Seven ways how consumer behaviour is changing for good

Looking beyond the current Covid-19 pandemic and economic crisis, seven trends in consumer behaviour are here to stay.

Much has been written in recent months about how the Covid-19 crisis and the consequent lockdown are shaping consumer behaviour. Clear is that sudden and unprecedented lifestyle changes are having instant repercussions on the preferences and priorities of consumers.

KPMG is among the organisations that has been tracing the progress of consumer sentiment during the crisis. As Australia’s economy starts its slow yet steady process of opening up, KPMG’s economic experts Sudeep Gohil, Amanda Hicks and Carmen Bekker have highlighted the lifestyle changes that might just be in for the long haul.

For starters, Australian consumers are leaning heavily towards patronising local businesses. Part of this has been driven by physical considerations during the lockdown, with most preferring to shop locally so as to avoid prolonged travel and exposure to crowds at larger stores.

However, the authors highlight that this preference runs deeper. Consumers in Australia are determined to do their bit to support local businesses through this crisis. In fact, well over 80% of Australian consumers have indicated that they would be happy to spend more for locally sourced products. KPMG’s analysis suggests that this sentiment of solidarity has been building up since the bushfires at the start of 2020, and has been consolidated by the present crisis.

“Back to basics” is the second tendency among Australian consumers that might be here to stay. This applies to lifestyles – as people hunker down and spend more time with family – as well as to consumption patterns as people shop for necessities and luxury goods are shunned.

According to the authors, the lockdown pushed many to reevaluate their priorities, which paves the way for a more permanently simpler lifestyle. This links to the third change put forward by the firm – a shift in the definition of value. Consumers are questioning their consumption of luxury brands and goods, while the definition of ‘necessity’ is growing ever more basic.

Trend four and five have to do with technological changes. Firstly, the lockdown has led many to realise that key functions can be served in the virtual space. This can range from a business meeting, to an online cooking class, to drinks with friends. Consumers have quickly grasped how to operate in a virtual environment.

The second tech-related change is accelerated digitalisation. As business meetings, cooking classes and social gatherings move online, the demand for high-speed connectivity, enhanced virtual tools, cloud technology, AI-based interfaces, online retail channels and a whole host of other digital applications is expected to skyrocket. Virtual means of operation are becoming permanent fixtures for many businesses and operations, which is sure to accelerate the digitalisation process.

The sixth change identified by KPMG is an injection of fear in the consumer market. The pandemic and all that came with it caused anxiety or even panic among consumers, which is changing the way in which businesses operate. As pointed out by the authors, some businesses have rearranged themselves to feed off this fear, while others grapple with fear among their employees. A degree of inhibition is expected to persist for the near future at least.

Closely related is the importance of trust in the business environment. During lockdown, trust in a brand became central for consumers, for health and safety reasons among others. Once again, KPMG points out that the need for trust runs deeper than the hygiene and safety of products, and extends to an emotional connection and a sense of community that has emerged during and after the lockdown.

The interplay of these seven changes will play out in different ways across Australia’s business environment going forth. Some businesses will have to reorient themselves completely, and will have to gradually rebuild in the post-crisis scenario. Others might have been hard hit, but will recover relatively quickly if they adapt to new consumer preferences. Other might not even have to reorient their operations, but just have to wait out the rough patch. Each segment will have to design and embrace a unique strategy as they understand they cater to the post-pandemic consumer.