Business management

Consumer behaviour: what lasting effects could coronavirus have?

With insight and predictions from retail SMEs and sector experts, we look at how the pandemic might alter consumer behaviour in the long term.

On the other, many high street and hospitality businesses are fighting to survive amid forced closures and shifting priorities.

But this situation is unlikely to be permanent. As part of a recent webinar titled Covid-19: Impact for Brands, Kantar’s chief growth officer, Jane Bloomfield, used the advanced situation in China to demonstrate that, for UK businesses, there is a light at the end of the tunnel.

The webinar offered an evidence-backed perspective that the areas of retail hit hardest could well rebound in the not-too-distant future, while also highlighting the likelihood of a “new normal” for the sector. So, when daily life does start to become recognisable once more, what kind of changes should retailers expect?

Increased buyer caution

Firstly, consumers are likely to be more cautious with their money – especially those who’ve been plunged into financial uncertainty by the crisis.

“Consumers will become much more careful when buying anything that will significantly reduce their savings or require credit,” says Steve Ingram, director of retail at tech firm Keytree, “especially those who’ve experienced a very rapid loss of income.”

Smaller purchases will be made with more thought, too. Louisa Rogers, founder of Newcastle-upon-Tyne-based vintage fashion retailer Trendlistr, is certainly expecting attitudes to change in her industry. “Consumers will look for new ways to give themselves that ‘new outfit feeling’ without the expense of buying brand-new items,” she says. “The fashion industry in general will evolve to be more based around the rotation of clothing.

“As well as buying more second-hand clothing – whether pre-loved or vintage – consumers are also likely to hire items and swap between friends more often.”

Quality and sustainability

Caution isn’t just about cutting costs: shoppers might also start showing a greater appreciation for quality and craftsmanship.

Rogers says: “When we’re forced to confront and contemplate our possessions – like many have while isolating or distancing – we realise that the best value comes in the form of items we treasure, use repeatedly and are of a higher quality.

“In my area of retail, people will be more likely to buy garments as investments, and that will result in significant losses for ‘fast fashion’. Similar changes could occur in other parts of the retail sector, too.”

Neil Elliot, co-founder of British-made online retailer Sir Gordon Bennett, observes: “The reports we’ve seen about pollution levels falling will also push sustainability into consumers’ thinking when they’re choosing where and what to buy.

“It will prove that throwaway culture needs to stop, and that buying less but buying better is the best way forward.”

A long-term boost to SMEs

The outbreak has highlighted just how important small businesses are to our economy and communities, so we might expect to see more people shopping locally and independently when normality resumes.

“I think consumers are now realising that the global supply chain is fragile,” says Elliot, “and that, in turn, might make them decide that, eventually, when this crisis is over, they want to buy more British products.

After the last recession we saw a real resurgence of independent businesses, and I think there’ll be further growth in that direction as people become even more conscious of the products they buy

Mark Musgrave
The Level Collective

“Although our sales haven’t grown much recently, probably due to people prioritising essentials, what we have noticed is that sign-ups to our newsletter have increased considerably – so I think people are already taking an interest in local and independent retail, ready for when they can next shop properly.”

Mark Musgrave, who runs ethical outdoor clothing brand The Level Collective, agrees: “After the last recession we saw a real resurgence of independent businesses, and I think there will be further growth in that direction as people become even more conscious of the products they buy.

“I also believe there will be increased interest in British-made products and the small independent businesses that are weathering the storm right now. Consumers will want to invest in actual individuals’ livelihoods rather than large companies.”

Experiences coming before products

Hospitality businesses have been severely impacted by the outbreak, with many being forced to stop all forms of trading, but there’s potential for a huge rebound when the crisis ends.

Kantar’s research, for example, shows that out-of-home dining and gathering is the thing people are most looking forward to when lockdown restrictions are lifted, with out-of-home entertainment also high on the list.

Independent brand strategist Meredith O’Shaughnessy says: “When our doors and those of the high streets reopen, it will be the restaurants, cinemas, theatres, parks and bowling alleys that will thrive.”

“It could be seen as reckless to buy an expensive handbag, but spending money on theatre performances will almost be a noble act.

“In that sense, local spending will go up as well as we seek to support our communities, but this will be less about the spend and more about an experience of connection with others.”

Keytree’s Steve Ingram agrees, and says that absence should make consumers’ hearts grow fonder for the hospitality and leisure sectors.

“Having been isolated during this, I think there will be an explosion in people wanting experiences: things to create memories like watching a favourite sports team or band,” he observes.

A newfound appreciation for customer service

Online retailers have continued delivering products to people’s doors, but one thing they can’t provide is face-to-face customer service.

Charlotte Gatward, owner of family-run jewellery store Gatwards of Hitchin in Hertfordshire, says: “We’re expecting and hoping that people will return to the high street craving the in-store experience and human connection they haven’t been able to get online.”

Gatward has plans to capitalise on the renewed interest, too. “As a retailer of engagement rings and wedding rings, we know that many of our own clients will have faced the disappointment of wedding cancellations or postponements, so we’re planning to look after them in whatever way we can.

“In the meantime, we’re going to launch a ‘nominate your NHS hero’ campaign, where we ask our customers to nominate someone they know on the NHS frontline to win a gift voucher to spend in-store when we reopen.”

This material is published by NatWest Group plc (“NatWest Group”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of NatWest Group, as of this date and are subject to change without notice. Copyright © NatWest Group. All rights reserved.

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