(Authored by... Kannan Ramachandran)
When was the last time, you visited a store to buy a beard trimmer or a book? If you have done that in the last six months, you are precious. Yes, and if you haven’t done that in the last few years and have bought them online, don’t be proud that you are updated. Consumers have moved far beyond us. These days, people order their batter online. Covid has brought the future to the present in many aspects and consumer behaviour is one among them.
Shopping habits of people have completely changed after COVID-19. In response, retailers and consumer-goods manufacturers are compelled to build new capabilities and transform their business and operational models. In recent years, the relationship between retailers and consumer-goods manufacturers showed signs of struggle, with each battling to compete in the ever-changing business dynamics. Retailers were trying to step up their digital game while simultaneously facing challenges from e-commerce giants, continuous discounts & offers to price-driven consumers. Consumer-goods companies faced enormous challenges and threats from niche and private-label brands than ever before.
Then COVID-19 became a global pandemic, and the entire business eco-system changed. COVID-19 amplifies more than a dozen of disruptive trends. The move to online shopping trend is accelerated in recent months. Due to government regulations and to avoid the spread of coronavirus, consumers used mobile applications and websites to try a different mix of products than they had previously purchased in stores.
Alternatively, those who visited stores found the buying experience transformed by new rules of social & physical distancing, mask use, and hygiene. Furthermore, many leading researches, information media players reaffirm that consumers’ preferences will realign sharply – away from luxury brands and travels towards health and hygiene and personal care.
The value proposition offered by consumer-goods companies to retailers has transformed by the global pandemic. Consumer-sentiments are likely to be continued after the crisis, and it’s imperative that consumer-goods players need to make changes across the entire eco-system and value chain process including how they manage talents and how to set and fund priorities.
Changing consumer preferences:
Consumers have naturally developed and shifted. Their buying habits are centred around their home by ordering online. Grocery supermarkets and local stores are likely to lose their market share to hypermarkets, online sales, and discounters. For consumer-goods companies, it’s time to shift from crisis mode to a more fundamental realignment of their portfolio and route-to-market strategy to reflect this.
Accelerating omnichannel demands:
The boundary between online retailers and brick-and-mortar stores is becoming thinner, and the need to deliver increase omnichannel excellence by manufacturers is the need of the hour. The pandemic has given rise to the hybrid model that combines digital commerce with products and services delivered by a neighbourhood store. It might take years to realize the full impact of COVID-19.
But by looking into history, to tackle the crisis, most of the resilient companies have embraced the change and acted faster than their competitors. The current crisis has changed the game plan entirely, and the consumer-goods companies can look into their business model and work with their retail partners to withstand and emerge stronger from the crisis.
Consumer of one product is the seller of another. The age old quote of Mahatma Gandhi still stands right. ‘A customer is the most important visitor on our premises’ – But the premises always change. It could be your store or your portal or even a customer’s home. In business, it is the flexible one who wins.