Accenture: COVID-19 likely to usher in ‘decade of the home’
Home and local experiences taken on increased importance amid the COVID-19 pandemic and retailers and consumer goods companies must tailor their products and services accordingly.
That’s according to findings of a recent global survey of more than 8,800 people from Accenture in which 56% of consumers said that the pandemic has caused them to shop in closer neighborhood stores, with 79% of those respondents saying they plan to continue to do so long-term. (Findings of the survey are presented in two Accenture reports, one for the consumer goods industry and one for the retail industry.)
In addition, 56% of consumers said they’re buying more locally sourced products, with 84% saying they plan to continue to do so long-term.
More than half (54%) of consumers said they are shopping more cost-consciously and are likely to continue doing so — with consumers overall far more likely to have increased purchases of mid-range and budget brands and reduced purchases of premium brands since the pandemic began, according to the survey
The report also found that continuing discomfort with public spaces and travel, coupled with growing financial fears amid widespread decline in household income, will continue to keep people mostly at home. Sixty-nine percent of respondents expect to do most of their socializing during the next six months either in their home, a friend’s home or virtually.
“Home is now the new frontier — it’s become the workplace, the schoolroom, the place to try new hobbies, the place to socialize and a safe sanctuary — so companies must account for this reality,” said Oliver Wright, managing director and head of Accenture’s global consumer goods practice. “They’ll need to think beyond traditional tactics and be more creative, providing premium or virtual experiences and tailoring their portfolios to engage consumers.”
In other key findings:
• 53% of people who never worked from home previously now plan to work from home more often in the future;
• 50% of respondents cited financial security as one of their top three concerns over the next six months;
• 12% of consumers said they have increased premium purchases, with 57% of those falling outside the high-income bracket.
The report notes that some brands are reaping the rewards of adjusting their services to meet the shift in consumer demands by, for example, launching a new shopping experience to connect U.S. consumers with local businesses by allowing them to shop by region and by state. But it cautions that taking advantage of these opportunities will require ongoing and careful analysis to anticipate which of these new consumer behaviors will stick and then adapting their portfolios and financial models accordingly.
“Companies must boost their analytics capabilities to understand the pandemic’s impact on their businesses at a local level — tracking its effect on local businesses and employment and people’s level of comfort in returning to pre-COVID activities,” said Jill Standish, senior managing director at Accenture and head of its retail practice globally. “In addition to making consumers comfortable re-engaging outside the home through strict health and safety measures, retailers should carefully assess their physical assets — i.e., which stores to keep open and what inventory to stock, taking into account, for example, whether and when schools reopen. They might also experiment with temporary spaces, such as pop-ups in local communities.”
The latest research supports Accenture’s previous findings that the changes in consumer behavior, such as the dramatic rise in e-commerce since the start of the pandemic, are likely to remain or accelerate further. For instance, the proportion of online purchases by infrequent e-commerce users — i.e., those who used online channels for less than 25% of purchases prior to the outbreak — has increased 170% since the outbreak.
Further, the survey found that consumers who have increased usage of digitally enabled services (e.g., contactless payment, in-app ordering and curbside pickup) and have turned to digital customer service channels (e.g., website or mobile app, mobile messaging with a virtual agent, or online chat with a chatbot) expect to sustain an increased level of usage.