Consumer behaviour in India is radically changing due to COVID-19 with 60 per cent of buyers in the country believing that the pandemic would alter the way they shop, an EY survey said on Wednesday.
According to the EY Future Consumer Index, five new segments may emerge as consumers move beyond the pandemic -- back with a bang (constituting 38 per cent of respondents), stay frugal (29 per cent), keep cutting (19 per cent), cautiously extravagant (11 per cent) and get to normal (2 per cent).
The 'back with a bang' group is expected to spend much more in all categories, while 'stay frugal' will spend slightly less.
The 'keep cutting' segment will make deep spending cuts, whereas the 'cautiously extravagant' section is willing to pay a premium for certain products and spending in 'get to normal' group will be largely unchanged, the survey noted.
According to Pinakiranjan Mishra, Partner and National Leader, Consumer Products and Retail, at EY India, companies must formulate strategies immediately to address the challenges.
Firms should incorporate permanent safety measures in offices and on shop floors, re-evaluate brand portfolio, expand relationships with third-party e-commerce platforms, and "most importantly, anticipate and be ready to respond to newer habits that consumers will develop after living through the pandemic," Mishra said.
Given the anticipated changes in consumer behaviour and category dynamics, the report highlights that consumer product companies would need to take quick actions to respond to the 'now' phase, alter operating model to address the 'next' phase and then consider strategic transformations to build a resilient organisation for the 'beyond' phase.
"As consumer product companies move into the 'next' and 'beyond' phase, their ability to digitally transform faster, invest in relevant technologies such as artificial intelligence, optimise the use of big data and analytics and improving overall customer experience will be the key differentiators in the industry, which will, in turn, enhance their resilience to withstand any future disruption," Mishra added.
As a part of EY Future Consumer Index, 1,046 Indian consumers were surveyed, mostly in urban areas. The survey questionnaire covered current behaviors, sentiment, and intent.