Consumers Turn Away From Premium Products In COVID Crisis
According to a July study from market research firm BCG, consumers have reduced their spending on luxury products, jewellery, clothing, footwear, accessories, and make-up, as well as holidays, travel, and concerts.
Instead, consumers expect to spend more on food, groceries, video games, and other household products, as people spend more time at home.
In Australia, these trends have been reflected in the record spending seen at Bunnings and Kmart, as people focus on home improvements and fitness, as well as JB HI-FI and Harvey Norman, with people spending significantly more on home office and home entertainment supplies.
The BCG survey also found that over 40% of Millennial women planned on spending more online, with 33% over all demographics spending more online during the COVID-19 pandemic. In addition, 9% made their first online purchase during the COVID-19 lockdowns.
The NAB Online Retail Sales Index rose by 50.4% year-on-year in May, following record y-o-y growth of 58.5% in April.
“These habits will evolve as restrictions ease and recovery progresses. Therefore, it’s important for companies to continually analyse the market and their own customer segmentation to ensure they are gaining the right traction online,” Monica Wegner, BCG Managing Director, told the Australian Financial Review.
“International experience shows that companies that make it as easy and convenient as possible for consumers to move online will be best placed to thrive in a post-COVID world.”