4 measures FMCG, Retailers rely on during the COVID-19 era
Around the world, common consumer characteristics have emerged in response to the pandemic. We have been tracking and analyzing these patterns to help brands respond to customer concerns in the present and predict consumer behavior during the next few months.
As we collect and review the data, we see a story emerging about your customer’s journey through this unprecedented situation. What they are experiencing, both individually and as part of their community, has a direct impact on their spending habits. By watching consumer responses in areas of the world that are further ahead in economic reopening and keeping our finger on the pulse of the African consumer experience, we have identified four key data points that indicate economic improvement compared to earlier this year.
1. The consumer confidence index
Globally, important financial indicators are starting to show signs of improvement. One of these is the consumer confidence index. The consumer confidence index, or CCI, provides insight into anticipated future trends with respect to household spending and consumption. This indicator takes many factors into account including a population’s financial situation, sentiments about the economy, employment rates, and ability to save money.
This is relevant, especially for brands wondering what the future holds, because improvements in the CCI are traditionally a key indicator that an economy is embarking on an upward trend. Countries across the world began to loosen restrictions, open businesses, and boost the economy in May. As a result, the CCI began to improve. For example, in the United States, June saw a second monthly gain in consumer confidence that surpassed expert predictions for this period.
Earlier this year, the Consumer Sentiment Index (CSI) in Africa fell to an all-time low. Similar to what other global markets experienced as coronavirus became accepted as part of our new normal, the CSI in Africa began to improve in April and continued to trend upward in May. In April, 60% of the consumers we reached out to reported they expected their household income to stay the same or improve over the next 6 months. By May, this had increased to 65% of respondents.
Brands should watch other markets and note how improvements in consumer sentiments and increased economic activity affect spending habits. With this information, brands can more successfully adjust their products, services, and marketing messages as similar trends develop across Africa.
2. The fear index
As we learn more about coronavirus and how to live with it, consumers have accepted that the virus will be part of our lives for the foreseeable future. With that acceptance comes some increased concern. Compared with April, the percentage of Africans reporting they are very concerned about the virus increased from 36.66% to 46.65%. Interesting to note is that even though the fear index increased, so did consumer confidence.
This key data gives us crucial information about African consumer’s thought patterns and insight into their future behavior. People want to resume some semblance of normalcy by doing things like safely returning to work, socializing, and engaging in various forms of recreation. Although they are ready to return to these types of activities, people remain concerned about safety and what daily life will look like moving forward. Compared to March, more consumers recently reported a preference for shopping at less busy times and decreasing the number of shopping trips they take.
Consumers have a new awareness of cleanliness standards and practices. They want brands to communicate what is being done to keep shoppers and staff safe. Understanding this customer evolution gives brands a key takeaway to incorporate into their business and marketing moving forward and that is being transparent about how they are helping people stay safe during the delivery of products and services.
3. Changes in shopping habits
It did not take long for consumers around the world to adapt to a new way of shopping for essentials, and Africa is no exception. In May, more African consumers reported shopping online for groceries and buying in bulk when compared with April.
This new way of shopping is expected to continue due to ongoing safety concerns about coronavirus and the fact that people see the benefit and convenience of these shopping models. Businesses have quickly adapted to this consumer shift by offering curbside pickup, contactless delivery, online shopping, and delivery. In-store shopping experiences have also changed in response to the pandemic with an emerging focus on shopping by appointment, physical distancing in stores, wearing masks, enhanced cleaning procedures, and cashless payment options.
If brands are not offering options that are aligned with how consumers want to shop during this time, they will lose out to businesses that are being more responsive to the current trends.
4. Shifting purchase priorities
To better serve consumers, brands need to understand their priorities. Our analysis of current shopping habits provides valuable insight. During the early stages of the pandemic, we saw consistent shopping habits in consumers across the world. Panic buying of non-perishable food items, cleaning products, and paper goods like toilet paper was the first big change in consumer habits as the virus began spreading. This was quickly followed by a marked decrease in spending on non-essential and luxury items. The two main factors that contributed to decreased spending were economic uncertainty and a lack of need due to lockdown measures and the suspension of activities like work, school, and recreation.
As workplaces re-open and restrictions begin to relax, there has been a shift away from these shopping trends. Our data shows items that were previously difficult to find are becoming more readily available in stores across Africa. This indicates consumers are moving away from panic buying and returning to more normal buying patterns. A second data set collected confirms that, although people are bulk buying to decrease shopping trips, they have decreased stocking up on food staples and cleaning products.
Positive new patterns are emerging that show spending on non-essential items is expected to increase. Approximately 70% of African consumers reported that, compared with the last 6 months, they anticipate spending the same or more money on large items like furniture or electrical appliances between now and the end of the year. This insight is important for brands that offer non-essential products and services. Relying solely on trends from previous years for planning in 2020 is not an option.
As economies open up around Africa, more people will be returning to work and spending money. Shopping habits will not follow the previous year’s patterns and brands need to have data-driven insight to know where consumers are planning on directing their spending. This insight allows businesses to responsively adjust service and product offerings to ensure they align with the consumer’s wants and needs.
By polling thousands of Africans in 10 different countries, we have collected and organized this data for you. This takes the guesswork out of business planning during these unusual times.
We are happy to answer questions about how our data can help you and your business. Feel free to email us at firstname.lastname@example.org. If you are ready to make data-driven strategic marketing and business decisions, you can sign up for immediate access to the data. Visit https://www.kasiinsight.com/book-demo to get started.
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