The COVID-19 pandemic continues to change the world as we know it, especially in the way we behave and interact both as businesses and as humans. How companies respond to such a new consumer dynamic will determine not only which of those businesses survive, but also the speed of the global economic recovery.
While it is easy to use the word “crisis” universally, there are vast differences by sector and geography. Some sectors are likely to recover sooner than others, mirroring changes in consumer behavior. While demand in the hospitality sector, for example, has plummeted, the health care and fitness sectors, on the other hand, have seen pivots and growth in business as consumers begin to re-evaluate their lifestyle choices and future well-being.
To understand how to react as businesses, we must focus on humans — their shifts in values, behavior and consumption. And we must be vigilant and constant in observing those changes in human preferences — to navigate this moment, as well as what comes next and beyond. The EY Future Consumer Index (FCI) is monitoring consumer attitudes in 19 countries around the world every six weeks . It allows for meaningful insights at a point in time and shows trends as consumer perspectives change, along with comparisons of different geographies.
A panel shared the latest data from the July survey on a global webcast, “How will brands adapt to a more cautious customer when lockdown lifts?” with almost 2,000 registrants. I moderated a discussion with several of my colleagues and fellow leaders to discuss the implications: Erik Larson, EY Americas Customer Experience Technology Leader; Glenn Engler, EY-Parthenon Global Digital Leader, EY Americas Strategy and Transactions Digital Strategy Leader; and Andrew Cosgrove, EY Global Consumer Knowledge Leader & Lead Analyst, who is a co-author of the study.
Consumers in China are “cautiously extravagant”
The latest data from the July 2020 release of the FCI suggests that in China, for example, where the pandemic originated, the country is emerging from the crisis gloom to a new, brighter future, with certain groups of consumers being categorized as “cautiously extravagant” in their buying habits.
Despite that optimism, almost half (47%) of Chinese consumers are uncomfortable about resuming everyday recreational activities, such as going to the cinema, a restaurant or a bar.
Over half those surveyed (52%) are consolidating their shopping trips, buying more in fewer visits, and two-thirds (66%) say they are more aware of hygiene and sanitization. This reflects an even greater worldwide figure (72%) who now describe themselves as “risk averse.” Businesses in China have had to adapt to prioritize safety and address a genuine fear of infection, transforming and adapting the customer experience.
Andrew Cosgrove believes there are lessons to be learned: “The anxiety that new consumer behaviors are fueling is going to be with us for a long time and that’s forcing companies to accelerate the transformation of their businesses at far greater rates than they were thinking of six months ago. Companies can’t just respond to the crisis as it is today; they need to transform their business for the long run.”
A quarter of all business are still stuck in the here and now
During the conversation, a live audience poll found that more than a quarter of companies are still in reactive mode dealing with the now, instead of focusing on the next or the beyond.