Istanbul Office Director
Simon-Kucher & Partners
Simon - Kucher & Partners, the international management consultancy company, revealed how the Covid-19 era changed shopping behaviors of consumers in a study conducted with more than 1500 people. Adversely affected sectors need to reassess their business models to achieve pre-pandemic results.
As we go through unprecedented times on a global scale due to the Covid-19 outbreak, it continues to affect all humanity. In this period, while consumers change their shopping behaviors, companies and brands are trying to adopt and meet new expectations of consumers.
Pointing out that it is critical for companies to take a closer look at consumer behaviors and understand what is changing and what is permanent, Simon-Kucher & Partners (SKP) Istanbul Office conducted a survey with more than 1500 consumers to understand the change in consumer behaviors during the pandemic. While the research conducted by SKP Istanbul Office focuses on 4 basic dimensions of forward-looking consumer behavior and expectations in different sectors; It provides data on how consumers change their budgets and spending across categories, how channel preferences differ along the way, how consumers seek value through promotions and discounts, as well as their views on loyalty and subscription concepts.
The research also revealed what the future looks like from the consumer's perspective. The impact on industries varies significantly. While areas such as e-commerce and essential needs-oriented categories benefited commercially, other areas such as cosmetics and fashion were the most affected. Nine out of 10 customers in Turkey say that Covid-19 outbreak changed their shopping behavior to some extent. Forty percent of the respondents state that they permanently change their shopping behavior, while 51 percent say they change it temporarily.
MOST IMPORTANT CHANGE IS SWITCH TO ONLINE CHANNEL
In the study, it was observed that the change in shopping habits was primarily the transition to the online channel, the second change stated by the consumers was the reduction of expenditures and the third place was the priority of hygiene rules in shopping from physical stores. While 25 percent of the participants state that they buy only the necessary products with priority, 22 percent of the participants prefer to shop from the shops in the neighborhood and close to the houses.
When we examine the details of the transition to the online channel, we see that the most important increase is in the use of online marketplaces. Compared to the pre-pandemic era, the share of online marketplaces is expected to increase in 2021. However, it is observed that online channels of the brands will now be important. It is observed that the usage share of the brands' own mobile applications will increase from 11% to 15% and the usage share of websites from 20% to 22%. This shows that companies should give importance to “omnichannel” strategies, which means that they communicate simultaneously with consumers in all channels such as websites, stores, mobile applications and call centers.
There are good practice examples and teachings that companies can take from online marketplaces when managing their own websites and mobile apps. While determining the strategies, defining the products that create traffic and margin, strengthening the price image and paying attention to the loyalty program are among these. For stores, it is important to define the consumer profiles in the stores and to optimize the product range for different segments by segmenting them according to their needs. Another prominent result of the study is that not only the behavior of consumers but also their budgets have changed significantly due to the COVID-19 outbreak and that there are significant differences between categories. During the pandemic, the highest increase in budgets among categories was seen in household cleaning and hygiene products, followed by food and beverage, hobby, sports and entertainment products, respectively. During the pandemic, the sharpest drop was seen in the fashion and clothing category among all categories. Affected industries need to rethink their business models to achieve pre-pandemic results.
MORE PRICE RESEARCH IS MADE
Another noteworthy issue among the changing consumer behavior is that consumers do more research before purchasing than before. According to the results of the research, it is seen that nine out of 10 customers researched before making a purchase, while seven did the research on online marketplaces.
While consumers become more conscious about the price during the pandemic period, companies need to reconsider their pricing strategies. According to the results of the research, consumers are most sensitive to price with 82 percent. With the rise of e-commerce, shipping costs (14 percent) and delivery timing (11 percent) of products are also among the priorities of consumers. In line with the price sensitivity in the first place in shopping criteria, 77 percent of consumers say they do more price research compared to the pre-Covid-19 time.
23 percent of those who prefer different shopping channels said that they will wait until the product they want to buy is offered for sale at a discounted price, while 16 percent stated that if they find a discount on a different channel, they will buy the same product from that channel. At this point, it is observed that promotional strategies are also very important.
LOYALTY PROGRAM GIVES TRUST
According to the results of the research, we have seen that the failure of brands to offer loyalty programs, which plays an important role in promotional strategies, can lead to customer loss. According to the results we obtained, 43 percent of the consumers said that if they cannot find the product they are looking for, they will choose another brand or shopping channel or postpone their purchase. 15 percent of the consumers who say they will stay in the shopping channel explain their reason for staying as loyalty program membership. This can be considered as a lost opportunity for brands that do not have an effective loyalty program.
Today, free shipping and additional personalized discount rates are the most interesting opportunities for those with and without loyalty program membership within the scope of the loyalty program. When willingness to pay is examined, the three most important opportunities that participants expect to see under the loyalty program for a reasonable payment are free shipping, personalized discounts, and giveaways. Having a point system and being able to buy gift products with the points collected is equally important as offering gift products at least.
In addition, the subscription model seems to be an interesting feature in the eyes of consumers. Especially detergent, toilet paper and paper towel, books and general cleaning products with a long shelf life are the most preferred products within the subscription model. Another model that 70% of the participants find interesting is the "click-and-collect", which can be defined as the model in which online shoppers can pick up the products they order from a specified location free of charge instead of receiving them via cargo. It is observed that these models, which are used quite commonly abroad, began to be implemented in Turkey and the interest in these models increase day by day.
The change is happening quite clearly. Those who adapt to new consumption behaviors during and after the pandemic will continue to grow sustainably. When we consider all these changes, companies need to be closer to their customers than ever before. The product and service optimization that will address the needs of consumer segments and will be managed in multiple channels, the price and promo strategy that supports this and the establishment of a consumer-oriented loyalty structure that will increase brand loyalty can no longer wait.