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Friday, October 30, 2020

Aashutosh Taparia, Regional Business Head, shares his insights on how Retailers are managing the current pandemic

You do not need an industry expert to describe the changing customer behavior in COVID 19 world. We all are experiencing the same from the closed doors of our homes. Customer’s everyday preferences are adjusting to new normal, emerging from this world crisis and we can see the changing voice of customer in FMCG and grocery retailing space.

How do I buy fruits and vegetables?
Pre Covid-19: I must choose my own vegetables and fruits; I cannot let anyone else do it.
In Covid-19: So many people are touching the vegetables at vendors, there must be a contactless way to get them.

How do I purchase staples?
Pre Covid-19: Why pay more for packaging when I can get almost same quality in loose? Brands are charging extra for no good reason.
In Covid-19: We should only go for packaged dals and rice. They might be little expensive, but at least they would be easier to handle and packed hygienically.

How do I buy FMCG food (ready to eat, ready to cook category)?
Pre Covid-19: Please only buy “Brand B” bourbon biscuits for our kid. He does not like any other brand.
In Covid-19: Stop wasting time looking for that specific biscuit, buy any bourbon, if not available buy any chocolate cream. He is just a baby and cannot be so choosy. We must teach him to eat everything.

How do I buy fmcg non-food (Cleaning Supplies)?
Pre Covid-19: Why do we need a spin mop/ dishwash gel? A normal mop/dish bar is fine enough.
In Covid-19: Why don’t we have a spin mop/ dishwash gel? Everyone in the family can use it with ease and help at home.

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The change in consumer dialogues highlight the shift in customer behavior which is driven by evolving social structure and working order. The social norms are have just become to change and they would establish a new normal in due course. As an Industry it is critical to keep an eye on this change with would have an everlasting impact to Post COVID era. There are few trends which are already establishing themselves are:

  1. “Touch & Feel” would lose prominence in long run with customer gaining more confidence and brands bringing in more innovation in product and delivery. Customers would be more willing to try and buy “contactless”. The categories which are hitherto heavily having a contact aspect will drive delivery innovations.
  2. Customers would prefer packaged goods over loose articles. The transition from loose to white-label to branded is slated to be quicker than ever before.
  3. With constrained supply from market leaders, the customers would become brand agnostic in short run, and this would open-up market for new brand to work upwards and establish themselves and change the category market share composition. leadership scoreboard.
  4. Value of monthly household basket of goods would increase considering it would be driven by direct consumption, buyer would be consumers of goods. What it implies is, with little or no helps to clean, cook, manage the household activities consumers would upgrade to products which provide convenience in managing these activities.
  5. New categories or categories which were insignificantly small would see a surge, like sanitizer, facemask, personal grooming appliances, etc.
    COVID time is offering level playing field for all players, big players once dominating the supply chain are badly hit by supply-demand gap, giving small players a thriving chance to hit the road running, reducing lots of their regular concerns like,
  6. I can create quality products at par (if not better) with any of the market leaders, but do not have marketing muscle to match the leaders.
  7. How can I convince retailer to stock my products without deep cuts and get a fair chance to reach consumer?
  8. How can I convince loyal customers to buy and try my product?
    In COVID times, most brands would struggle to manufacture in the short term and there will be lot of demand space created for region brands or local manufacturers to take a shot at acquiring a slice of the consumption pie. Retailers might give shelf space as they are running low on some critical categories from top brands. Consumers might try your product while their brand is not available. It is time for big players reimagine the supply side while for small players with demolishing entry barriers it is time to act fast.
    Finally, one key shift will be how a major chunk of the demand shifts to E-comm. Streaming sites will take away attention share from multiplexes. Marketplaces & hyperlocals will gain prominence. Many of the existing “Brick & mortar” will try to go omni-channel and become a “Click & mortar” hybrid. This is clearly a landmark moment where the winds will shift and drive permanent change in consumption behavior. While I don’t think the current digital vs physical shares will reverse, I do think that digital (although a fast-growing segment already) will show a multifold increase and gain prominence in the new world order.
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