According to KPMG, a new consumer is emerging – one who is financially constrained, more advanced in the use of digital technologies, more thoughtful and selective in decision-making and keen to see COVID-19 as an opportunity to reset values in the world.
“The changes we’re seeing are likely not short term. Most consumers believe they will be living their lives very differently for the foreseeable future. Businesses will be faced with new challenges in this new reality. Our research identifies three areas to inform organisations’ decisions and plans.”
The economic impact of COVID-19 will influence behaviours for some time to come. On average, 40% of respondents are financially constrained and are, therefore, reducing their discretionary spending. New and persistent consumer segments have emerged based on the economic and psychological impact of COVID-19. Those most affected, economically and psychologically, are less inclined to pay a premium for branded products or nice-to-have experiential factors and are deferring non-essential purchases.
A new consumer is emerging, it is being seen that they are digitally savvy and embraces the ease with which they can interact with organisations through digital channels. Organisations have responded to COVID-19 with high levels of innovation, including greater digital access to purchasing and customer support. Consumers of all ages are keen for this to continue.
Consumers increasingly purchase from organisations they trust, at a time where trust is becoming more complex to build. Historically, trust was driven by whether organisations delivered on the brand promise. Now, trust is multidimensional and nuanced – trust that companies will continue to put the consumer’s needs first; trust that the consumer will be safe dealing with them; and trust that their data will be secure and protected. In addition, younger respondents are concerned about a company’s environmental and social practices.
KPMG feels that this new reality means that physical retail will need to offer consumers new reasons to purchase offline. With price and convenience being key to consumers’ decision-making, retailers will need to develop their online and last-mile logistics and delivery capability and manage the balance between home delivery and in-store product ranges.