What is the new normal going to be like once confinement measures are lifted.
FMCG players must prepare for the next stage and anticipate changes in consumer behaviour, setup plans and accelerate changes to take advantage of the next new normal – what the world will look like after the confinement measures are lifted. But what exactly does this cover? There are simple and straightforward techniques and tactics to look at.
From our research, there were five trends in consumer retail that emerged and will persist in the coming future. Generally, consumers reduced spending and focused on key areas with which companies can start looking into as to take advantage of:
i) Refocus on Home: Most families and consumers spent much less time outside their home and requested services delivered to their doorstep such as:
- Eeating out less but ordering food to be delivered home,
- Spending less on entertainment but using more online content.
ii) Refocus on essentials: Most consumers cutback on non-essentials including accessories and luxury goods and services, prioritising critical or key needs.
iii) Deal Seeking: Shoppers become increasingly aware of promotions and deals particularly items in discount and promoted products.
iv) Trading Down: Consumers switched to cheaper brands or white labels becoming more cost conscious as a way to better plan their household expenses.
v) Shifting Channels: Many members started using online channels and other selling channels.
There were a number of instilled practices that could open new opportunities in the coming future which included the following vectors:
- Working from Home: Consumers will likely be spending more time at home driven by a desire to save money, being aware of health safety measures and new-found enjoyment in staying home.
- Wellness and Exercise: Healthy eating has remained a priority and at-home exercise interest is growing which includes having equipment, gear and guidance to perform the physical activities for physical fitness and wellness.
- Hygiene Practices: Hygiene has become a core element of wellness as well as high level of connectedness in society and its associated risk. Safety and trust credentials have become central in consumer behaviour.
- Online Entertainment and Learning: Physical distancing increased usage and consumption of online media, online courses and accelerated e-commerce as a key channel as stores have either closed or reduced their presence.
With these key learnings what can we expect in the coming future and what can we expect? The key advice can be detailed in the following components:
|Revenue Angle||Control Angle|
Focus on at home essentials, using white brands or cheaper brands that can be home delivered. Preferably use promotions or sales as key tactics to increase revenue.
Have strict discipline in managing operational costs, acquire assets that are essential and delay non-essentials or make alternative arrangements such as cost sharing.
Enhance or expand your current product or services suite in the above presented vectors as these have increased demand (i.e. working from home, wellness, exercise, hygiene, entertainment, education).
Build a smart, flexible and resilient supply chain which can allow for almost real time sales and stock management. This will allow for better margins and improved profitability.
Explore businesses and be ready to start to provide customers products and services with comfort and convenience and link with above vectors.
|Alliances and Associations
Identify common interest areas, organise groups or associations to contain cost or better manage cost through buying groups or marketing associations.
Join forces with other partners and jointly present a complete offering to the client within the same vector or inter-dependent vectors.
Stay close to regulation changes especially in areas such as consumer health and rights, food supply requirements and employee safety.
The above findings are key findings presented in a dedicated and detailed study performed by a strategic consultancy group which describe trends in consumer retail. The full study is available here - How Consumer Goods companies can prepare for the next normal - Mckinsey