While online grocers and branded supermarkets have faced supply chain and other logistical challenges, such as poor staff availability, neighbourhood shops with family staff have emerged as a reliable and responsible ally for their customers.
While Deloitte attributes this trend of hyper-localisation to rising #Vocalforlocal sentiment following government narratives around self-reliance, qualitative market researcher Third Eye maintains consumers are going local because they feel the strong need to be in control as well as have comfort and familiarity in a time of anxiety.
The last 90 days have produced permanent changes in underlying consumer behaviour that are promoting the hyper-local trend. The pre-Covid middle-class lifestyle of conspicuous consumption and novel experiences has been replaced by uncertainty. Third Eye’s research shows that Indian consumers’ mindsets have already moved from seeking aspirational rewards — such as luxury goods or travel experiences — to wanting reassurance about their health, incomes and family obligations.
With their travel restricted, consumers have sought out local and familiar sources as steady source of assurance. In other words, says Third Eye, if they don’t get what they need in one store, they know the next one is only a stone’s throw away, and this gives them a sense of control and certainty.
Local firms that provide cable and Wi-Fi to plumbing and AC servicing have also stepped up to solve customer woes, while service offered by big brands — from telecom to white goods — have struggled to respond to customer requests. These trends, say Third Eye researchers, forecast an increasing preference for local services, perhaps at the expense of the big brands. Beyond the local shops and services, effective local models of direct-to-home deliveries of fruits, vegetables and fresh staples have taken a further bite out of big brands. Open any delivery aggregation app, and the thing that is striking is the number of local stores springing up — selling an eclectic selection from imported (Swiss not Chinese!) chocolates to fresh onions and potatoes.
Other countries where lockdowns have been eased are seeing more hyper-local trends — in the US, sales enquiries for camping gear and holiday caravans are booming as people look to take a vacation locally; In India, small hoteliers and guest houses are anticipating capturing Indian tourist dollars usually spent in Asia, Europe and West Asia.
These ongoing shifts in consumer preferences are stark and rapid. And missing in action from consumers’ daily lives during this grand pivot are established brands. These large brands with rigid supply chains, process-oriented sales regimes have ended up creating a big disconnect with the end consumer. One reason is that faced with business shrinkage, many have stopped communicating with consumers through media platforms. Most big corporations have opted to speak more about their admirable corporate social responsibility-led efforts in feeding people and providing medical and other assistance to the state and local governments over the past 10-12 weeks than focus on marketing their products in a relevant and authentic manner.
As we come out of the lockdown, this shift in consumer attitudes to go local could hurt big brands. After all, the choice of a consumer’s purchases is no longer dictated by brand preferences but rather by availability of products because of severe supply chain disruptions. This has led to a vacuum, which is being filled by hyper-local suppliers. Forty seven years after EF Schumacher, the German economist set out his bite-sized theory, small is beautiful again.
The writer is a communications strategist. firstname.lastname@example.org; I @bagchips