(Second of two parts)
Although consumer behaviors were already shifting before the COVID-19 pandemic impacted economies and societies, some of the changes were accelerated by the disruption. This meant consumer companies needed to understand what drives consumer lifestyles by redefining how to best serve consumers, looking at the business through a non-traditional lens and anticipating disruptors.
In the first part of this article, we discussed the five dominant behavioral shifts as identified in the EY Future Consumer Index, which surveyed more than 5,500 respondents across six Asia-Pacific countries (China, India, Indonesia, Japan, Australia and New Zealand) from among 20 countries in total. However, these facts seem consistent from the survey — that consumers are prioritizing pricing in their purchasing criteria as they place high concern over their finances, and that they prioritize their health and safety in considering wellness products and digital experiences that do not require them to leave their homes. These behaviors can be traced to the early stages of the pandemic, where consumers worried for the health of their families, the ability to purchase their basic needs, and the loss of freedoms previously taken for granted.
Although individual consumer behaviors are likely to be volatile, companies can anticipate their needs in the areas of value, health, sustainability, experiences and the omnichannel. In our own market, we are likewise already seeing rapidly shifting consumer behaviors driven by the pandemic. We have seen the rise of social media retailers, particularly in the sectors of food and beverages. Large, e-retailing platforms have branched out to encompass basic necessities, groceries, insurance products and have even donation channels, and consumers have shifted bargain-hunting behaviors online with monthly online sales and price-offs having become the norm.
Clearly, addressing these shifting consumer expectations will require consumer companies to take a hard look across their organization — from the strategy, business model and operations to talent and capabilities. In order to remain competitive and serve the customers of the future, leaders of consumer companies should consider three key actions that have never been as important in the current landscape. These actions will provide the agility required for companies to adapt rapidly to customer expectations as they continue to evolve.
REDEFINE HOW TO BEST SERVE THE CONSUMER
The survey revealed that Asia-Pacific consumers are increasingly open to sharing their personal life data. More than ever, consumer companies have a unique opportunity and strong impetus to enhance their capability to make the right — and trusted — use of such data. Technology like advanced analytics and artificial intelligence can help improve their listening abilities and profile consumers more intelligently to proactively anticipate where, when and what they buy. The ability to adapt products and services with speed and agility can make a critical difference in how well companies can keep consumers connected to the brand. For example, the prolonged lockdown dramatically affected the purchase of personal care products. As the quarantine restriction eases and mobility increases, we are likely to see a resurgence in personal pampering. Businesses in this sector that can find new ways to connect and serve their customers may find rich new opportunities for growth.
LOOK AT THE BUSINESS THROUGH A NON-TRADITIONAL LENS
To many consumer companies, serving consumers in a different way, such as embarking on direct-to-consumer strategies or developing a compelling consumer community platform, may not be profitable in the short term or make sense in isolation. Similarly, sustainability-related programs are often seen as a cost and associated with negative ROI. However, many of these programs can create strategic value for the company as a whole, whether in terms of enhancing brand image and awareness, generating data that can be further monetized or driving employees’ commitment, making the business more resilient against disruption. Consumer companies must therefore adopt a strategy that encompasses a broader view of value as well as a focus on profitable growth.
ANTICIPATE POTENTIAL DISRUPTORS
Consumer companies need to be increasingly forward-looking and investing time and effort to anticipate potential disruptions that could upend their established business models. In recent years, the blurring of sector boundaries has seen powerful digital ecosystems emerging, enabling players — both new and incumbent — to complement one another to offer interconnected products and services in one integrated experience. Take, for example, how food and beverage or financial services companies are disrupted by the technology and mobility sectors, giving rise to super apps that consumers are familiar with today. Locally, we have seen how some companies have evolved, such as ride-sharing apps that now offer food, retail, on-demand purchase assistance, and even bill payment functions. Consumer companies must act now to define and implement a successful digital ecosystems strategy and step up innovation to compete in the short and longer term — or risk being left behind.
WINNING THE FUTURE CUSTOMER
As the COVID-19 pandemic continues its unpredictable course, each of the above actions will enable consumer companies to respond nimbly to the future consumer’s continuum of preferences and attributes. There is no single consumer persona and therefore no one-size-fits-all strategy. This makes developing and executing the right one for every company all the more urgent and important to ensure that they win the customers of the future.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the authors and do not necessarily represent the views of SGV & Co.
Olivier Gergele is the EY ASEAN Consumer Products & Retail leader, Maria Kathrina S. Macaisa-Peña is a business consulting partner and the Consumer Products and Retail Sector leader of SGV & Co., and Fabrice Imparato and Shaurya Ahuja are EY-Parthenon partners.