The new report maps out the four phases of market recovery in the new normal and predicts trends by analysing current & past consumer behaviour
Though digitization was already part of the narrative, Covid-19 has accelerated the process of adoption of technology by the businesses. “Now, because of the pandemic, we have digitally jumped ahead by three to four years in the span of two months”, says Kantar’s latest report titled Post-COVID Commerce- A four-phase recovery framework with retailer and brand implications.
According to the said report, pre-COVID, e-commerce was expected to account for 15% of US sales this year, but by the end of April 2020, 25% of all sales came through e-commerce channels marking a jump of 65%. Online grocery shopping has also soared from 3% before COVID-19 to 10%. The in-store traffic has decreased by 48% in April for grocery shopping.
The report also maps out four phases of market recovery post- lockdown. It predicts future trends by analyzing current and past consumer behaviour.
“As we consider what the great retail reawakening might look like, we must think about the new shopping habits and how they will impact retailers and branded manufacturers. From a brand perspective, [Covid-19] shifted the idea of e-commerce from a state of not urgent or slightly urgent to now massively urgent and critical”, said the report.
Phase 1 of Recovery ‘Acute Non- Normal’
We are currently in Phase 1 of recovery, the ‘Acute Non- Normal’ phase, says the report. In this phase, “Shoppers are still focused on sheltering in place with the hope of limited opening state by state. Economic concerns significantly outweigh health concerns, and unrest is occurring in some states and communities.”
Kantar advised brands to build out Omni/ e-commerce capabilities during this time. Brands are also asked to advertise and invest in a cause more. It also asks the brands to prioritize the health of their workers and ensure they have ample stock.
The major trends of this phase are contactless and acceleration of last-mile delivery platforms. According to Kantar, “Direct-to-consumer (DTC) brands and omnichannel leaders will be first in line when the economy returns.”
Phase 2 of Recovery or ‘Semi Normal’
The second, which is termed as ‘Semi Normal’, might start from late summer 2020, to fall 2020, “we will begin to see more states open, especially those that have lower infection rates and successful containment efforts in place”, says the report. According to it, approximately 30% of people will maintain or increase in-store shopping, but it will continue to be more limited to household essentials.
During this time, with masks in place, shoppers will slowly emerge from the shadows, eager to shop and explore, yet still extremely cautious.
The major trends during this time will be ‘Technology-to-consumer’. Drones, robots, click-and-collect, and online-to-offline (O2O) will gain traction. “Some parts of the economy like manufacturing will pick up,” said the report.
Phase 3 of Recovery or ‘New Normal’
The “New Normal”, which will be phase three of the recovery, is predicted to last from Winter of 2020 to Spring of 2021. During this phase, shoppers are predicted to restart shopping, yet cautiously. As per the report, the consumer will reward retailers that offer store safety modifications.
The report states, “Consumers will want brands to talk with more positivity, reassurance, and help with life today.” It also says that e-commerce will continue to accelerate. In-store shopping will begin to accelerate. It further predicts that the thrifty consumer will emerge, seeking to do more with less.
Phase 4 or as ‘Totally Normal’
Kantar called the last phase of recovery as Totally Normal phase. It could start in lasted spring of 2021, to the end of summer in 2020.
According to the report, post-COVID-19 habits and expectations would be ingrained in consumer behaviour by them. Speed, value, and convenience would be the new table-stakes in retail. Cleanliness, health, and safety would be paramount.
Kantar suggests brand messaging should convey new hope, togetherness, and transparency during this time. It also said Brands with higher levels of product safety will be the leaders and, the brands that made a difference during the crisis will remain top of mind. It also said that Click-and-collect will dominate the market, while replacement brands may stay popular.
*It is to be noted that while making the prediction, Kantar is assuming that a vaccine will be soon in the market.