Consumer trends and what it means for brands in the coming days
2020 changed a lot of things for all of us. To describe the impact of the pandemic for us in India – and globally – would be full of understatements. And as we all can attest to, the last 18 months have also forced us to adapt and change in every way: from work to personal life, from how we connect with our friends and family to how we travel. Digital penetration is one such area which saw a massive jump due to COVID19 and its attendant restrictions. Adversity often brings out the best in people; COVID19 provided a similar impetus and brought along rapid transformations in both consumer behavior and the response from the retail industry. Retail sales in September this year were at 96 per cent of the pre-pandemic levels of the same month in 2019 according to Retailers Association of India (RAI). Along the way, we saw trends and patterns that really took root a decade ago but were provided with tailwinds by the pandemic.
Below are the 4 consumer trends we have our eye on for 2022 and beyond.
From “reactive care” to “preventive care”
One of the positive changes in consumer health during the pandemic has been an increased focus around staying healthy. Today more people are aware of their own personal health and the risk factors associated and hence are more interested in staying healthy. As a result, we’ve seen more people running, walking, or cycling on a regular basis. As per some surveys run globally by Deloitte, Indians today lead the pack globally when it comes to increasing their spend on health and wellbeing. Initially driven by acute aspects of the pandemic, we are now seeing people motivated by the need to stay healthy through preventive care.
From “Do it for me” to “I can do it myself”
Pre-2020, we were all about the ‘do it for me’ economy. Going to the hair salon, going out for dinner and meeting with a personal trainer were all special treats centered around comfort and convenience. As a society, we are used to things not just being done for us but also being customized for our comfort and ease. While COVID19 has accelerated the penetration of food tech companies, we also saw a massive increase in focus on healthy cooking and eating at home. This led to a broader focus on healthy living with first-time home stylists joining the first-time chefs in the quest to make lives easier during the restrictions associated with the pandemic. Ultimately consumers have been looking to solutions that will allow them to make their lives easier at home.
“Spend” not “save” mindset in a flux
With increase in disposable incomes, the younger generation of Indians is looking at transforming the way they live. This is a transformational journey across generations where the “needs” have changed from basic sustenance to education and a better quality of life. For Gen Z, this means both global aspirations and a desire to do more in India be it in terms of travelling or launching start-ups or doing all those things which improve quality of life. The new Gen Z is also placing a premium on quality and relevance of the product rather than quantity. Importantly, the consumption patterns of this generation are very different; not only is this generation open to credit (beyond home loans) they also aren’t just driven by a savings mindset. While an average Indian in the past would look at savings of 25-30% of earnings, the current generation would be happy with a figure of 10%. Interestingly, the spending patterns of this generation aren’t only about splurging; they seek the right value and relevance and a do a lot more research before making their choices. With the onset of Pandemic – this is one area, which has seen a change & that can be attributed to the lowering of income and uncertainty about the future income. This generation was spending about 15% on non-essentials has taken a cautious approach towards money and spending according to a study by Tata Capital found.
Changing concept of brand loyalty
One of the things which matters most for brands and companies is brand loyalty. However, with the young generation of consumers, brand experimentation is a growing trend underscoring their independence compared to the earlier generations. For a brand to court the young generation, it must demonstrate authenticity, purpose, value, meaning and that they support the communities and the environment that they operate in.
It is better to disrupt yourself, rather than wait to be disrupted. Democratization of technology and healthcare is a must, and it will happen. This generation deserves to live better, breathe better, eat better and have a healthier and happier future ahead of them. The onus is on brands and companies to think hard and deep about the meaning, the purpose and the impact they can have. I personally think that the best way to predict the future is to invent it and that is what will be the driving force for a brand and the consumers it attracts.
In the coming period, brands and companies will have to think about the impact they have on the consumers but equally on societies and environment. Topics such as climate change and environment social governance will take even more prominence.
The power of WHY
We are living in a period of great uncertainty and industries across different sectors have had challenging time in the last 18 months or so. With Oil prices impacting commodity prices, a global e component shortage hitting the entire industry (Automobile sector had the worst Diwali in the last decade), and a global supply chain breakdown – things on the backend look quite challenging for brands and it will take a good chunk of next year to get things back in shape. So how do Brands engage consumers and shape demand in these times. As I have learnt over a course of last 2 decades – it is always important to keep things simple, Brands and Marketeers need to stay even closer to their consumers than even before. Understand the shift in consumption and buying behavior, keep an eye on the shopping journey, look closely at the topics they are searching for.
The most important question that Brands, Marketeers and even CEO’s need to ask themselves is “Why”. This Why is not just about the external environment or consumer behavior – but also about the purpose of the brand, the products, and services they are about to introduce. This needs to be followed by “How” and then in the end comes “What”.
Whether one is in a FMCG, FMCD, services, Consumer Durables, Auto or any industry, this is time to look deep within and get the answers to Why – the purpose of the brand, the impact you want to have and the difference you bring in the lives of the consumers. Staying closer to the consumers will help you to understand this why.
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