COVID Face-Off: Consumers vs Brands
For now, the novel coronavirus is here to stay. It has proven that life, and our attitude to it will never ever be the same. And this transition is having a detrimental effect on some. I expect several shifts in the consumers' actions in the immediate to medium term that requires FMCG businesses to shift their customer acquisition and retention strategies. Owing to COVID, the structure of the market basket has shifted and certain adjustments are lasting.
An increased focus on health and hygiene has become the norm. Demand in discretionary categories is likely to come back slowly but not immediately. Overall, I see a rise in demand for goods to boost personal hygiene in, and about, homes and workplaces for the typical customer. There is an increasing market for items such as soap, hand washes, bathroom sanitary appliances, disinfectants, towels, gloves, home-cleaning goods such as floor-cleaners and cookware cleaners. Cleanliness and hygiene are the latest mantras.
There are also two common shifts in the purchasing habits of consumers. Consumers have cut their visits to stores as much as possible. This means that the total amount paid on each journey will possibly grow when they tend to stop going to the store (urban market).
A big development in the industry is the increase in rural demand in the short-term and value-pack formats. Today robust sales strategies in rural and semiurban markets have been seen by leading FMCG performers due to the expectation that the influence of the COVID-19 crisis will rebound. This is largely because of the relocation to their homes. This change in customer demand would be an imminent obstacle for brands which drives premium price play.
A structural change in market divisions would be required in order to devote capital to the categories where demand would grow, and emphasis will be diverted from the categories that have to take a back seat. Today consumers are opting for value packs and have become more conscious about price, as disposable income has become luxury.
Today, based on current scenario, brands are taking drastic drifts even in case of market leaders. Brands are concentrating on being available on shelf and visible in terms of media and at affordable price, even if it shrinks the profit margin as stickability is the epicentre now than before.
We are surely going to get through that too. Although this epidemic has changed much of our lives, this destructive disease offers up possibilities for fresh prospects - for both the individuals and organisations.
If a consumer has to think before picking up the brand from a shelf, then the churn is hard to run and if brand is picked without second thought, in return loyalty will gifted by consumers
Brand loyalty is a gift. Respect it at hard times, nurture it carefully.
(Vijesh Vijayan is the Brand Head -MK Agrotech Pvt Ltd)