McKinsey recently surveyed consumers from India, China, and Indonesia to understand the impact the pandemic has on their plans on discretionary spending post-COVID.
Consumers in Asia are pushing back purchases on bigger ticket items such as jewelry, vehicles, home construction, etc. From the survey results, there seems to be an increase in price sensitivity; with consumers becoming more cautious with their spending.
In considering to make a purchase, there is a preference to purchase from “trusted brands”. Market-leading brands have higher conversion rates of 60%-70% as compared to other brands. During the crisis, it appears that consumers prefer to stick with brands that they trust and items that are perceived to be of “good value” for the price paid. Perhaps this could be attributed to an inability to test or experience products due to the lockdown restrictions imposed all around the world.
The survey findings also suggest that consumers are experiencing feelings of guilt when they shop in the current global crisis. For instance, foregoing or trading down purchases of conspicuous goods as it may not be ‘appropriate’ given the current social context – even if these consumers were well able to afford it.
“The findings show that many consumers expect to reduce spending this year.”
- The survey showed that shoppers do appreciate the “touch and feel” experience when shopping in physical stores. While many consumers have turned to digital shopping experience due to the lockdown restrictions, post-COVID, businesses should rethink their store operations to provide an in-store experience which also incorporates the simplicity and flexibility of shopping online.
- Consumers tend to gravitate towards trusted brands, especially in uncertain times like these. Companies should therefore place importance in building and maintaining their consumers’ trust.
- In making a purchase, consumers look for items that meet their criteria for value. This concept of ‘value’ can be highly subjective, and businesses should adopt a more personalized approach in marketing their products.
- Finally, companies should ensure that the consumers’ buying experience is frictionless and delightful – regardless of which channel or touchpoint a consumer is at.