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An event of this magnitude has not been experienced in a lifetime for many Australians with COVID-19 expected to trigger the deepest recession since WWII. After an expected short celebratory spending uptick as restrictions are eased, Australians will likely re-evaluate how they spend their time and money. 

Having rediscovered the pleasures of baking, making and spending time at home, there is no question that this experience will change how we engage with retailers and brands. In our report, Beyond COVID-19: From panic buying to mindful consumption (PDF 1.9 MB), we explore the possibility that we are entering an era of mindful consumption and share our perspectives on how to respond and prepare.

What we’ve learned is that:

  • The Australian retail sector could experience a short-lived ‘celebratory’ spending uptick as the health crisis is controlled.
  • A good outcome for the financial crisis would be a 12 month decline in consumer confidence followed by a 12 month rise, similar to Australia’s experience through the Global Financial Crisis.
  • Australia’s collective experience of slowing down and spending 24 hours a day either with, or isolated from, our loved ones, concerned about our livelihoods, will likely accelerate the shift towards an era of mindful consumption.

What is mindful consumption?

Ethical and sustainable

A real focus on ethical and sustainability components behind brands – social cause, transparent sourcing are critical and differentiating. A support of brands that bring human connection versus materialism alone.

Simplicity and safe spaces

A renewed focus on simplicity – brands that are focussed on calm, practical, no fuss components to their product and service provision. Dual purpose wear, nurturing and investment in ones ‘safe space’ – home, garden, health and wellness.

Needs based consumption
Needs based assessments taking place due to economic uncertainty – do I really need this? Outsourced services now being self-fulfilled – ‘do it yourself’, beauty, fitness being replaced by apps and newly formed outdoor routines.
Convenience extends post sale
New definitions of convenience with the rise of online consumption extending to post sales - frictionless returns and post purchase service become critical differentiators.

 

Be prepared and responsive

How can Australian retailers and brands reconnect with consumers post-COVID-19?

  • Make the most of ‘celebratory’ spending uptick and invest to differentiate the physical shopping experience.
  • Stay closely connected to loyal customers, develop and offer personalised virtual experiences and strategically use exclusives and promotions through loyalty programs to keep them engaged through the financial downturn. For new customer acquisition, create trial moments through pricing and promotion.
  • Retain and improve the new service models and digital fixes initiated by coronavirus is critical.
  • Brands that have a ruthless focus on frictionless, experience-rich physical and digital customer journeys that extend beyond the purchase will be best positioned.
  • Innovate to increase the speed and agility of merchandise buying cycles.
  • Ensure marketing and sales strategies speak to the mindful consumption value proposition – leveraging social channels to propagate word of mouth referrals which are now increasingly important.

 

 

If you have any questions regarding the content of this report and would like speak to someone from our team please contact us.