One of the most compelling questions we keep asking today is how will consumers’ behaviour change as a result of the coronavirus, the restrictions imposed, the partial and full lockdown, the need for social distancing, the resulting impact on the economy and one’s income. The question itself implies that consumer behaviour will change, even if there could be those who believe that everything will go back to what it was once the pandemic is over.

If we were to accept economic theory as a given, the consumer will always be seeking to maximise what students of economics call “utility”. Students would define utility as the total satisfaction derived from the consumption of a good or service. As such, it depends on the usefulness that the consumer perceives in that product or service or the enjoyment the consumer derives from its consumption. This is the theory and I do not believe that, in this respect, there will be any change as a result of the coronavirus.

What is more likely to change is what the consumer perceives as useful or as providing enjoyment, given the various external factors that have been impacting and will continue to impact the consumer’s life. Certainly, not everyone has been impacted in the same way by the pandemic and what drives consumer demand will not be the same for everyone.

I am not aware of any ground-breaking research in this area and so anecdotes will have to help us understand how consumer sentiments will change. We also have results of research conducted among persons working from home during the first months of the pandemic.

Businesses need to go beyond the way they usually look at their product

Topping the list is health concerns. The fact that symptoms of the coronavirus do not manifest themselves immediately has made consumers wonder how safe they are wherever they go. Concerns about mental health have also become greater. So within the space of a few months we have moved from a situation of feeling quite safe and where mental health was, rightly or wrongly, a non-issue, to a situation where health concerns have become among the chief concerns.

Another consideration to make is financial anxiety. A significant number of persons are very uncertain as to whether they will have a job in a couple of months’ time or what income they will be earning. They may not be losing their job but their only income would be the wage subsidy provided by the government. This is likely to redirect consumer expenditure.

Working remotely has brought about an element of social isolation. Last week, I wrote that what employees working remotely are missing most is the social interaction with their colleagues, as digital connectivity does not provide us with a great enough sense of belonging. On the other hand, we feel closer to our families and possibly even our closest friends. Therefore, our perceptions of what constitutes fun and entertainment are likely to change.

There are likely to be other factors affecting consumer sentiments. However, even focussing on just these three considerations will be a tough challenge for businesses.

One possible strategy is to seek to add value to one’s product offer or service. This can be done in various ways. The most obvious one is to offer price discounts. This would tend to answer the sentiment of financial anxiety; but it is not enough.

Businesses need to go beyond the way they usually look at their product. What was once judged to be a necessity, like a personal care product, could now have become a bit of a luxury. In order to manage their concerns for their physical and mental health and that of their families, people might need to turn to certain products (such as personal care products) to provide them with fun, enjoyment and that special good feeling. As such, a price discount on such products would also be a good tactic.

Given the social isolation sentiment, businesses need to promote togetherness in their message. Consumers need to see something in the goods and services they purchase that brings them closer to their family and friends and that provides them with a reassurance and a sense of comfort.

During the next stages of the pandemic and afterwards, the consumer will come with a set of expectations that will not be easy to decipher. This is why there will be a ‘new normal’. What will eventually drive demand and deliver utility to the consumer is a world we still need to discover.