By now, we can all read the writing on the walls: the rest of 2020 is not going to be a good economic year, and how 2021 will play out is currently anybody’s guess. Global consumer expenditure growth is currently forecast to fall by 4.3% in real terms year-on-year in 2020, down from 2.4% real growth in 2019, according to An Hodgson in Euromonitor International’s “Coronavirus will transform consumer behavior,” published on May 25, 2020. Furthermore, due to job losses and depressed investment income gains, total disposable income is set to decline by 3.7% in real terms in 2020 over 2019’s 2.6% real growth, said Hodgson.
The silver lining, if it can be called that, is that food and non-alcoholic beverages are still slated to record positive spending growth this year. People must still feed themselves and their families, including their pets. But they’re going to be more frugal about it, they’re going to look for different purchasing channels, and they’re going to do a lot more research before giving a company their money.
It’s unrealistic to expect anything to return to pre-virus normalcy any time soon, if ever. Even when the virus recedes, millions of people have still lost their jobs, gotten sick and experienced any number of other stressors while in quarantine/social distancing/self-isolation. Consumers of all stripes are now more concerned with conservative spending, hygiene, and physical and mental health. And as I’ve covered before, odds are more of them will continue shopping online, having gotten used to doing so during the pandemic.
“Brands and businesses successfully emerging out of this pandemic will most likely be those which are prepared for the ‘new normal’ of digital consumer engagement, e-commerce, cashless payment and at-home consumption,” said Hodgson. “Additionally, businesses will be expected to put people and their wellbeing before profits. Successful companies will be those who understand the health and safety concerns that dominate the thinking of their consumers (and employees) and create value by focusing on hygiene, health and wellbeing.”
Globally, there is a lot of room for improvement on those fronts. According to the Edelman Trust Barometer 2020, “Spring update: Trust and the COVID-19 pandemic,” only 47% of those surveyed believe that businesses are “ensuring the products and services that people need most are readily available and easily accessible.” Only 44% believe that businesses are adequately protecting their essential employees who have an increased risk of exposure to COVID-19. Putting people before profits, protecting employees’ financial wellbeing and helping smaller suppliers stay in business are also seen as minority actions by those surveyed.
And yet, people remain hopeful all over the world. According to Edelman, 64% of those surveyed believe that, as awful as the pandemic is, it will “lead to valuable innovations and changes for the better in how we live, work and treat each other as people.” Consumers clearly want to trust the entities they do business with, but you have to give them a reason to do so.
What are you doing to meet your customers’ needs now and for the rest of 2020?
The Edelman Trust Barometer 2020 provides a global scope of current trust in the midst of the pandemic. Among the countries hitting high marks in various aspects of trust: