The report identifies three phases that brands must plan for. It also breaks down consumer behaviour into four distinct emergent patterns. The three phases for brands are Now (immediate response), Next (reboot and react) and Beyond (adapt to the new world). The four grids for consumer behaviour are: ‘Hibernate and spend’ (concerned about the pandemic but also best positioned to deal with it), ‘Cut deep’ (pessimistic about the future and are spending less across all categories), ‘Save and stockpile’ (worried about their families, less optimistic about the future and have been stockpiling essentials), ‘Stay calm, carry on (relatively, a very small segment who are expected to resume their old shopping behaviours). These behavioural patterns are expected to morph into five different classes of shoppers, as the pandemic subsides, the report said.
Pinakiranjan Mishra, partner and national leader, Consumer Products and Retail, EY India explains that the key trend from the EY Future Consumer Index survey (based on a survey of 1,046 Indian consumers, mostly in urban areas, covering their current behaviour, sentiment and intent) is that close to 50 per cent of the consumers are optimistic about the future, which translates into shoppers saying they expect to be back with a bang (38 per cent) and be cautiously extravagant (11 per cent). But consumers in the “Cut deep” group (35 per cent) will either “stay frugal” (29 per cent) or “keep cutting” (19 per cent) their expenditure on all categories except groceries. Researchers say that brands must run a qualitative analysis of the trends, more than just crunch numbers. A report by Google, released late last month, noted that while deciphering what people really want has always been a tough undertaking for marketers, they are now faced with the added challenge of understanding the transient nature of today’s consumer.
Mishra believes that consumers are looking for brands that they can trust to be safe, reliable and available and at the same time, do not cost much. The frugality of the customer must be factored into all the three phases (now, next and beyond) of a brand’s response to the pandemic. He advocates scenario modelling to plan different response strategies, a Covid-19 checklist to monitor implementation and sustained analytics to uncover potential risks and timely management of disruptions. From a finance perspective, he added, consumer products companies
must make provisions to extend financial support to its channel partners.
For example the credit lines extended by ITC, HUL and Cargill to kirana stores. “From an operations perspective, the immediate focus is to keep the supply chain operational, including adjusting production as per demand fluctuations and channel partnerships for last-mile delivery. For example, HUL shifted to larger order sizes and direct shipping from factories and Marico launched ‘Saffola Store’ on food delivery platforms Swiggy and Zomato,” Mishra said.