Restrictions due to the pandemic, loss of purchasing power and the search for new online shopping channels and promotions will determine the market in 2021, according to data from NielsenIQ.
The purchase of food and household staples did not stop in 2020 despite the restrictions imposed by the pandemic. On the contrary, the consumer focused on making more planned purchases, increasing the inventory of non-perishable products and prioritizing the acquisition of healthy items, cleaning, home and personal hygiene.
In addition, it tested new brands and shopping methods such as home ordering and online commerce. But that was not all. There are more changes in purchasing habits that will be decisive in driving demand for goods and services by 2021, says Annie Muñoz, director of category management and training at NielsenIQ for Latin America.
Consumer goods retailers and manufacturers also had to quickly adapt to supply chain challenges, government regulations, and changing consumer priorities.
In the supermarket channel, there was an increase in the volume of units sold by 16% between December 2019 and November 2020, while the value of the purchase rose 12%, driven by basic foods or groceries, dairy products and cleaning.
While the consumption of alcoholic beverages lost weight in the purchase due to quarantine restrictions and dry law.
This this year, consumption will be impacted by the economic slowdown, the closure of companies, the increase in unemployment or the reduction of income and mobility still limited by the permanence of the virus.
The success of the consumer goods industry will depend on how stores and manufacturers address the behavior and changes in the market landscape, taking advantage of key stores, strategic locations and e-commerce, in addition to efficient assortment and promotions. optimal.
Attention: the pandemic generated new consumer habits
The NielsenIQ expert warns that a high percentage of businesses fail due to not knowing in depth the needs of consumers. Hence it lists some changes:
1. Home consumption:
The closure of restaurants and mobility restrictions due to confinement led to an increase in consumption at home. The food, beverage and perishables product categories grew considerably. "The need for consumption at home will continue in the first half of 2021, so companies must take actions to gain ground at the point of sale."
Muñoz recommends ensuring the assortment and availability of products. Likewise, adapt the inventory according to consumer behavior.
Manufacturers and retailers must work together to focus on consumer goods and drive store flow, cart size, profits, market share and loyalty.
2. The new consumer:
With the economic outlook and a decimated income consumer, Muñoz indicates that merchants must be empathetic.
The pandemic has given rise to two buyers: the restricted (those economically affected by the pandemic) and the protected (those who did not experience financial impact). These two groups have different priorities and purchasing behaviors, and each is inclined to different types of products.
Due to health and safety concerns, both groups shop in physical stores less frequently, and when they do, they are more prepared and spend less time on site. Although they make fewer trips, they buy more products each trip to meet their needs and avoid going out to protect themselves.
It suggests that manufacturers properly choose the products that will occupy places on the shelves. For restricted consumers, they have to look for alternatives of cheap products and accessible sizes; for protected buyers, introduce family-size packages and containers that have good value for money.
3. New stores:
Store closures and travel restrictions led consumers to visit stores they had never shopped at. Additionally, we saw stores that to survive had to adjust their portfolio by adding high demand product lines, as well as new categories that are now part of their regular assortment.
Globally, consumers who bought in a store where they had not been before increased from 39% in May 2020 to 45% in September 2020.
Muñoz recommends that companies identify stores in key areas, adjust distribution and sales strategies with respect to their formats and the demands of consumers.
The businesses must review their real estate strategy based on new places of purchase and biosecurity measures.
4. E-commerce strategy:
Beyond having an online platform, the key is to understand that the consumer who buys in the physical store also buys on the technological platform.
The way they buy changes between both channels and the consumer is no longer stimulated only by promotions and price in e-commerce.
To win in the online store they need to define a clear strategy that includes the efficient delivery of the products. The alliance with delivery companies is key.
Merchants must ask themselves if beyond the correct price and promotions, they have a platform that makes it easier for the consumer to buy. If they find what they are looking for and if they are buying it. Also, analyze if you return to the platform and if you recommend the shopping experience on social networks. They must analyze how to reward online consumer loyalty.
NielsenIQ's category director indicates that as the first doses of the Covid
are administered and the effects of the pandemic diminish, the question remains whether businesses and manufacturers will be agile enough to respond to changes in consumer priorities. Understanding customer needs and adapting will be vital.