CONSUMER BEHAVIOR IN RETAIL SPACE – A REFERENCE TO COVID PANDEMIC
The COVID-19 outbreak was declared a pandemic by the World Health Organization, causing enormous impact on people’s lives. A health crisis is soon turning into an economic crisis due to the uncertainty about the amount and duration of the decline in GDP. In a latest update, the IMF has expected the global economy to shrink 4.9% for 2020. Even as countries begin to reopen their economies, it is evident that the recovery will be uncertain and prolonged primarily because the current focus is to deal effectively with the health crisis and consumers remain distant from resuming normal activity. Overall, the IMF expects that the cumulative loss for the global economy this year and next year will be over $12 trillion.
The pandemic has affected advanced and developing economies alike. All industries across nations have been impacted by the ongoing COVID-19 crisis, with varying degrees of severity. Some have stronger defense mechanisms, while others struggle to keep pace with a constantly shifting “normal.” As countries come under quarantine orders and consumers around the world shun human contact, retailers are struggling to adapt. The pandemic has revealed the vulnerability of globally integrated supply chains. Specifically, business models that rely on a single supplier or a handful of suppliers concentrated in one country now appears particularly hard hit. The organizations are experiencing significant operational, financial and liquidity challenges.
The pandemic has fundamentally changed the world as we know it. COVID-19’s lasting impact is yet to be determined, but there are four primary areas in which it’s likely to trigger sweeping changes - Global trade, Technology and innovation, Societal impacts, and Behavioral shifts. Consumer demand patterns are changing fast, global supply chains are remain disrupted and under acute pressure; and different regions, markets and governments are responding uniquely to the COVID-19 crisis. Fear and uncertainty are already triggering irrational patterns, including herd behaviors such as stockpiling of the toilet paper. Consumers across the globe are looking at products through a new lens.
Interestingly, COVID -19 has done something which no amount of advertising by brands could do: it has made consumers change their ‘preferences’. ‘Preferences’ are not easy to change; these are stubborn and often remain unaffected to marketing communication of brands. But a pandemic changed the game faster by moving towards a new normal; it is forcing an unprecedented social, economic, and business response. The virus is reshaping the consumer goods industry in real time, rapidly accelerating long-term underlying trends in the span of few months. The outbreak has pushed consumers out of their normal routines and adapt new habits and behaviors that many anticipate will continue in the long term