Covid-19 affected shopping habits on safety concerns: Report

The coronavirus pandemic has largely affected shopping habits with safety now taking over as a new criterion over price range, variety and convenience, forcing retailers to adapt to the new reality, according to a report.

The report by KPMG in India and Retailers Association of India (RAI), however, said activities like entertainment, physical shopping and dining out could see a surge in demand with gradual opening up of physical marketplaces, especially with the onset of the festive season, as consumers have been missing the touch of reality for so long.

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"Shopping habits have been largely affected during the pandemic, with safety now taking over as a new criterion over price range, variety and convenience. In India, hypermarkets are witnessing lower footfalls, and most sectors including apparel, accessories and durables have faced a lack of demand," it said.

Essential category players are also facing challenges, albeit of a different kind — managing huge spikes in demand, ensuring liquidity, modifying and managing store operations to maintain safety standards, managing employee health and grappling with a shortage of staff, the report 'New Retail Reality' added.

In terms of buying behaviour, KPMG and RAI said, "We also expect consumers to continue buying via e-commerce than physical stores. Retailers then should be in the position to adapt and make strategic collaborations in order to leverage mutually beneficial situations."

Focus should shift on converting existing businesses to delivery-oriented ones, with utmost care for safety precautions. Tying up with delivery and logistics service providers in order to provide direct-to-home services for customers is already on the rise and could further gain more traction, it added.

"While several are optimistic about the future returning to a state of normalcy, it is quite evident that consumer mindsets have changed drastically. It is safe to say that pre-Covid-19 behaviour might not be the best way to survive post-Covid-19," the report said.

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A chunk of organisations has been proactively responding to the current changes even though the future picture seems hazy. Presently, the optimal solution is avid preparation and responsiveness for the near future and the post-Covid-19 world, it added.

However, the report pointed out that "going forward, we believe that entertainment, physical shopping, dining out etc could see a surge in demand with gradual opening up of physical marketplaces — especially given the onset of the festival season."

People would be drawn more towards physical stores as they would have been missing the touch of reality for so long. So, experience would become an integral part of shopping, it added.

Commenting on the findings of the report, KPMG in India Partner and Head, Consumer Markets and Internet Business, Harsha Razdan said, "The unchartered waters of Covid-19 has meant a gradual change in consumer behaviour. With new models of working and shopping evolving, physical and online channels too are undergoing makeovers."

State-wise total number of confirmed cases, deaths

There is an increasing thrust on localisation as the new standard. With rising consumer expectations, order fulfilment is becoming increasingly important for retailers to adhere to. To provide a seamless customer journey, it is important to be available across physical and digital touchpoints offering the right choices to consumers, Razdan added.

"Our view is that retailers across the world, especially the brick and mortar ones will have to borrow best practices from each other and get back up on their feet. Since there is an uncertainty that continues with this crisis, innovation and adaptation are key. With the advent of a strong digital wave, it will be important for companies to adapt to the situation quickly and continue to innovate keeping consumers at the centre of their plans," Razdan said.

RAI CEO Kumar Rajagopalan said in the wake of the pandemic retailers are relooking at their product mix and the way in which they do their businesses.

"Even neighbourhood retailers are stepping up their game by augmenting their digital capabilities to optimise every prospective opportunity to their benefit. They always had the trust factor going for them and are now also adding convenience to their arsenal," he said.

The neighbourhood retailers are now creating their own web stores and taking orders by marketing their products through various digital channels such as Facebook and WhatsApp, Rajagopalan said.

"The pandemic has pushed retailers to think out of the box and accelerate tech adoption. We see this trend continuing, making retail more interesting and consumer-focused," he added.

The report said though no one knows for certain what concrete impact this crisis will have on business the world over, one thing is for certain — innovation and adaptation is key.

"No matter what unseen catastrophe retailers are going through, the businesses and business owners need to be flexible and agile enough to incorporate changes in their behaviour, operations and management, in order to evolve for the better," it said.