COVID-19 is changing consumer behavior worldwide; business needs to adapt rapidly
Businesses need to adapt to changing consumer behavior
New KPMG global survey of 75,000 consumers highlights key trends across 12 markets.
COVID-19 is having a lasting, worldwide impact on consumer needs, preferences and behaviors, according to a new report from KPMG International, “Responding to consumer trends in the new reality”. The report tracks the opinions of 75,000 consumers in 12 markets to examine the changes and how businesses need to think and act differently in response to these trends.
Key trends include:
- Two in five (43 percent) consumers are worried about their financial security in 2021
- More than one-third (36 percent), are prioritizing savings over spending
- 37 percent are working from home more, and 60 percent plan to do so more in the future
- One in five (20 percent) want to stay home as much as possible
- Confidence in public transportation has declined 37 percent compared to pre-COVID-19
- Net spend is expected to be 21 percent less over the next 6-12 months, versus pre-COVID-19
- Close to half (45 percent) predict digital channels will be their main connection to brands
- “Value for money” is ranked by 63 percent as the top purchase criteria
“COVID-19 has affected every consumer somewhat differently, but there are some important themes,” said Gary Reader, Global Head of Clients and Markets, KPMG International Limited. “Consumers are staying and working from home more, prioritizing savings over spending and doing business digitally even more than before. For business, it is more important than ever to understand what is driving their customer and then look at their strategy and business model to determine how they need to adapt to keep pace with shifting customer demands.”
There is a dichotomy in how consumers have been affected economically. While 41 percent report being worse off financially, nearly half, 45 percent, feel financially comfortable which could mean opportunities for business that are able to meet the new consumer’s expectations. Irrespective of how financially secure they feel, all consumers predict they will spend less in the next 6-12 months and all are prioritizing savings. Perhaps not surprisingly, ‘value for money’ is ranked as the key purchase driver.
The survey tracks consumer trends between May and September 2020 across five industry sectors: consumer & retail (grocery and non-grocery), banking, insurance, entertainment & leisure and travel & tourism. Overall, the survey finds that consumers tend to trust brands less than they did pre-COVID 19. Insurance was the only sector to see a consistent net gain in trust in the May to September period; while travel & tourism and entertainment & leisure suffered the greatest erosion of brand trust. All sectors generally saw a modest increase in brand trust in September, with the exception of banking, which held even.
“Consumer brand relationships are likely to permanently change as a result of COVID-19 and businesses need to reexamine how they build trust with their customers in this new reality. The brands that can demonstrate and articulate their value and adapt to rapidly changing customer demands as they spend more time at home and rely more on digital, are the ones that will be most successful,” said René Vader, Global Sector Head, Consumer & Retail, KPMG International Limited.
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