this re-centering around the home too. Nearly four in five households with children say they’re feeling more connected as a family. And with more time to spare, three in five consumers have been taking the opportunity to build their skills in areas like cooking and homebrewing. More than half have been working on home improvement. Savvy manufacturers can tap into this creative experimentation and these newfound passions to build deeper affinity with their consumers.
Think safety, think small
How permanent is the shift to home consumption? It looks certain to outlive lockdowns and stay-at-home orders at least. Our research shows that, demand for local goods—and local manufacturers—is growing. More consumers want to shop at neighborhood stores and want to buy more locally sourced produce. Manufacturers can respond to this demand by looking to highlight the local provenance of their products. They should also consider working with smaller-format local stores and venues, helping them adapt to new social distancing and sanitization requirements at the same time.
Coming through stronger
We’re all yearning for a return to some kind of normality. But the reality is the world has changed. And with it, people’s attitudes, consumption preferences, and shopping behavior. Manufacturers can use this moment of intense disruption as an opportunity: to reset and reinvent the business for a more uncertain world and a new set of consumer needs and expectations.
Laura Gurski is senior managing director and North America lead of Accenture’s consumer goods and services practice where she oversees the development and delivery of marketing, customer service, commerce and sales transformation services.