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Awareness when it comes to shopping, strengthening of a “do-it-yourself” culture and a life more at home. These are some of the behavioral trends that have grown in the daily lives of Brazilians during the new coronavirus pandemic. And they should last.
With an eye on these changes, McKinsey & Company consultants bet that the new habits caused by social isolation are deeper than they seem.
According to the Consumer Briefing: evolving behaviors during COVID crisis (Consumer Information: evolving behaviors during the covid crisis, in free translation), there is a change of “mindset” that will sustain the new behaviors. According to the research, new values are beginning to emerge.
These new principles have to do with more planning and realism, conscious consumption and valuing the environment and social welfare. All of this is going through a strong digitalization.
Based on these new beliefs, the consultancy pointed out the paths that should guide how people live and consume.
With the pandemic of the new coronavirus, e-commerce has grown and visits to supermarkets have decreased. However, the average ticket of what is spent increased, according to the survey, which indicates the return of an old habit of Brazilians: the purchase of the month.
When it comes time to leave home to buy, hygiene has been a strong concern for people. In addition, Brazilians are experimenting with new brands and consumed with more purpose.
The consumer is less faithful because a “loyalty shock” is underway, caused mainly by the search for better cost-benefit when buying.
For McKinsey & Company, the loyalty shock is an opportunity for brands to value loyal consumers, showing the reasons why they should buy their product. In the case of new brands, the opportunity lies in capturing that less loyal consumer with promotions.
These new habits reflect what happens in the population’s pocket. Once considered an optimistic people, Brazilians are less confident about the country’s economy as the pandemic remains. Market projections point to a drop in Brazil’s GDP in 2020 of more than 6%.
Between 21 and 24 March, 25 percent of Brazilians thought the country’s economy would recover in two or three months after the pandemic.
McKinsey’s latest survey shows that, at the end of May, that percentage fell to 16%.
With the pessimistic feeling, the care with finances is growing. According to the consultancy, this is one of the major highlights in the country’s changing mindset. 81% believe they should be careful with money, taking into account the moment of the pandemic.
This is also a change in the country’s paradigm, which is generally known for its poor financial education and high level of default. In May, family default reached its highest point in the historical series, according to the National Confederation of Commerce.
All this should also lead to less consumerism. According to the survey, 75% of people are rethinking their purchasing habits and their need for new acquisitions. As a result, there is a change in purchasing time. People analyze more and ponder, characteristics that were already perceived in generations of young people, such as Z (born between 1997 and 2012).
“The main behaviors that we already observed in the Z generation are to consume in a more analytical way. Think about whether you need consumption. Is it renting, borrowing? It is consumption with purpose. And this is going to the other generations”. Fernanda Hoefel, partner at McKinsey
For 65%, the pandemic has prevented new purchases and investments that would otherwise have been made.
The influences of the Z generation go beyond more purchasing awareness. Another behavior that has arisen due to the difficulties in the budget is reuse, a common practice within the younger generation. According to the survey, 41% of people agreed that they are repairing their fashion pieces more than before.
This scenario should strengthen new business models, such as the so-called “uberization” of the economy, or shared economy. To be able to sell, brands will also need to clearly communicate why a product costs a certain amount.
On a less concrete level than shopping, the changes show an appreciation of welfare and a “slowdown” in the pace of our lives, with changes even in what is expected of our homes.
Since the beginning of the pandemic, the casual has become the new normal, with the comfort of clothes gaining relevance for people. In other words, the sweatshirt has gained from jeans.
These values, according to the consultancy, are also noticeable in the Z generation.
“This generation is stuck in homes with their parents, is ‘educating the parents’. There is also a difference that this generation is more of a dialogue, unlike the millennial generation, which was a generation of rupture and confrontation,” says Tracy Francis, leader of McKinsey’s Retail Practices and Consumer Goods in Central and South America.
When asked what are the most important factors when buying a brand’s product, people responded that comfort comes second only to the style of the piece.
With social isolation stimulated to avoid further contamination by the virus, homes have also gained new meaning and importance. With the growth of interest in doing things inside them, outside activities should not “come back with everything”.
Even in a post-Pandemic scenario, not many Brazilians believe their interest in going out to dinner will increase. About 25% predict that they will go out more, but 26% see that their interest in eating at a restaurant should even drop.
This, according to the survey, shows that homes are beginning to gain a more central role in the routines.
“Before, the house was like a warehouse. We spent little time in it. Now it’s where we sleep, work, have fun.” Fernanda Hoefel, partner at McKinsey…
Among the strongest habits in the routine within the pandemic are the consumption of video content, cooking and taking more care of the home.
Changes in how people view homes should impact even the architecture, according to the research. The office should begin to be part of most plants and products such as scented candles and designed to make the home more comfortable will gain strength.
The pandemic should also begin to generate changes in urbanism. With big cities leading the way in cases of coronavirus infections, a sense of valuing a quiet life also seems to emerge. In the pandemic, medium-sized cities have gained appeal.
In Brazil, 50% of people have chosen to spend their days in the pandemic away from the big cities, which is facilitated by the implementation of distance working and technology. The São Paulo capital, for example, with its 12.1 million inhabitants, is the place with the most cases in the country. Until this Thursday, more than 100,000 people were infected.
According to Tracy Francis, this movement was already happening in the United States and can now be seen in Brazil. More “sustainable” lives and away from large urban centers have gained more appeal.
The combination of factors such as the cheaper cost of living, employers that allow home-office and flexible journey should make Brazilians more interested in medium-sized cities. “This, however, will not happen in a homegeneous way. The interior of São Paulo, for example, has an infrastructure that doesn’t have other regions of the country,” Fernanda Hoefel explains.
The possible implications of the research are a strengthening of business opportunities in the countryside and a decline in the appeal of large shopping centers, such as malls.
All these changes in behavior and ways of buying from Brazilians are crossed by a strong process of digitalization of services, with emphasis on internet banking. Many of them depend on internet connection, such as the consolidation of remote work.
In some activities, such as watching streaming, and using the internet for education, Brazil gains from China and the United States, as shown in the graph below.
With more time indoors, e-commerce should grow more, which should lead physical stores to rethink the shopping experience.
As an implication of digital acceleration, investments should be strong in the user experience and in digital media. About 80% of people who used digital channels for the first time during the pandemic were satisfied.
“If you start doing online banking, shopping, it changes you as a consumer. In Brazil, I had a barrier to pay online. There was the need to be bankrupted and the distrust. This notion of how to pay is ‘jumping’ and comes from having a smoother progression. Consumers are opening up,” explains Tracy.
Whether it’s shopping time or lifestyle, the pandemic has accelerated the digitalization of Brazilians’ lives and created new principles. Now, conscious consumption, financial planning and the appreciation of well-being in daily life mark the new behaviors.
On Thursday, the country reached around 960,000 cases of the new coronavirus and 46,000 deaths, but cities like Rio de Janeiro and São Paulo are already betting on the relaxation of quarantine and the return of people to the streets and stores. It’s worth noting if they are really different when it comes to consumption – and living.
Author: Victor Sena Source Exame[shareaholic app="share_buttons" id="18827503"]