The new consumer: financially constrained and more savvy
The new consumer: financially constrained and more savv
Globally, a new consumer is emerging — one that is financially constrained, more advanced in their use of digital technologies, more thoughtful and selective in their decision-making, and keen to see COVID-19 as an opportunity to reset values in the world.
The changes we’re seeing are likely not short term. Most consumers believe they will be living their lives very differently for the foreseeable future. Businesses will be faced with new challenges in this new reality. Our research identifies three areas to inform organizations' decisions and plans:
1) The economic impact of COVID-19 will influence behaviors for some time to come.
On average, 40 percent of respondents are financially constrained and are, therefore, reducing their discretionary spend. New and persistent consumer segments have emerged based on the economic and psychological impact of COVID-19. Those most affected (economically and psychologically) are less inclined to pay a premium for branded products or nice-to-have experiential factors and are deferring non-essential purchases.
2) The new consumer is digitally savvy and embraces the ease with which they can interact with organizations through digital channels.
Organizations have responded to COVID-19 with high levels of innovation, including greater digital access to purchasing and customer support. Consumers of all ages are keen for this to continue.
3) Consumers increasingly purchase from organizations they trust, at a time where trust is becoming more complex to build.
Historically, trust was driven by whether organizations delivered on the brand promise. Now, trust is multidimensional and nuanced: trust that companies will continue to put the consumer’s needs first, trust that the consumer will be safe dealing with them and trust that their data will be secure and protected. In addition, younger respondents are concerned about a company’s environmental and social practices.
Organizations must focus on digital enablement of their customer and be clear on where they need to win the customer’s trust. Each of the trends identified in our study accelerated with the beginning of COVID-19. This study confirms that they are persistent both over time and geography, and that their combined impact on consumers’ behaviors has stark implications for organizations.
Companies can no longer protect their price positioning with experiential factors (e.g. in-store coffee shops) that now have less direct benefit to the consumer.
The excerpt was taken from KPMG Thought Leadership article, Consumers and the new reality: Preparing for changing customer needs, behaviors and expectations.
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