The health crisis and the unprecedented disruption caused by COVID-19 have had profound impacts on economies, businesses and consumers worldwide, changing the way consumers live, work and shop. Uncertainty remains high, but what is clear is that economies will not emerge unscathed and the daily routines and lifestyles of consumers will shift to accommodate continued social distancing. Whilst treatment and vaccine options are investigated, and potentially into the longer term, a new normal will emerge, as fears of a pandemic or other destructive events remain palpable. The global economy is forecast to enter its worst recession since the 1930s, hitting every sector from hospitality to education and finance. Businesses are facing huge challenges in navigating through the turbulence, while coping with disrupted supply chains and rapidly changing consumer needs and habits.
Economic and Consumer Landscape
As consumers continue to struggle with the spread of the virus, lockdowns and new daily regimes, they are also affected by rising unemployment and deteriorating earnings. More households are expected to fall into lower-income segments. Overall, a growing anxiety about future prospects is undermining the global consumer sentiment. Yet the massive change brought about by the pandemic also makes consumers re-evaluate their life priorities, giving rise to new values and spending criteria. Many of the behaviour shifts, including a focus on family or community, health and digital solutions, are expected to last a long time, even in the aftermath of the crisis – particularly if the crisis itself endures.
The Impact of COVID-19 on Market Sizes
With the exception of fresh food, packaged food and home care, COVID-19 will have a negative impact on consumer markets.
FROM SUSTAINABILITY TO PURPOSE:
The idea of sustainability evolves beyond the inclusion of ethical credentials and environmental concerns, such as plastic pollution and climate change, to a more holistic approach that aims to create social, environmental and economic value.
HEALTH BEAUTY FASHION: Companies are moving production to the pursuit of the greater good through ethical values and brand positioning. Health, beauty and fashion brands must invest more in locally produced goods now more than ever and concentrate on their brand heritage, transparency, safety and provenance.
FOOD AND NUTRITION: Issues, such as food waste, animal welfare and food security, will be front-lined whilst others, such as packaging sustainability and sustainable sourcing, will lose out.
HOME AND TECHNOLOGY: COVID-19 has both refocused and reclassified what sustainability looks like for home and technology industries. That’s not to say efforts towards cutting energy usage and tackling sea plastic have gone away, more importantly they must now co-exist with the primacy of hygiene and serving consumers during economic hardship.
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