SINGAPORE, 8 April 2020 – COVID-19 has spread all over the world and millions of people are forced to change their lifestyle habits until things get better.
A Nielsen investigation has identified six key consumer behavior threshold levels that tie directly to concerns around the outbreak. The thresholds offer early signals of spending patterns, particularly for emergency pantry items and health supplies, and these patterns are being mirrored across multiple markets.
Singapore is at “Quarantined Living Preparation” as of 31 March. Consumer shifts at this level include increased online shopping, a decline in store visits, rising out-of-stocks, and strains on the supply chain.
Shift from offline to online purchases
Challenges arising from this outbreak are likely to accelerate the use of existing and new technologies and tools. Nielsen’s Impact of COVID-19 on Consumer Behaviour (March 2020) survey found that a new digital norm has emerged.
Two in five consumers in Singapore (37%) have increased their online shopping activities, and 3 in 4 (76%) indicated that they will not return to the same levels of online shopping before the outbreak.
“The convenience and accessibility to products online, especially during COVID-19, have not only increased existing online shoppers’ spend but also converted many offline shoppers to online. This trend is unlikely to return to pre-COVID status,” observes Garick Kea, Executive Director of Consumer Insights at Nielsen.
COVID-19 drove higher penetration of online shopping for FMCG products (personal care, home care, beverages, packaged food) as 7 in 10 consumers are shopping online to stock their pantry, and this behaviour is likely to continue even when the pandemic ends.
The penetration of users venturing into e-commerce will continue to rise. Nielsen’s COVID-19 dipstick in March 2020 found that 69% of people surveyed who bought household goods online for the first time during COVID-19 will do so again in the next 12 months.
Among non-FMCG products, the electronic durables category had the highest increase (+6%) in online purchases after the outbreak. On the other hand, 8 in 10 consumers purchased school and office supplies offline.
Understandably, there has been a significant reduction in non-FMCG purchases online compared to FMCG products, as consumers prioritise more essential products.
More consumers bought packaged and mineral water (27%) and functional drinks (24%) in an effort to keep healthy. Across the different food products, consumers purchased frozen (24%) and instant foods (26%) most often. Conversely, people bought raw food (12%) the least often during COVID-19 as consumers prefer foods that can be kept for a longer time, instead of perishables.
People still go to physical stores to pantry-stock, so FMCG retailers and hypermarkets should focus on omnichannel strategies to minimise out-of-stock both online and offline.
In more positive news…
One in two consumers are cooking or eating more often at home now, allowing for more family time and interaction with loved ones living under the same roof.
While many businesses face disruption and uncertainty during this time, the health and wellness category will gain momentum when people place more importance on their health and wellbeing.
More than 2 in 5 consumers bought hand care products and face masks more often, 1 in 3 bought health products and supplements more often, and 1 in 4 purchased OTC remedies more often as a result of the outbreak.
With increased concerns over oneself and family, more consumers purchased additional insurance. Half of these are policies with COVID-19 coverage to help safeguard their future.
And while non-essential workers are staying home, online entertainment activities have become more popular. Two in five consumers (44%) are playing more online games, followed by social network activities (38%) and online video streaming (36%), which are keeping people engaged during this period.
“Traffic in shopping malls, outdoor and entertainment activities are likely to progressively resume to normal levels post-COVID-19, but this means that indoor activities such as online gaming and video streaming might be reduced when restrictions are relaxed,” says Mr Kea.
ABOUT THE STUDY
The Nielsen “COVID-19: Where consumers are heading?” March 2020 survey was conducted between March 6 and 17 in each of the 11 markets in Asia—Chinese mainland, Hong Kong, Taiwan, Japan, South Korea, Thailand, Philippines, Vietnam, Malaysia, Singapore and Indonesia. Given the dynamic changes that have occurred over the last weeks, it is important to note that the impact of COVID-19 events will impact consumer sentiments differently by market. This study presents consumer insights from a global survey spread across 74 markets and reflects consumer behaviour and sentiments during the coronavirus pandemic. The insights from this syndicated report will assist FMCG brands, retailers and manufacturers to identify purchase trends as consumers shift their preferences while making FMCG purchases amid COVID-19 pandemic in their respective markets.