COVID-19 to alter consumer behaviour & marketing response permanently: WPP report

The report predicts profound changes in consumer behaviour in a post-pandemic world as there will be an increased sensitivity towards health and hygiene.

e4m by Shreshtha Verma & Sanstuti Nath
Updated: Apr 7, 2020 3:28 PM
consumer behavior

India is currently battling a global pandemic with a nationwide lockdown in place. The situation has made the country anxious, and it 'needs reassurance and stability', says WPP's latest report, titled COVID-19: India’s Sentiment & Impact on Brands'.

The report highlights the changes in consumer behaviour across categories while the nation went into lockdown. It also observers that, “some aspects of consumer behaviour and marketing response will have changed permanently and brands that recognise that and prepare for it will emerge stronger from the disruption.” The definition of essential and non-essential has also changed drastically in a short span of time.

e4m analysed the WPP's findings and talked to marketers to understand what the futures holds for key sectors like E-commerce, FMCG and lifestyle.

Change in the definition of ‘essential’ and ‘non-essential’ and future of FMCG sector

According to WPP's findings, the pandemic has made consumers go back to the basics. Where on one hand there is a significant increase in hygienic related products, the packaged food items see a decline across the board.

The report states that personal cleaning products saw an exponential growth of 56% after the COVID-19 became a matter of concern. Products like antiseptic liquids, anti-bacterial liquids and wipes also saw a rise of 51% in consumption, while home hygiene products like phenyl also saw an increased consumption of 47%. Daily-use essentials like shampoo and toothpaste and too witnessed a rise of 5% in consumption.

People are also stocking food items like packaged flour, pulses, rice and oils, and the category saw an increased consumption of 23%. A rise in concern towards immunity and nutrition is also apparent in consumer behaviour as nutritional products like chyawanprash and milk-based food drinks saw a rise of 10% in consumption.

Albinder Dhindsa, Co-Founder & CEO, Grofers, noted, “Personal hygiene products, followed by floor cleaners have seen a surge in demand along with immunity-boosting products such as chyawanprash and honey. Essential items such as atta, dal and rice are also being bought in large quantities by our customers.”

“BigBasket also witnessed an increased demand for essentials such as staples, atta & dal, fruits, and vegetables”,  said the brand’s spokesperson.

Vishwajeet Parashar, Marketing Head, Bajaj Capital Limited, sees hygiene products becoming part of lifestyle for the affluent Indians. He said, "In India, hygiene as a part of regular lifestyle is largely dependent on the economic status of individuals. Like health insurance and healthcare in general, hygiene is still a discretionary expense and not an investment. Therefore post COVID-19 or even as we move on from lockdown, we might see regular “lifestyle hygiene” being adopted by a large proportion of the affluent (as well as aspiring ones, esp. “showing arrived”) Indians. But it will take longer to see a mass change in attitude towards making hygiene a “lifestyle” necessity.

It’s interesting to note that packaged, ready-to-use food items saw a significant decline in consumption. Consumer is concerned about the nutrition value of the products. Long shelf-life products like tetra pack milk saw also a decline of 6% in consumption, while packaged food items like snacks and instant noodles saw a dip of 17% in consumption.

Ready-to-cook items also slipped from the essential list, and items like frozen foods and instant idli-dosa mixes saw a decline of 17% in consumption. The consumption of soft drinks and packaged juices also reduced by 35%. Another category that slipped from the essential list of consumers is cosmetic products like sun-screens and moisturising lotion. The category saw a decline of 23% in consumption.

From the report, it could be observed that there is a change in consumption habits of people, which the experts believe would continue even after the normalcy returns.

Commenting on the change in consumer behaviour, Divanshi Gupta, Director, The Marcom Avenue, said, “Consumer purchases will now be more classified into two categories -- ‘Survival’ and ‘Sanity’. Survival category will majorly include food and beverage, personal care items, home-cleaning items and over-the-counter medicines. Sanity category will include products like alcoholic beverages; entertainment in the form of online content consumption through social media, OTT platforms, online games and live streaming; beauty products and electronic devices.”

She added, “People would like to be prepared in case they have to work from home again and keep themselves entertained.”

Shrenik Gandhi, CEO and Co-Founder, White Rivers Media also believes that there is a change in consumer behaviour that could be permanent. He said, “There indeed will be a tectonic shift in the way consumption was happening in pre-pandemic days, which essentially means there will be an equal shift in the way marketers think. Humans inherently love to consume. Brands have to be agile enough to adapt. The ABCs of the advertising industry might change for the better. One has to have one's ears on the ground.”

“This is the time of community building. Marketers have most times had a sales-first approach. Finally, the consumption is on the back burner and the brands can step forward to start creating interest groups who will be a loyalist for a long term. Brands shouldn't be myopic in their approach. This is a situation and it will pass, brand, consumers and the market will remain,” he added.

Affect on e-commerce

E-commerce saw a huge surge just ahead of the lockdown, but with delivery disruption during the lockdown, there is a lull. Most e-commerce lines are shut except for essentials. Delivery timelines are also not being promised by any retailer. Despite that, there is a 100% increase in Google searches for BigBasket and Grofers.

Grofers recently reported a rise of 45% in the number of orders and 18% in order value. Dhindsa, said, “Over the last couple of days, we have seen customers buying items on our platform in large quantities across cities as well as categories.”

According to him, Mumbai, Bangalore, Pune and Ahmedabad have seen a higher surge with nearly 80% growth followed by Delhi NCR and Hyderabad at a 60% spike in business. While daily use items are the common orders, personal hygiene products are the most-sold items.

BigBasket also witnessed 2X growth in orders. According to a spokesperson, baskets have also become larger by 15-20%.

WPP’s report suggests that the sector is expected to rise again once the normalcy returns. It added that most new users would stay on, as there would still be fear in consumer’s minds about going to physical stores. Adoption will also grow from the 45+ age group, as they have the most fear of a fatal infection. The report sites example of Alibaba and JD, which grew significantly through the 2003 SARS Outbreak.

Parashar believes that once the normalcy returns, the growth of e-commerce will be reduced. He said, "Over the next 6-9 months e-commerce focus will shift towards more of essential / non-discretionary and hygiene products. In addition, the momentum would be driven towards 'Protection' products - but not necessarily restricted to hygiene only. By and large, it would be more towards “natural immunity” developing food and other products. Sale of high-quality air filters – whether personal masks or home air purifiers may see continuous growth and peaks. Growth of e-commerce will slacken but will not slump."

E-commerce brands that fall under the non-essential category are also stepping up their game by shifting to alternate roles to adapt and survive. While Nykaa is rebranding beauty products as essentials, Myntra is offering OTT content related to fashion along with fashion advice and games to pass the time.

Lifestyle category takes a hit, expected to rise again

With people stuck at home and a strain on income, lifestyle category took a huge blow in sales. The category sales see a 15-30% drop with an increase in consumer price sensitivity.

Though the category falls under non-essentials, it also witnessed a dip in online searches. Indexed Google searches show that there is a decline of 20% in fashion-related e-commerce searches. Beauty-related searches also decreased by 15% on e-commerce platforms. Clothing and accessories like shoes and watches also saw a decline of 15-25%.

Anita Naiyaar, CEO, Havas Media, believes that once the market is restored, the category will be revived. She said, “While these brands may not be relevant in the current situation, they have their own imagery, loyalty and perception that had been built over a period of time. Given the increase in digital consumption, their presence on various digital platforms will act as a reminder and keep the brands top of mind even in such situations.”

Naiyaar cites the example of many brands changing their logos to depict social distancing. She said, “The way McDonald’s has changed its logo, it is keeping the brand relevant even today in spite of no consumption. Consumers will remember this. It is in times like these that brands have to continue the conversations with the consumers and demonstrate their relevance.”

Chaaya Baradhwaaj, Founder & MD, BC Web Wise also feels that the logo or the tagline is a strong medium for any brand to reinforce a message. She observed that a logo represents all that a brand is about. "It may actually just be right to do this as it establishes a stand they are taking to support the stance taken by authorities to contain the issue," Baradhwaaj said.

"If the communication is done smartly, it does help to have a larger buy into the directive of social distancing. The change in logo is also creating a buzz on social media. Brands like MakeMyTrip have gone aggressive in promoting their campaign to spread awareness," she added.

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