As countries double-down on Covid-19 through massive vaccination programs, the hope to unmask and restore economic activity and resume travel is no longer a distant reality. Over 3.4 million people globally have succumbed to the virus with upwards of 167 million people contracting the virus; but the trend for new cases is slowly reverting which is also reflecting in improved consumer confidence. There was a pronounced and rapid change in behaviours when the pandemic hit which seem to be returning back to base. It does seem however that long-term changes may be more subtle.
Though consumer confidence varies between regions (it is still lower in Europe, Africa, and Asia due to still growing covid cases), most economics are in recovery mode. The global consumer confidence in personal finances, expected income, and job prospects is certainly improving month after month. Ipsos’ Global Consumer Index tracking 24 countries found significant improvement in consumer confidence (safe for Turkey and India where covid-19 has not shown any sign of reprieve). Overall, confidence is touching pre-pandemic levels. Similarly, the Conference Board’s Global Consumer Confidence Survey (for Q1 of FY21) finds that large-scale vaccination, loosening travel restrictions and economic stimulus provided by governments and central banks are increasing optimism of consumers who are hoping for life to return to normalcy.
Deloitte State of the Consumer Tracker for Apr-21 tracking over 15 countries found that while Indians are still very anxious (40% said they were more anxious compared to the previous week), and rightfully given the havoc the pandemic has wreaked, consumers in other countries are less and less anxious and even where they are health anxious (i.e., worried for their own or their family members’ health), they feel financially more secure than before. Less people fear losing their jobs and even less fear they would not be able to make upcoming payments. Folks also feel more secure taking a flight, staying in a hotel, going to the store, and engaging with people one-on-one.
Based on these surveys, consumption and spending is also fast returning, though consumers are still adopting cautious consumption practices by cutting back on discretionary spending, buying only essential goods, and increasing savings. This trend is more noticeable amongst countries where the virus is still not under control. The future spending intent has certainly grown confirmed by other global surveys.
When the pandemic arrived and all hell broke loose, there was a sudden increase in online activity and shoppers were quickly moving online. While PWC’s Global Consumer Pulse Survey shows that more people are visibly shopping online for clothing, consumer electronics, sports and fitness, health and beauty, and household appliances, the preference to shop in-physical stores is still very much there and has come back from pre-pandemic era. Deloitte has a similar finding: consumers intend on spending more on clothing, household goods, medicines and restaurants; and they prefer to do that physically.
Consumers are however becoming more conscientious. PWC’s trackers suggests when shopping in-store, consumers want to go to stores with certification to meet covid-19 health and safety practices, where contactless payment options exist, and where health and safety measures are being followed. Expectations from physical stores has grown where faster and more convenient in-store service is desired—as digital adoption grows, it is clear that in-store services have to upgrade and improve consumer experience (such as connecting devices to the store in order to reduce queuing, ability to scan items while shopping and making payment via mobile wallets, access product information through QR codes etc.)
Another buzz-word that is making a comeback is sustainability. More people are buying goods with eco-friendly packaging, more are incorporating plants-based foods as part of their diet, more are buying from companies that are conscious and supportive of protecting the environment and more are buying bio-degradable and eco-friendly products.
Similar findings are echoed in Euromonitor’s top 10 global consumer trends survey where consumers are not only becoming more environmentally conscious—buying less plastic, reducing food waste, recycling items, reducing energy use and using sustainable packaging—they are also expecting companies to do better. Consumers are preferring to buy brands that are more socially responsible. Over 69 percent of professionals according to the survey expected consumers to be more concerned about sustainability than they were before covid-19. Brand activism in terms of taking sustainability initiatives is growing as consumers are paying closer attention to how companies have reacted to the pandemic. Euromonitor argues that consumers are likely to reward businesses that are using their profits for good post-pandemic taking purposeful, green and environmentally friendly initiatives.
It is clear that folks don’t want to stay at home forever but they do expect businesses and services to evolve through tech-adoption and big profit-making companies to become more environmentally responsible. One thing is for sure: as the world comes out of the pandemic, the global consumer has more power to sway and that makes for one confident consumer.
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