Five Consumer Trends Impacting Future Business Growth
Self-care, moving from “I” to “we,” and a reshuffled e-commerce world shake-up experience expectations.
The COVID-19 pandemic will have a long-lasting impact on businesses and their customers. Some industries have been disrupted, while others thrive despite the crisis. Leading through disruptive times requires businesses to consider new consumer perspectives, rethink their value propositions and further accelerate their digital transformations. At Prophet, we have identified two imperatives that will help businesses achieve uncommon growth in the post-COVID-19 world: adapting to the new normal consumers and accelerating digital transformation.
Considering Asia is ahead in getting back to a new normal, in this series, we will delve into the underlying consumer trends, social and technological enablers as well as emerging patterns of digital transformation that all work to point out new opportunities in Asia and also soon to be in the rest of the world.
Adapting to the New Normal Consumers: Five Major Customer Experience Trends
In order to reimagine your business, you must first understand the new consumer habits, perspectives and expectations arising from the pandemic. COVID-19 does not change the fundamentals, but it is accelerating the trends that were underway. As consumers are immobilized at home, they are forced to rethink how we work, learn, live, entertain, stay healthy and buy. Such seismic changes are a wake-up call for companies to rethink their value propositions and accelerate digital transformation.
1. More “We” Less “I”: A Greater Sense of Community and Social Responsibility
After years of rising individualism and personal expression, the pandemic has sparked a greater sense of community and civism. As social interactions are limited, the post-COVID-19 world will be one that is characterized by a shared desire for deeper, more meaningful connections both with others as well as the planet.
Companies will be held accountable for their business decisions more than ever. Fashion, for example, will accelerate its efforts to deliver more sustainable and responsible products through a cleaner value chain. In response to this trend, global companies are taking the initiative to become more eco-conscious. In May 2020, fashion label The R Collective launched its Denim Reimagined collection using surplus denim from Levi’s jeans. Officially endorsed by Levi’s, the upcycling collection was launched at Levi’s flagship store in Hong Kong.
Deeply impacted, the travel industry will also need to reinvent itself to match the new travelers’ expectations. Post-lockdown, travelers will not only expect the highest degree of protection and hygiene, but they will also travel with a renewed sense of purpose and sensitivity towards the health of people and the planet. They will actively search for activities and experiences tied to communities and look for greater transparency on sustainable measures taken while on the road.
2. Home Sweet Home: A Safe Haven Where Everything Happens
While the world can expect a surge in attendance at theatres, bars and gyms once quarantine measures are lifted, many consumers will have already formed routines indoors. With the convenience brought upon by a range of digital platforms such as TikTok (抖音), Hema Fresh (盒马鲜生) and Ele.me (饿了么), the home has become a place where we can work, learn, shop, exercise, socialize and entertain.
For example, many have found peace of mind in the kitchen and picked up home-cooking during the crisis. McCormick, a food company that manufactures spices and condiments, is seeing a double-digit YoY increase for its products in China, even after quarantine restrictions have been eased, indicating cooking at home is here to stay.
This means that traditional service providers will either have to outcompete the home experience or adapt to offer the digital equivalent substitutes for their services. In May, Apple launched an online shopping experience offering the same services available in its retail stores, including the virtual ‘Today at Apple at Home’ classes recorded by Apple’s Creative Pros. Across Asia and in China, many nightclubs have delivered on needs for social connection by launching dance parties on TikTok. Bars and clubs will need to ‘up’ their game and reclaim their spot as favorite destinations out of the home.
3. ‘New’ New Retail: A Reshuffled Game of Online and Offline Retail
The COVID-19 outbreak has forced consumers to become familiar with engaging online, even those who were previously slow to adopt a digital lifestyle. It is no wonder that the pandemic has upended the retail industry and compelled retailers, both large and small, to provide online shopping experiences that offer escapism and instant gratification.
“Online shopping has become social, personal and entertaining.”
Online shopping has become social, personal and entertaining. Appetite for live-streaming content on platforms such as RED (小红书) and BiliBili (哔哩哔哩) is growing, which puts more pressure on offline retailers to deliver a truly distinctive customer experience that online shopping journey cannot fulfill.
The food delivery industry has also found new and improved ways to provide its services to the mass. Across Asia, services such as KFC, McDonald’s and Meituan (美团) offer a completely contactless order journey and assure high safety and hygiene standards at the same time. Traditional retailers will have to rethink their experiences and the customer journey to deliver on the same guarantees.
4. Health is the New Wealth: A Renewed Focus on Self-care
With COVID-19 exposing the vulnerabilities of our food systems and prompting increased vigilance over personal hygiene practices, staying healthy will become a top priority for consumers. This not only means that products need to guarantee safety, but healthcare will also need to be accessible through digital means. The customer experience in healthcare will need to be on-demand, accessible at a distance and highly personalized.
Online medical consultations were already becoming ubiquitous in China, but the use of digital platforms is a defining characteristic of COVID-19. The Ping A Good Doctor (平安好医生) app saw a 10-fold increase over the coronavirus outbreak to reach 1.11 billion accumulative visits in January.
The insurance industry will also be transformed with rapid demand for better health coverage and life protection. While international players like AXA, AIA or MetLife will compete with enhanced services to capture the more affluent rising middle class, mutual-aid insurance platforms, such as Xiang Hu Bao (相护宝), are capturing the lower end of the market with a peer-to-peer business model (300M members as of April 2020).
5. Value Redefined: A Shrewder Consumer and Smarter Purchasing Decisions
With millions being affected financially as a result of unpaid leaves and extended furloughs, many will shift preference toward low-priced value propositions and will want to be financially savvy. Consumers who have the spending power will also reassess their definition of ‘premium,’ seeking more pragmatic, tangible superiority in the brands they choose and putting greater value on responsible buying.
Shopping festivals such as Valentines Day, Double 11, 618 will continue their hot streak as over 15 e-Commerce holidays are scheduled in 2020. But the journey doesn’t end after such “deal hunters”. Gen-Z and millennial shoppers are learning to offload used possessions and embracing a more sustainable attitude. Chinese social media saw the rise of #ditchyourstuff (断舍离), and the second-hand or flea market app, Idle Fish (闲鱼), has witnessed accelerated growth in recent years.
The post-COVID-19 era provides an unprecedented opportunity for businesses to lead and transform, achieving uncommon growth in the face of disruption. While many businesses recognize their consumers are no longer the same, they are eager to learn where to start in order to seize the transformation opportunity.
By pulling different levers from consumer insights to brand marketing, experience design and digital transformation, businesses can formulate a strategic roadmap to respond, adapt and transform. Act now and win the day.
Stay tuned for the next part of the series, in which we will delve deeper into the major enablers that will fuel and accelerate digital transformation in this new normal.