By Luís Daniel Rijo in Retail News — Aug 14, 2020

Coronavirus started a consumer behavior transformation, Nielsen finds

Coronavirus (COVID-19) has changed the consumer behavior accross countries.

According to Nielsen, consumers are more risk averse, seeking products/services that deliver value, quality and peace of mind. The willingness to spend on luxuries and entertainment is limited by financial and safety factors. Consumers prioritize in-home spending over discretionary out-of-home expenses.

“Consumer behavior is spinning in fundamental ways right now,” said Nielsen Intelligence Unit leader Scott McKenzie. “The unique macro conditions of a pandemic driving economic recession are forcing consumers to rethink how they shop and what they buy.” McKenzie adds, “Habits are changing in days and weeks. Typically, we, as humans, have months or years to adjust to new conditions. But that’s no longer the world we live in. The implication for brands trying to meet the new needs of consumers is that they must be very focused and very fast in their response.”

Nielsen divides the consumers in 2 groups:

Constrained Spenders: Consumers negatively impacted by COVID-19, will spend to survive.)
Insulated Spenders: Consumers who may adjust situationally even though their incomes remain unchanged by the pandemic.

Constrained Spenders are minimizing stockpiling. New necessities force limitations on basket choices. More consumers rely on self-serviced needs to save on costs. Nielsen says that for Constrained Spenders each purchase holds greater significance due to the limited income. Certain brands, package formats and retailers are at-risk of being abandoned by consumers.

Insulated Spenders are carefully managing the basket size, and trying to keep a larger and broader stock of essential products. They explore and try self-serviced needs to personalize and amplify care and meal solutions at home. Insulated Spenders seek luxuries within FMCG to compensate for travel and entertainment they can no longer safely enjoy. Price becomes more of a purchase driver to consumers as product availability improves.

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