COVID Impact on Businesses and Consumer Decision Making in India

History has always been written by the winners, not losers. COVID 19 has wreaked havoc on the world but it would be us who’ll come out as winners in the end. We will win this war but at a very heavy cost. Our economy would have to suffer a lot because of it. COVID 19 has impacted our economy in such a way that we’ll be experiencing its repercussions for years. It has changed the way we think and operate. It has transformed the market completely. Products which we never thought about are the first things on our minds.

In less than a year, facemasks and sanitizers have become priority purchases in our lives. Indian businesses are badly suffering from poor consumer demand. Consumers are rethinking their buying pattern. The focus has shifted to safer shopping and the essentials list also has been updated. Let’s see how COVID 19 has impacted Indian businesses and consumer behaviour.

The following data has been taken from an in-depth Business Perception Survey by The Institute for Competitiveness with the help of Times Network:

Every sector has taken a hit because of COVID 19 as seen in the graph. Let’s see how severe it is and how the consumer spending has changed because of it.

Restaurants:

Consumers are paying high attention to hygiene nowadays. They are aware of the causes of infection spread. Frozen and instant food industry has seen a huge surge. Consumers prefer to order the food and reheat at their home instead of going to a restaurant.

Retail:

The frequency of visiting retail outlets have decreased because of bulk buying. People are ordering the things online and the daily essentials are being bought in bulk to avoid physical visit as much as possible.

Clothing and footwear:

Consumers prefer to order their clothing and footwear from e-commerce as they offer easy delivery and return. Consumers do not want to visit the store and risk getting infected.

Beauty products:

Salons are the places where maximum contamination can happen. Instead of visiting salons, consumers prefer to do their makeup and beauty regime at home. They order things online and watch makeup tutorials to get the desired look they want and keep their skin healthy. Along with this, they are also comfortable if someone comes to their home and gives in-home skincare.

Now, let us understand the change in consumer behavior:

Consumers are no longer rushing to stores for panic buy. The study shows that this intention has decreased from 78% to 66% which shows that consumers are getting conscious in their buying decisions.

Moreover, nearly 64% of people said that they will buy products from brands that responded well to the COVID crisis. To strengthen loyalty among consumers, brands need to step up and face this pandemic with a brave face.

Let’s see what businesses can do to survive this tough time and maintain a good rapport with customers.

• Focus more on safety: Businesses must shift their focus to safety-enhancing products and put them on priority.
• Engage with consumers: Proactive engagement with consumers aids business continuity and loyalty. Stay honest about the service and deal with COVID queries head on.
• Stay positive: Keep up the morale with employees by positive reinforcement and flexible working policies.
• Maintain relationship with vendors: Give your vendors/suppliers an advance notice of delayed payments and save those relationships from turning bad.
• Keep your team in the loop: It is important that your team knows it hasn’t been kept in the dark about the company’s present and future.
• Make the shift: It is time to be dynamic and go from offline to online. It can be on a smaller scale with focused geography and demography. But it has to be done nonetheless.

Making the shift seems more important than others here. But why? Digital content consumption is blowing up. COVID 19 has turned people to social media and OTT for entertainment and recreation in an irreversible way. Bollywood tent pole movies have also been released on OTT in 2020. With this shift in platform, advertising also is going with it. The essential products related to health and hygiene are being advertised seamlessly but companies with non-essential products are also not falling behind. They are putting all of their efforts on brand building. They are letting people know how their brand is helping in the fight against COVID 19.

According to the current state of advertising, it is safe to say that in the coming years consumers will choose a brand that is visible online with having strong social care. Digital marketing will see an upward shift which will not be down any time soon.

With digital advertising being in prime focus, ZMOT comes into the picture. The zero moment of truth (ZMOT) is a step in the buying cycle when a consumer discovers the product by research. It is usually prior to the seller’s knowledge. According to a survey by Think with Google, 53% of shoppers have said that before buying anything they prefer to do complete research so they can make an informed decision.

According to a report published by Mckinsey & Co, there has been 10% growth in online shopping during the pandemic globally.

A report by Deloitte on COVID 19 on consumer behaviour in India says 51% people feel online buying is a safer option for them. The report suggests:

• 44% of people are likely to order groceries online.
• 27% of people are likely to go for virtual doctor appointments.
• 36% of people are likely to follow online exercise programs.

SoulTree and Kaya have said that they have seen around 30% uptick in their online sales. Myntra has seen over 7 lakh first-time customers during their End of Reason Sale. Myntra has said that of those 7 lakh people, 56% were from Tier-2 cities, including Guwahati, Bhubaneswar, Dehradun, Imphal, Aizawl and Panchkula.

It is quite clear by the data that COVID-19 has changed the way a consumer thinks and shops forever. The priorities have changed. Consumers don’t stroll around in the market to buy anything because of a fear of getting infected. They will shop but in a safer way. They spend more time researching the product before buying it. They want their products delivered to them preferably. Learning all of this, brands need to change their ways too. They cannot depend on the older ways of selling and marketing. They need to cater to the demand of consumers the way they want. Because being dynamic according to the situation is the only way a business survives and thrives.