The new consumer behavior
As countries across the world went into lockdown to prevent the pandemic from killing people, the economic consequences of Covid became as deadly as the health consequences.
Across the world, factory lines, schools, universities, manufacturing hubs, retail chains, hotels, resorts, cafes, small shops, and many others began falling silent. Millions lost their jobs, millions lost their livelihood, and with the global recession imminent, millions more will likely be at risk.
The world economy almost came to a screeching halt, and it shows. Globally, unemployment figures are up, GDPs have shrunk, and despite government initiatives to provide stimulus, the economic road ahead looks fraught with speed bumps and pits.
As nations try to get their economy out of the doldrums, companies are gearing up to deal with a new normal. Consumer behavior displayed a major seismic shift during the lockdown.
As different recent reports about consumer behavior, they deep-dive into the new normal of consumer behavior, especially in the light of many activities that were earlier conducted in person but have now moved online.
As more and more of our activities move online, there are tremendous implications for real-world businesses.
For instance, what happens to the salon near your house, or the sandwich shop that served the office-going crowd (which has now moved to a work from home mode).
What happens to the resorts that depended on conferences, or small boutique hotels that depended on tourism? How do universities get geared for more virtual education, and how do conference organizers get geared for more virtual conferences?
With this change in how we behave comes a need for massive reskilling of the existing workforce of many organizations; as well as the need to skill fresh graduates with skills needed for the new normal.
The rate at which consumers are adopting technology is at break-neck levels — To cite a simple example, take the visible increase in digital payments across the board.
A cashless economy, where everyone from the milkman to the electrician, from the house help to the carpenter, is happy to be paid by “cash transfer”. Telemedicine is picking up, and patients are consulting doctors via WhatsApp calls, followed by a ‘cash transfer’, to complete the transaction.
A recent World Economic Forum report on the Future of Jobs looks at the massive investment needed to reskill employees and contractors and skill new graduates to cater to the demands of the post-Covid customer.
As more of us use more technology for everyday transactions, the need for physical offices may come down. For example, would a bank need so many branches if most customers transact online?
While some employees will continue in the new normal, what will happen to the remaining employees, whose roles were annihilated by the pandemic and the pace of technology adoption in the face of the pandemic?
According to the report, 85 million jobs worldwide will be destroyed by the adoption of technology. And the tasks performed by machines and humans would be equal. However, the report predicts, that 97 million new roles — that do not currently exist today — would be created that would need skilled staffers.
Companies need to adapt and be aware of new consumer behaviors.
Right now, consumers, in general, are becoming much more cautious than before when deciding whether or not to buy something. First, they think about whether they need to buy a product or service, then they review the reviews that previous buyers may have left, thirdly many are reviewing or asking directly about refund and cancellation policies.
Many others are also returning products or services that have not met their expectations. Many others are requesting refunds and are with evasive policies where they find it very difficult to have their money back, and it is this experience that will damage the good impression that the client may have had of the company.
Never before have there been so many bad reviews on the internet about the problems consumers have experienced in obtaining a refund or canceling a purchase; as well as the time they have had to wait for it.
And this is just the beginning of this new behavior.