Five key groups of consumer behaviour are emerging from the COVID-19 pandemic, one marketing expert says
Professor Gary Mortimer, Professor of Marketing and Consumer Behaviour at QUT Business School, addressed the APP2021 conference on the Gold Coast on Friday, to take delegates through consumer behaviour in a post-COVID-19 world.
From a discussion of just why the toilet paper shortage of March 2020 took place the way it did – an “operational problem” in that supermarkets can only hold so much stock of the product, thus multiple buying denudes shelves quickly, plus “herd mentality” – to the outlook for the next couple of years, Professor Mortimer discussed how consumers have behaved during the pandemic to date… and how they are likely to behave in the near future.
COVID-19 challenged and changed the ways businesses operate, and the way consumers act, he said.
Thanks to stay-at-home orders as well as a preference to “cocoon” in uncertain times, retailers like Bunnings saw their sales soar; as did the online channel in general.
Online “literally” shifted three years ahead of where it would have been in just seven months, Professor Mortimer said.
He highlighted five new post-COVID consumer segments:
The “Bang” group is comprised of younger people, generally aged 18 to 25, who do not have big mortgages or loans, but whose livelihoods were interrupted by the pandemic – often hospitality and tourism workers.
While they were not generally considered to be essential workers, this group is now back, and out shopping.
“At the other end of that spectrum is Keep Cutting,” Professor Mortimer said. These “classic Aussie battlers” are “just making do with what they can do” and continuing to trim their spending.
“COVID was certainly just another nail in the coffin for this particular segment,” he told delegates.
This is the least educated segment, and may still be affected by job losses.
Next was the “Cautiously Extravagant” group – around 25% of the market.
These middle-to-high-income earners are concerned about their health, and likely to engage with pharmacy, as they have been keeping an eye on how the pandemic has played out internationally, and have significant concerns.
“They’re coming in to see you because they want advice, they want to get that blood pressure checked… they’re thinking about losing weight, they’re thinking about getting fitter and healthier.”
These people are brand loyal, and likely to stick with what they know and trust.
The Staying Frugal group are spending less and trying to re-establish themselves, after they have been perhaps stood down from work and paused their mortgage repayments.
They are now able to start paying again, but are pessimistic about the future – and as a result may be shifting to low-cost basics.
“They’re probably still hibernating,” Professor Mortimer said, saying that this was a good opportunity to talk to them about using generic medicines, and that they are also highly likely to use e-scripts or delivery services.
The last group, comprising 31% of people, are the “Back to Normal” crowd – who may have gone through the pandemic relatively unscathed, and looking to see what the future holds.
Vendors can make connections with these people now, he said – they are already looking forward to international borders opening, and so international tourism agencies have been able to talk to them about what they can do when this happens.
“There’s this pent-up desire to get back to normal.”
But the landscape won’t be back to normal for a while – possibly not for “many years”.
In the meantime, Professor Mortimer said that pharmacies, along with other retailers, can adapt in several ways.
For example, rationalising site leases, especially for badly affected CBD stores, is important; pharmacies in the suburbs can benefit from a “return to localism”.
“We’re actually more engaged with local brands and local businesses,” he said.
Citing the successful recent business strategy of the IGA supermarket group, which places a strong emphasis on the concept that franchisees have key connections to their communities, Professor Mortimer told delegates that pharmacy is well placed to promote local brands and businesses.
This could include storytelling about a business’s local credentials, and the fact that pharmacists working there have been doing so for a number of years.
He also noted that nearly 60% of consumers are now strongly considering value for money – but that this means different things to different people.
For example, a patient with an e-script could choose to send it to a number of local pharmacies; but instead of low price, they might value loyalty points available at one pharmacy, or the fact that a second pharmacy is very fast and can have their script ready to Click and Collect in 30 minutes.
A third pharmacy might have strong local connections, and give the consumer a sense that they are supporting their local community – “there’s some social value in that for me”.
He also advised that pharmacies have a key role in dispelling myths and misconceptions about vaccines, particularly given the amount of vaccine hesitancy around the COVID vaccine.
And digital will be the new norm.
“You need to be in that space,” he said.