PwC’s “Global Consumer Insights Survey 2020” shows that consumers’ behaviour is rapidly changing. Customers now put more focus on digital, health, and sustainability trends – trends that have been accelerated by the Covid-19 outbreak. Consumer-facing companies and retailers must reinvent their customer purchase journey.
The writing is on the wall: both present and future consumers know exactly what they want – and they expect nothing less than the best customer experience, posing great challenges for companies and their products. For the eleventh consecutive year, PwC has captured the sentiments of urban consumers worldwide in its “Global Consumer Insights Survey 2020”. The study focuses on city dwellers since 80% of global GDP is generated in cities, according to the World Bank, and cities are incubators for innovation and new trends.
Digital and sustainable: benchmarks for the future
Customer relationships are not just in a re-design, but in a revolutionary phase. Customers now demand more from each interaction, including transparency about products and services for provenance, safety and sustainability reasons. At the same time, customers have more choices available than ever before and they can no longer take for granted that all of their beloved brands, products and services are always accessible due to mobility, delivery, scarcity or regulation constraints, or because certain companies just went out of business.
This year, in two separate studies – one before and one after the coronavirus outbreak –, we have surveyed a total of almost 20,000 consumers in in 27 territories and 74 cities on their purchasing behaviour. The digital transformation impacts how people work, eat, communicate, play, learn and consume, and the pandemic has greatly sped up already existing trends. Among the most pronounced findings of the study is the accelerating consumer embrace of digital, health, and sustainability trends. While 45% of global consumers say healthcare is one of the top three reasons for living in a city, 69% have become more focused on mental health and well-being, and 43% expect businesses to be accountable for their environmental impact.
Safety is key for bringing consumers back
The outbreak of the pandemic, and its consequent measures such as the lockdown and social distancing, has deeply affected the consumers’ views on spending. Before the outbreak, 46% of the surveyed consumers planned to spend more in the next 12 months, compared to only 33% after the outbreak. 40% reported a decrease in income as a result of job loss or redundancy, and the percentage of those who said they were going to spend less in the next few months almost doubled from 19 to 36%.
The categories where consumers changed their spending patterns most are clothing and footwear as well as sports equipment and outdoor products, where 51% and 46% said their household spending has decreased in these respective areas. 41% of respondents reported decreased spending on restaurant food pick-up and delivery, 36% on office equipment, and 35% on health and beauty products. In addition, the study’s results suggest that customers’ buying habits will become more volatile, making price and value more important than ever.
Perhaps unsurprisingly, the outbreak of Covid-19 has completely shifted urban consumers’ spending patterns. Whereas in the past, urban consumers were stalwarts of physical shopping, travelling and dining out, they are now making fewer trips to brick and mortar shops, restaurants, and in-person entertainment venues (even in areas where restrictions on such locales have been at least partially lifted). Our second, post-outbreak survey shows that 49% of respondents are spending less because of this decrease social events and activities. The shift to at-home entertainment is evident as well: 50% are using social media more than before social distancing measures were put in place, and 56% are watching more television than before.
For consumers to feel confident enough to return to normal physical interactions with retailers, hotels and other consumer-facing businesses, they need to feel safe. Businesses must make sure to have a convincing plan on how to make their customers’ experience as safe as possible.
The need for healthy living
Furthermore, consumers have adapted how they shop, including how they, for instance, purchase groceries. While in-store grocery shopping is the main channel of choice, over a third of consumers (35%) are now buying food online, with 86% of those who shop online planning to continue after social distancing measures are removed. With this increased dependence on technology, there has also been a rise in online shopping across many devices (mobile phone 45%; computer 41%; tablet 33%). This trend is especially pronounced in China and the Middle East, with 60% and 58% of respondents respectively saying they’ve started shopping more on their mobile phones. This trend illuminates companies’ digital engagement with customers and how they provide unique and content-rich customer experiences by means of new technologies, such as artificial intelligence.
The pandemic has also sharpened consumers’ concept of healthy living. After the outbreak, 69% of respondents stated they were now more focused on mental health, well-being, and physical health, 64% on medical needs, and 63% on diet. Also, the study shows a clear desire for more transparency and sustainability. Consumers want to see positive trends continue in not just their health but environmental health as well. In our pre-outbreak survey, 43% of respondents said they expected businesses to be accountable for their environmental impact; now, in a separate consumer survey of US residents, 75% of respondents called for companies to maintain some of the unintended environmental benefits from the US lockdown, such as less air pollution and cleaner water.
What does this all mean for companies?
One thing is clear: the consumer will be at the centre of any business activity as never before. If companies want to stay relevant, they must understand all the touchpoints with their customers and provide valuable interactions and experiences.
Amongst others, they should:
- understand how customers’ priorities are changing
- re-evaluate their relationship with their customers
- develop new pricing strategies
- address safety concerns
- invest in data and customer relationship management technology
- invest in and upskill their staff and build content-rich end-to-end customer journeys
- develop new, sustainable products and services
- establish greater inclusivity and transparency across supply chain