The Covid crisis has made the average Indian consumer take a second look at their spending patterns.By Chandramohan Mehra
Let me introduce you to India’s smart shoppers. They’ve managed to meet their needs even with retail outlets shuttered down. They’ve whipped up restaurant-style foods from the comfort of their homes. And they’ve continued to learn and work even with schools and offices closed. Clearly, amid the Covid-19 crisis that brought in restrictions on various fronts, this new breed of consumers in India has adapted to play by the rules as we know them now.
I believe the first signs of this welcome change began when the pandemic made contactless payments necessary. Consumers rapidly adopted a smarter digital way of purchase. As per a McKinsey consumer pulse survey from May 2020, online contactless payments had seen a 64% rise during the first few months of the pandemic.
And as far as I see it, this trend may be here to stay, since a majority of consumers intend to continue using digital payments even post-COVID-19 pandemic.
Demystifying today’s smart shoppers: Who are they?
Curious to decode the psyche of today’s new consumers, I dug a little deeper into the demographics of this new class of shoppers. As it turns out, this new line of smart shoppers is a mixed breed. It’s not easy to box them into one category, because India’s smart shoppers are fluid across age, gender, and generations. They range from baby boomers to gen Z, and they’ve grown increasingly aware of how they shop.
From an increased use of online solutions to a noticeable shift towards sustainable retail choices, they’re very different from the average shopper in the pre-Covid-19 era. Looking closely at consumer behavior over these past few months, I’ve come to realize that there are certain specific trends and traits that define these consumers. Let me break them down for you.
A marked shift towards digital and online tools
With purchases moving to the online space and payments having gone digital, it appears that cash is no longer the king. This attitude is being reflected in how consumers pay. And it’s not limited to millennials alone. Even senior citizens echo this sentiment, with many people over 55 years of age drifting towards online purchases as opposed to offline purchases.
Even beyond purchases, I see that Indians are increasingly embracing new digital avenues in other areas of life. Think video conferencing and remote learning. The McKinsey consumer pulse survey revealed that close to 50% of Indians have either begun to use or have increased their reliance on video conferencing for professional reasons in the recent months. And like digital payments, this behavior also appears to be cemented for good, because many of these consumers intend to continue using remote learning and videoconferencing even after the effects of the pandemic wane.
Reduction in discretionary spends
The Covid crisis has also made the average Indian consumer take a second look at their spending patterns. And in a surprisingly prudent move, discretionary expenses were the first to be knocked off the household expenditure portfolio. A KPMG survey from July 2020 revealed that around 78% of consumers in India claimed to reduce their discretionary spending.
The new-age consumer’s spending portfolio consists mainly of fixed expenses and other necessary outlays like groceries and household expenses. Like the other smart shopping habits paved by the pandemic, I’m fairly certain that this trend may also outlast the crisis.
A conscious shift towards better health and wellness
With gymnasiums shut down and parks closed, many people found their access to regular avenues for health and fitness cut off. Others, with a lot of time on their hands, found themselves taking a second look at how they prioritized health and self-care. They have begun to resort to various other forms of physical activities like cycling, fitness cardio, yoga and running. Adding yet another dimension to this conscious shift towards healthy lifestyles, some consumers are even making the smart choice of getting their families to take online workout classes. I think this is a genius move, because it doubles as family time and simultaneously helps them keep their health goals on track.
Another area that has been radically transformed is the food habits of people. Since eating out is not possible or safe now, consumers have cultivated hobbies like cooking. Many people I know have ventured into their kitchens for the very first time during the lockdown, and it turns out they’ve actually enjoyed trying their hands at home cooking. This trend has been driven directly by a need for healthier and safer options to indulge in a variety of dishes without leaving the comfort of home.
Sustainable choices that give back to the society
The pandemic-induced smart behavior has extended beyond personal purchase choices and has grown to include sustainable, long-lasting patterns. This, I’d like to believe, is the most positive development amongst this new breed of smart shoppers. Consumers today are making healthier and environmentally sustainable purchase decisions. Evidently, the prudence of today’s smart shoppers is also backed by empathy and a greater understanding of how interlinked the world is.
Consumers have also been shifting their lens to local sources. An increasing number of people are buying locally sourced products. And with the lockdown not permitting people to venture further into their cities or towns, consumers have discovered a newfound fondness for their neighborhood stores. This trend of going ‘vocal for local’ is fast picking up and, like other behaviors cultivated during the pandemic, will likely last long after the crisis passes.
A final word: What can brands do to keep pace with these smart shoppers?
First and foremost, deep listening of changing consumer behaviors and preferences and swiftly translating them into actionable insights ranging from product, distribution and suitable digital interventions will remain key to sustain relevance. Secondly, purpose-driven brands will emerge as the winners in the expanding ecosystem that encompasses employees, customers, partners and the general public. And finally, leveraging data, tech and content will build resonance, translating into quick market share and mindshare gains.
The author is the chief marketing officer of Bajaj Allianz Life Insurance
Read Also: How direct-to-consumer brands can create a direct line with consumers
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