EY Partner and New Zealand Consumer Sector lead, Rich Macfarlane, says that while the New Zealand recovery has been better and faster than most in the world, some of the underlying issues for consumers have been exacerbated. “Lockdown has forced consumers online, but the actual experience of doing that for a lot of our big brands here has been challenging.
“So now we’re coming out the other side of the rebuild, the experience isn’t one that consumers necessarily want to engage in. They did when they didn’t have a choice because of lockdown but now we’re seeing them switch back to more traditional channels,” Macfarlane says.
Despite this, there has been some great ingenuity in the market that came out of the darkest days of lockdown. “Consumer facing challenges were released in a matter of days, and the conversation now happening with a lot of our clients is how to keep that pace of change and keep providing that high level of innovation.”
Even switches in business models, such as tourism operators relying on inbound tourists restructuring their operations to take advantage of the domestic market via shifts in pricing and product and service offerings, is an example of the responsiveness to changing consumer markets.
The question for businesses becomes, do I segment my offering and adapt my strategy, he says.
“What we’re seeing is the consumer saying, ‘I might downscale from a premium product to a home brand product but I might also like to make a choice about whether I spend that money on the product at all’, so a complete rethink about where and why they spend money,” Macfarlane says.
For organisations and businesses looking to survive the values shift, it’s helpful to see this new phase as the culmination of a period of enforced self-reflection. As American biographer Robert A. Caro wrote after years of interviewing people and writing about their lives: “there are certain moments in life when you suddenly understand something about yourself”.
People across New Zealand and Australia are reaching that point of self-understanding and that creates an incredibly challenging environment for organisations looking to accelerate out of the pandemic.
The most fundamental competitive advantage available today is to have a better understanding of the impact of the pandemic on people and the way it is re-shaping how they are looking at their life and the choices they will make. The organisations that will succeed will be the most prescient, with foresight built on unique insight into consumer behaviour.