What changes in post-pandemic consumer behavior and what does digital acceleration have to do with it?

The world will never be the same after the Covid-19 pandemic. Changes in consumer behavior and consumption habits in Brazil and in the world are already beginning to appear and to be reflected in digital strategies in various sectors of the economy. The digitization of digitization and the acceleration of digitization are presented as alternatives to meet the new demands.
Customer experience expert Blake Morgan published in the online version of Forbes Magazine that “Covid-19 – the coronavirus pandemic – will have a lasting impact on customer behavior. Customers have lost loved ones, jobs and businesses (…) Flying on a plane, eating at a buffet or getting their nails done is a distant dream for many.”

For that reason, Blake believes that Covid-19 is the “little push” companies needed to take advantage of the benefits of technology and make life less difficult. Is she right? Read on to understand what changes in consumer behavior going forward and what digital acceleration has to do with it.

Covid-19 and the retail market

The Covid-19 pandemic has profoundly affected the world economy. According to data released by the Institute of Applied Economic Research (Ipea), the drop in Brazilian GDP in 2020 should be 6%.

Also according to Ipea, the impact of the crisis has been more severe in the retail and service sector. Expanded commerce fell 13.9% from February to March and 6.4% compared to March 2019. In services, these changes were -6.9% and -2.7%, respectively. The only segment that managed to grow in this period is related to activities considered essential associated with the sale of food (supermarkets), with an increase of 14.6%, and pharmaceutical items, with an increase of 1.3%.

Many entrepreneurs are anxiously awaiting the definitive reopening of the
business. So far, state and municipal decrees have mandated opening on a few occasions, such as on Father’s Day weekend, but time restrictions and social distancing mean that establishments operate with a large reduction in their capacity.
However, even after returning from a situation close to the
normality, of the “new normal”, as the post-pandemic future has been called, the economy will still have to live with a series of difficulties: restaurants, bars, cafeterias and stores in general will have to follow new safety protocols, also implying the limitation of employees and customers.

In addition, household consumption tends to be affected by the reduction in employment and income and by insecurity, which is expected to persist for some time. As a result, people are consuming more responsibly, avoiding waste.

Consumer behavior change

The new normal brought with it new consumption habits. That is, consumers around the world, whether in Brazil, Europe or the United States, have already taken on their own MindReset and rethought their priorities, accelerating a movement that was already happening, of conscious consumption, of the idea of ​​“less is more”. ”.

In addition to food, hygiene items and medication, Adobe Analytics found that online orders for fitness equipment and computers increased by 55% to 50% in the quarantine period. This demonstrates that taking care of health and equipping for the home office are priorities today.

Physical store experiences must change. The very marketing strategies that were once well accepted in the commerce, like makeup sampling or food tasting, will no longer be approved by customers. They will also be afraid to try on clothes or any other product without the certainty that it will be disinfected. Touchscreens should also be cleaned frequently.

According to Blake Morgan, Customer Mindset has been hit in at least seven different ways during the pandemic:

● society is traumatized, having had relatives and friends
infected with the new coronavirus;
● consumer confidence is shaken, as many believe that
entrepreneurs prioritize profit over health;
● buying online is the new normal and 30% of people (according to
Prosper Insights & Analytics) intend to buy more on the internet;
● 36% of people working from home intend to continue
working from home after the pandemic;

● digital transformation is accelerating and technology companies
are hiring more employees;
● streaming companies such as Netflix and Amazon Prime are
thriving during the pandemic;
● one third of people in the world admit that they will reassess their
values after the pandemic (Ernt & Young).

This change in consumer behavior has already been noticed by many retailers who have innovated by listening to buyers and who have started to prioritize the digital medium to sell, thus avoiding putting customers’ lives at risk. In contrast, people who started shopping online seem to have approved of convenience and should follow suit when things get into this new normal.
But some entrepreneurs have not yet realized the need to
reprogram their mind and strategies to cope with the changes. They are behind on the digital acceleration that was happening even before Covid-19. Some of them have already admitted that they will no longer be able to reopen the doors, others need a quick solution to avoid closing altogether.

How digital acceleration contributes to change

The solution to the crisis promoted by the Covid-19 pandemic is digital acceleration. Even those who already invested in technology now need to reprogram themselves and start digitizing digitization, in addition to reviewing processes and adapting them to new times.

If the company wants to remain competitive in the market, it urgently needs to accelerate its digitalization. Large food service chains such as McDonalds, Burger King and Pizza Hut have been doing this for some time now, and with the pandemic, digitization of digitization has come into the picture. They invested even more in technology to shift their focus from sales at the counter to drive-thrus and takeway, sophisticated applications and adopted totems that personalize the customer experience, avoiding physical contact as much as possible.

These large food chains, however, represent only 10% of the Brazilian market. The majority, 90% of companies in the sector, are informal and small restaurants.
This makes the country’s economic situation, at least in terms of the food sector, more worrying, since most of these small establishments have not yet adapted to the digital world and need a good cash flow to exist.

Many of these businesses are family run and informal. They had not implemented any digital delivery system before the pandemic. Perhaps entrepreneurs lacked the mindset for the new world that was opening up with the proliferation of Apps Delivery, or the strategic vision of the digital transformation that was to come.

Of course, no one could predict a pandemic in the proportion that it occurred, but the great world powers already predicted the growth of e-commerce. In China, for example, according to data from the Organization for Economic Co-operation and Development (OECD), the digital economy was responsible for approximately 6% of GDP in 2017. Today, it reaches around
of 30%.

In 2019, Brazilian e-commerce was already lagging behind developed countries, according to a McKinsey survey. While China already had 20% of total retail sales attributed to e-commerce, and the United States 12%, here online sales accounted for only 6%.

Some entrepreneurs in the field, however, believed that the situation would resolve itself more quickly than experience has shown and that they could open their doors soon. As this did not occur, entrepreneurs are left with MinReset, as the safety and health protocols for the resumption of activities require a series of unforeseen investments, which can be even more costly than the costs of implementing digital technology.

How to Adopt MindReset and Adapt to the New Normal

In order to adopt MindReset, that is, to reprogram themselves, the entrepreneur needs, first of all, to assume the new normal and know that he is navigating a sea of ​​uncertainty. Therefore, all processes, strategies, goals must be constantly reviewed.

It is also necessary to notice the changes in the behavior of the
consumer to then seek solutions that respond immediately to demand. Transporting your business to the digital environment is one of the first steps to be taken. Nowadays, any and all products can be sold on apps or online platforms.

Before going out to digitize all processes, however, you should seek to understand how digitization can help increase business. The goal of digital transformation is to solve problems, not create them.

Many companies waste money on digital strategies that fail to achieve their goals. According to research by the Harvard Business Review, of the $1.3 trillion spent globally on digital transformation in 2018, $900 billion was thrown away as initiatives failed to achieve their goals.
So hurry, but keep your feet on the ground. Study, research what the competition is doing, what technological solutions are working; test applications; draw up, with the support of a technology consulting company, a digitalization plan for your business.

Remember that digital transformation never really ends. It is a process that constantly evolves according to technological evolution and the demands and changes in consumer habits. It is also worth mentioning that all areas of the company must be involved in this transformation, as good internal functioning is reflected in customer service.

Steps for a new MindReset and digital transformation

The following is a summary of the 12 steps recommended by the
expert Blake Morgan, adapted from the book The Customer Of The Future, for digital transformation:
1. Customer Focus: The company must change its mindset from product focus to customer focus. Customer focus is the foundation for all other digital transformation decisions;
2. organizational structure: you need to break down internal silos to create a cohesive organization that embraces change;
3. change management: adopting a new mindset, reprogramming, is not easy. One of the most common reasons why digital transformations fail is because employees don’t support them;
4. Transformational Leadership: A successful digital transformation starts at the top with leaders who direct employees to the new vision;
5. technology decisions: digital transformation impacts the entire organization, not just one department;
6. Integration: all data systems need to work together and be integrated with the company’s internal processes;
7. Internal customer experience: when focusing on digital solutions for customers, companies also need to consider their internal customers, that is, employees, and seek feedback from them;
8. Logistics and Supply Chain: To fully leverage a transformation, companies need to look at how the supply chain can be digitized and improved;
9. Data security, privacy and ethics: the adoption of new
Digital solutions opens the door to new questions about data security. It is necessary to offer security to customers;
10. Evolution of products, services and processes: digital transformation requires a change in thinking about how an organization delivers its products and services, and even what the products and services themselves are like, it is necessary to go further;
11. digitalization: digital transformation affects all areas of the
organization and blurs the line between digital and physical stores. That
means putting aside segmented operations to digitize
all aspects of the business;
12. personalization: digital transformation offers opportunities
unparalleled customer service. Leverage digital solutions to understand customers and provide unique recommendations and experiences for them.

As you’ve seen in this article, consumer behavior is changing rapidly with Covid-19. Everything you knew about sales marketing needs to be reviewed. It’s time to promote digitization of digitization and digital acceleration in your company.

Count on Business Reset at this time of change. Contact us to receive a consultancy specializing in digital solutions for your business.