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Change in Consumer Buying Behavior in a COVID 19 Inflicted World

Change in Consumer Buying Behavior in a COVID-19 Inflicted World

Published on : Jul-2023 Report Code : 7 Report Format : PDF


With the ease in living restrictions by several governments, the consumers have started to take cautious steps outside their homes, the world now is different from the one they left at the start of the year. As new cases dawn every day with increasing numbers and with the threat of the second wave with evolved coronavirus, the return of the consumers to the market seems less tangible as the virus is being managed but not eradicated. As governments are trying to kick-start the economies and markets by lifting quarantines and restraints, consumers are apprehensive and executing additional precautions to purchase any goods other than necessities.

The businesses face confrontation with an unparalleled recessionary situation, consumers are in a changing retail environment and the money to be disposed on consumption is vastly different from the pre-lockdown as people are being laid off, unemployment rates are rising at a rapid pace, the business and market growth forecasts are plummeting. Two types of consumers have emerged in this crisis - there are those rather unaffected from health or loss of income who have similar or even more disposable income due to their inability to spend on eating, entertaining, traveling, etc. outside the home. And, on the other hand, there is a second group of consumers who, due to unemployment, furloughing or other COVID-19 related challenges, have had their income and expenditures substantially curtailed or constricted.


Major areas where consumption dynamics have altered in this unprecedented environment—and have different effects on these two consumer groups:

Adjustments in consumption based on the crisis

Consumers are anticipated to reallocate their disposable incomes according to the circumstances. Consumers are taking precautionary cutback measures, but as the incomes continue to be strained and compressed these measures become mandatory.

The consumers that are protected from income loss, mainly the middle-class government employees and the higher income groups having negligible employment impact, have more freedom to purchase according to their wants and trade the out of home events amidst these restrictions with higher expenditure on “in-home” digital involvements. But as the Crisis keeps on expanding this group also be wary with their expenditure, focusing on saving and cutting back on luxurious spending.

Consumers having lower incomes are seeking ways given the financial restraints to make savings with the extending uncertainty as the Coronavirus situation prolongs, making their efforts more desperate and even the expenditure on necessities also measured and cheaper alternatives sought.

Reformed fast-moving consumer goods basket

Even with the ease of living restrictions in many economies, there is the advent of the homebody economy which is driven by the consumers’ preference to stay, eat and enjoy at home. The FMCG industry is anticipated to increasingly benefit from the move to in-home expenditures but even some categories are more prominently needed and some others like non-food are facing a slowdown.

Discretionary grocery products including treats, luxuries and premium things have seen splurge-protected consumers with ease in the restrictions. They want to complement home cooking with prepared meals/kits, adding home deliveries and take away. In the short term, restricted spenders may allow small delicacies such as beverages or confectionery, but as timelines extend, they will look for cheaper alternatives, mainly on staple categories. The longer the horizons continue, the more reliant they become on these cheaper alternatives.

In today’s scenario customers across the globe, will also seek support from manufacturers and retailers via capped prices to afford the everyday necessities and government support for basic living/food support in the worst possible scenarios.

The retail environment also became increasingly uncertain with smaller retailers, direct-to-consumer models and specialty stores filling the void and offering alternatives to traditional retail channels, as supply chains failed and stock procurement and delivery problems persisted during early lockdowns. In the future, this division will test the conventional loyalties of customers to the store as more restraints lift and stock levels normalize.

Retailers need to understand the specific customer desires and preferences of the two segments. This will ensure that in these challenging times they can offer altered pricing offers to keep consumers moving forward and ensure profitability. Thus, retailers are upgrading their product range to meet the newly emerging needs of consumers and taking advantage of e-commerce and social media as well as promotional tactics to encourage consumers to return to their normal shopping patterns. However, some long-term buying habits may change permanently. Some retailers have been adversely affected, but those who have been able to transition quickly come out ahead and change the retail landscape.

There is a rise in a new retail environment, consumers are now not reluctant or hesitant to embrace online shopping and new consumers are experiencing its benefits. Thus, retailers must adapt to the shift in consumer preferences and undertake certain measures to incorporate online retailing.

Source: UNCTAD

Values prioritized 

Health, safety and quality assurances have become important accelerators in brand/product decision making in this new world and are anticipated to remain major drivers of choice in the future. Consumers may re-evaluate the brand characteristics that they respect most, with some qualities growing insignificance, or prioritizing them over others.

The feeling around staying safe and hygienic, for instance, has increased the importance of some products. Consumers now believe that claims about homecare goods that concentrate on killing germs, providing immunity and encouraging overall health are more important than claims about beauty, sustainability, quality and brand. Whereas consumers prioritize goods with health-defense benefits for food and beverage products, especially those offering immunity benefits, as well as quality and organic ingredients.

Increasing origin preferences 

During COVID-19, local origin has become an effective instrument in the decision - making of brands/products and is expected to remain a significant driver of choice in the future. Much of this was due to the interruption of global supply chains, and the need for local transparency and confidence in ingredients and sourcing.

Even before living restrictions being implemented, local brands were becoming extremely preferred. With lockdowns being enforced, consumers have increasingly come to rely on and trust local segments and sub-local products, and in many instances, local products have been the only source of products on the market. As the horizons of living restrictions narrow, local origin continues to become increasingly crucial for the business who want a supply guarantee but also for consumers who want to buy brands that promote their communities and improve their economies. The longer COVID-19 conditions proceed, this will become even more apparent.

Local markets may provide one way of preserving and restoring economies. Governments should aim to promote local development, allowing ongoing access to cheap local goods, encouraging local suppliers to grow and broaden their portfolios of goods and infrastructure. Regional brands may enjoy discounts or price security that they have not seen after years of free/open economic cooperation conditions, based on what taxes or regulations governments impose. This has tremendous effects in terms of a range of products in stores and manufacturing facilities for retailers and suppliers to ensure that multinationals and local players can play to local strengths.

Brand relationships changed 

Several companies have struggled during the lockdowns to assess their optimum marketing and advertisement level. Early 2020 campaigns were increasingly obsolete and irrelevant to the current period, and businesses were dealing with marketing tone, contact frequency and level of interaction, in addition to slashed budgets due to falling revenues.

It has come out as a lack of concern, empathy and compassion for what many customers have endured. The longer brands persist unclearly, the more consumers turned to those considered as effective and supportive. Authenticity, confidence and empathy were the winning characteristics of those brands that remained "on-screen" and were responsive to the changing needs of customers.

When brands continue to rebuild their marketing strategy and advertising, they need to look at where their listening, watching, communicating, and socializing consumers and viewers have transferred, as well as how they will need to fix broken relationships or create new ones. A significant new focus area for advertisers has become digital and virtual engagement. As horizons expand, customers are actively appreciating connections with brands they trust and who show they care about them and their communities.

Accelerated adoption of digital and low contact services

Consumers have increased the usage of digital tools more quickly since COVID-19 arrived. The customers are becoming increasingly sophisticated online shoppers, as online shopping revenues were 91% higher than they were a year ago for the week ended March 14, 2020. The change is notable for home care goods since consumers in supermarkets and hypermarkets usually buy them in-store.

Online shopping has expanded rapidly among new demographic groups, customers have significantly increased the use of contactless payments and in-store navigation devices, and brands are constantly engaging with customers via engaging virtual shopping experience. While corporations concentrate on managing their businesses over unknown time horizons, the technology will continue to play a critical role in the growing customer dynamics outlined. Accelerating the adoption of technology would be a strong enabler that will turn customer behavior into an online or digital platform. For example, in the United States, e-commerce retail sales reported a substantial rise in 2020 in comparison to the previous year (2019).

Source: The United States Census Bureau

Looking at the current consumer wants and preferences and the prospects arising from these circumstances, Consumers turn to e-commerce to discover new grocery shopping choices with a simple shopping experience, affordable pricing and convenient delivery and/or pick-up choices.


Fatpos Global predicts that over the coming weeks, online FMCG would experience double-digit growth if brands and retailers cope up with the shift in demand. Presently, retailers must have an effective online strategy and measure this channel's continued growth to understand how it fits into shoppers buying patterns and overall expenditure during the COVID-19 outbreak. It's an opportunity for retail stores to utilize the infrastructure they already have as they try to offer the best service during these uncertain times and support all generations of customers.

Some players in the FMCG industry have found innovative ways of using technology to hurdle people past. The best thing FMCG companies did, was to collaborate with food delivery apps. It serves the function of managing supply chain problems at the same time as delivery apps pick up goods directly from distribution centers and shops and deliver them to customers.


Overall spending intentions are reduced across two-thirds of the surveyed countries, and most groups across countries still display a net intention to cut spending – while more ambitious countries continue to predict higher spending intentions. Expenditure on food products and entertainment at home continues to show strong momentum. Consumers in more countries today also plan to increase spending on other general categories, such as home appliances and personal care. Chinese and South Korean customers are planning to spend more on buying other categories: food take-out and delivery, snacks, skincare, baby non-food items, health and wellness, and power.

While overall spending objective stays pessimistic on most discretionary categories, today's skepticism about future spending on categories such as eateries, restaurant delivery, apparel, footwear, and electronic products is decreased. In China, spending aim is close to neutral in most parameters relating to non-travel.

Consumers are switching to online and digital platforms as well as reduced channels of contact to get products and services. For many countries, including the US, India, South Korea and Japan, the aim to shop more online across categories is strong. Across Europe and Latin America, there is a lower desire to purchase online.