Coronavirus has created turmoil in the entire world. It has sent shockwaves in every economy and country. At present, 201 countries are plagued with death and destruction due to the virus. The cases don’t seem to end, they are continuously increasing and the death toll becoming extremely traumatic. The cases worldwide has reached 3.3M with 235k deaths and cases in India has crossed 37,000 with 1,152 deaths.
To contain its spread, nationwide lockdown has been imposed. Actually, half of the world is in a lockdown state right now due to the virus. People are forced to remain inside their houses and all economic operations are on a standstill.
In such a situation people are in their homes as they have no other choice. The expenditure on food, TV DTH, recharge of mobile phones, monthly EMI’s, fees of children’s schools/colleges and all other regular expenditures are taking place. However, there is no source of income. In such a situation, let’s see what will be the impact of lockdown, economic crisis on consumer behaviour.
It is an indisputably proven fact that any crisis will leave an ingrained impact upon the consumers. Coronavirus crisis is no exception.
What is consumer behaviour?
Consumer behaviour is the study of the activities associated with purchase, use and disposal of goods and services along with the study of consumer’s mental, emotional and physical state.
Why will coronavirus affect consumer behaviour?
- Since expenditures of people haven’t decreased and income is nill, consumers will spend judiciously and try to not be extravagant.
- Middle class or lower middle class people have only their savings as their support system right now which is continuously perishing. In the future when situation normalises they will first refill their savings and then they are going are going to fulfil their wants.
- Unemployment is on a spree. Nobody knows what future holds for them, wheather they will be retained at job or not. When unemployment spikes up, which is definitely going to be the case after lockdown (it is estimated that 23% people will lose their job after lockdown excluding the ones who have already lost them) people will try to save every inch here and there.
- Lockdown has made people self- reliant and independent. All of them have become lockdown chefs. When situation normalises, it can likely be the case that people can spend their Sunday’s cooking and watching movies at home.
How coronavirus will affect consumer behaviour?
This particular topic has four dimensions to it :
- Decrease in luxury spending
- Increase in spending which was low during lockdown
- How fear dominates consumer behaviour
- Shift in consumer behaviour
1) So, the first is decrease in luxury spending.
Earlier, it took people not even a minute to choose restaurants over self-cooking, international vacations over domestic holidays, movies in the best of cinemas with recliner seats over watching a movie at home. Earlier people could spend Rs.1500 – Rs2000 inside a cinema hall on food and drinks with the blink of an eye, could plan a big fat family dinner in 7 star hotels or recklessly invest in gold or buy some jewellery unnecessarily. However, all this might change after the lockdown. Even if the shift isn’t a major one, a slight tendency towards saving money will increase. According to an estimate, 41% of global consumers have delayed vacations and holidays.
However, at the same time this lockdown didn’t come without pros.
Humans are social animals and our ability to adapt places us above every other existent specie. We have realised that it’s not “impossible” to stay at home for 40 days, eat healthy food or cook ourselves (#lockdownChef is the new trending tag on social networking sites these days), have a movie night at home, spend some quality family time. Women spending thousand bucks each week in the parlour can recapitulate the parlour services at their homes THEMSELVES! Skype, zoom and other video conferencing apps have replaced the need of travelling. Digital India is no more a far-fledged dream.
Thus, the lock down and forthcoming economic crisis have shifted the consumer behaviour graph in such a way that it will reduce prodigal spending and make us more pocket friendly, self-reliant and independent.
2) Increase in spending which was low during lockdown
The lockdown, economic crisis, unemployment has aggravated the stress levels in people. Many of them are frustrated by the restrictions on movement. This has increased the propensity of people to indulge in substance abuse or “stress busters” like cigarettes, alcohol. Also, people who earlier used to engage themselves in work to avoid distractions has nothing to do now and tend to indulge more in smoking or consumption of alcohol.
3) Consumer behaviour is not only affected by the regulation of money but is also governed through fear. Coronavirus has come as a thunderbolt to people.
- In a survey released by the International Air Transport Association (AITA) revealed that people with Corona virus ‘Covid-19’ are so scared that 40 percent of people have said that even after situation normalises or even if the airlines guarantee virus free journeys they will not travel for atleast six months.
- The sale of chicken or meat related products has declined by 60% although there is no direct connection between coronavirus and meat.
Thus, it’s not only financial constraints or vanishing of savings that will impact the way people consume but fear related factors will also influence consumer behaviour.
4) Due to the virus the consumer behaviour has shifted to a new thing – hygiene. Soaps, sanitisers, masks are indispensable right now. Earlier, buying soaps or carrying sanitizers were considered “wasteful” and “not important”. Coronavirus has changed this mindset. In the coming days, masks, sanitisers are going to be travel buddies of people. People have already hoarded a lot of these essentials during the lockdown and will continue to do so.