Covid-19 has changed most aspects of our lives and caused upheaval in every business imaginable – and consumer spending, one of the most important driving forces for economic growth, has been no exception. The pandemic has not only impacted some important factors that determine consumer spending, such as employment, cost of living and consumer confidence, it has also changed how consumers are spending their incomes.
To find out more about how consumer patterns changed during the lockdowns, which began to be implemented across Pakistan on March 23, Aurora conducted the Aurora Covid-19 Consumer Behaviour Survey on aurora.dawn.com and on dawn.com between April 14, 2020 and May 11, 2020, which was answered by 1,326 people. (View the survey results here). According to the Survey, 62.3% of respondents confirmed that their overall spending had decreased; 19.4% were of the opinion that the lockdown had not made much difference and 13.3% that their spending had increased.
1. Groceries, Disinfectants and Sanitizers on the Rise
Although consumers may have been spending less or very little on non-essential items they used this amount to stock up on other items instead. These include groceries such as packaged food, fresh food, beverages (58.7%) – not surprising given that the lockdown led people to throng supermarkets and stores. Groceries most stocked upon on include daily essentials such as bread, flour, pulses, rice and sugar (53.4%), fruit and vegetables (44.7%), snacks (36.3%), meat/poultry (33.4%), and frozen foods (21.7%). Other items that consumers have been spending more on include personal protection products, such as sanitizers, gloves and masks (54.5%).
Noteworthy in this respect is the fact that 44.7% said they had never purchased or used personal protection items before the Covid-19 outbreak (42% used them occasionally and only 13.3% on a regular basis). Other categories where consumers are spending more on include household cleaning products (49.8%), personal care products (42.7%) and OTC medicines (16.5%).
2. Dining Out On the Dive
Respondents stated that they are spending less on clothes (74.2%), fuel (75.3%), and recreational activities (69.3%). A category that has also been in the red is the food business (restaurants, eating out/ordering and takeaways), as 79% said that they are ordering in and dining out less due to the lockdown. Prior to the lockdown, 59.6% ordered food at least once a week or less from a restaurant, 25.3% ordered once or twice a week, 9.7% twice or thrice a week and more than 5% four or more times a week. Furthermore, most of the people who regularly ordered food or ate out opted not to order in even when ordering was available in their cities (51.8%).
3. Online Shopping and Banking Booming?
Surprisingly, while the rest of the world saw a spike in online shopping during the lockdown (groceries mainly), in Pakistan 53.4% still purchased groceries from physical stores. Only 10.6% used an online channel to buy an item for the first time although 18.7% said they are ordering more online now; 16.8% said they regularly used e-commerce channels for their purchases even before the lockdown. Nearly 12% said they were willing to try online shopping for the first time but had not done it yet. (7.5% said they did not have the option to shop online in their respective cities or areas). The most common items purchased online include clothes (9.8%), hand sanitizers (9.3%), masks (7.9%), electronic appliances (6.2%), meat/poultry (6%) and gloves (5%).
While the lockdown has seen a surge in internet banking globally, in Pakistan only 5.9% downloaded banking apps or used online banking services for the first time during the lockdown; 22.5% said they are not using online banking channels while 4.7% said they would like to try in the near future. Nearly 66% respondents who said they use online banking channels stated that they had been doing so even before the lockdown.
4. Brand Loyalty Compromised?
The last two months have seen a shift in consumer priority, with the focus moving towards availability, due to shortages as a result of panic buying, stores and supermarkets running out of stock (33.8% said that they have been unable to source their preferred brands). This demand and supply gap has led to consumers trying alternate brands (21%) while 8.8% purposely opted to buy cheaper brands in order to economise. Consumers who stayed loyal to their brands constituted 31.3% and 38.6% said they were not brand loyal.
When asked what they would do in the event of the price of a preferred brand going up, 22% answered they would continue to buy it, 49.8% would opt for a cheaper alternative and 28.2% were not sure.
5. Are Brands Communicating Effectively?
When asked if brands have created advertising/communication messages relevant to Covid-19, 35.8% stated yes; when asked to name these brands, the ones mentioned most frequently included soap and telecoms: Lifebuoy (12%), Dettol (4%), Safeguard (3%), Jazz (1%), Telenor (1%) and Ufone (1%). “Brands have moulded their ads and product line-up according to the onset of Covid-19; telecoms have made recharging balances much easier. Almost every retail setup in my locality has started incorporating delivery services in their business for smooth inflows,” said one of the respondents. Others argued that most brands were advertising in the same way; they had only added the line ‘Stay Home, Stay Safe’ at the end of their adverts. Similarly, when asked if brands have made an active effort to disseminate information about how to deal with Covid-19, 15% replied in the affirmative. “Covid-19 is definitely a marketing point for most brands these days.
Brands don’t seem to want to miss this bandwagon. Millennials and Generation Z prioritise values based brands and marketers are aware of this” remarked one respondent. The top three brands mentioned included Lifebuoy (5%), Dettol (2%), and Safeguard (1%). As to whether any brands stood out because of a CSR initiative, 24% named a brand – Jazz (3%) followed by Asim Jofa, EBM, Telenor, Engro and Unilever (1 to 2%). One respondent remarked “I read that many brands are actually donating money to the Prime Minister’s Ehsaas Emergency Cash program, which is good to see but more efforts need to be made by other brands as well.”
How these trends will shape up in the coming weeks will depend upon the severity of the pandemic and the extent to which brands will be able to respond to what is increasingly likely to be a forever changed world.
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