By René Vader, Global Sector Head, Consumer & Retail, KPMG International; Wei Lin, Partner, Global Strategy Group, KPMG in China; and Paul Martin, Chair Global Retail Steering Group & Head of Retail UK, KPMG in the UK
The massive disruption wrought by COVID-19 has left an indelible mark on customers. Indeed, the customers you knew just three months ago are not the same people today. Normal preferences have shifted as customers exercise caution – about where, what and how they make their purchases. The impact on retailers and consumer goods companies will be tremendous.
Granted, we still know comparatively little about the COVID-19 virus and its long-term implications. But what’s clear is that it has already fundamentally changed the way people around the world think and act.
And China – the first country to successfully move through at least one wave of the virus – offers some very interesting insights into how customer preferences, needs and expectations might evolve in other markets in the coming months.
The impact on customers was obvious from the beginning. As the virus first started to circulate, the shift in customer preferences was palpable. Almost overnight, physical stores were shunned. Customer demand shifted from discretionary items to those perceived as essentials. People started to prioritize health and supply chain safety over cost and convenience.
At the same time, China’s home-bound consumers took to the internet to talk, work and make their purchases. Online channels of certain brands – particularly those in the grocery and food industries – saw massive volume. Those companies without a customer-friendly digital presence scrambled to fill the gap. In just a matter of weeks, China’s pace of digital adoption and rate of digital literacy skyrocketed.
Looking at China’s experience over the past three months, we see several important lessons for consumer and retail companies seeking to retain customers as their markets deal with this initial wave of the pandemic.
Clearly, every market and every population is different. China, for example, has invested heavily into its digital infrastructure over the past few years and, as a result, has largely been able to manage the increase in digital demand. Markets that have fallen behind on these types of investments may struggle to convert consumers from the physical to the digital.
However, our view indicates that China’s experience offers some rare insights into how this pandemic is changing customer preferences, needs and expectations. And in this world, retailers and consumer goods companies will want to take inspiration and ideas from wherever they come.