(Updated July 9, 2020)
Around the world, many markets are now planning and testing their exit strategies from living restrictions implemented to “flatten the curve” of the novel coronavirus (COVID-19). With no playbook in hand, each government is carving its own pathway to “a new normal,” complete with restrictions, health-safety protocol and changed consumer behaviors, in hopes of restarting the economy while still keeping the virus under control.
Nielsen is tracking these changes and establishing clear navigation beacons for companies trying to understand the changes and plan for what comes next. We’ll be updating this page regularly with the latest news and insights.
Three Exit Scenarios
Factoring in macroeconomic conditions and the resulting impact on consumers’ lifestyle and consumption, Nielsen has identified three exit scenarios as markets lift restrictions and begin to return to a new normal. These horizons build on the six consumer behavior thresholds we identified early in the pandemic and provide a framework for understanding the changing consumer dynamics, as well as the intensity and permanence of that change over time.
Most countries edging forward are looking toward the Rebound horizon, wherein the market successfully manages the virus and re-opens the economy after less than three months of restricted living.
However, how hard the market was impacted, if there are challenges managing the virus after lockdown, and the primary industries driving growth will mean a longer recovery time. Consumer behavior will recalibrate, drastically widening the gap between consumers and countries who remain shielded from the harshness of the economic impact and those who are not.
INTERESTED IN More MARKET-SPECIFIC INSIGHTS ARound THE IMPACT OF COVID-19 ON CONSUMER BEHAVIOR?
Responding to Consumers’ COVID-19 Concerns
As more markets begin to emerge from lockdowns, there are some early signs that our consumer habits will be forever changed by COVID-19. Three critical accelerators will fast track long-term behavioral shifts. We’ve identified a few ways businesses can prepare for shifting consumer demands as markets move through the six thresholds.
Emphasize Quality and Efficacy
Throughout the thresholds, consumers will be seeking greater assurance that the products they buy are free of risk and of the highest quality when it comes to safety standards and efficacy, particularly with respect to cleaning products, antiseptics and food items. In the short term, this intensified demand from consumers will require manufacturers, retailers and other related industry players to clearly communicate why their products and supply chains should be trusted. In the longer term, and dependent on the eventual scale and impact that COVID-19 has on consumer markets, it may speed up a re-think on how shoppers evaluate purchases and the benefits that they see as the key factors to consider.
Be Transparent About Local Origins
More than ever, shoppers want to understand the supply chain, with complete transparency from farm to factory to distribution, and they want details of the measures being taken to assure their safety. Promoting a product’s local origins could help manufacturers and retailers assuage some consumer concerns. A Nielsen survey on disloyalty last year found that global consumers report being heavily swayed by origin: 11% of global consumers said they only bought products manufactured in their country while an additional 54% “mostly” bought local products.
With millions working from home and digital connectivity taking even more of a hold on everyday habits, consumers will have greater motivations and fewer perceived barriers to more actively seek technology-enabled solutions to assist in everyday tasks like shopping. Companies that can leverage technologies—by meeting changing consumer demands online, enabling seamless interactions through direct-to-consumer offerings and enhancing consumer experience with augmented and virtual realities—have the opportunity to earn consumer loyalty well after consumers’ concerns subside.