New brands have found ground in the past few weeks as absence of supply from known brands push customers to try out newer ones.
New brands have found ground in the past few weeks as absence of supply from known brands push customers to try out newer ones. “In last few weeks over 60% of consumers tried new brands largely due to unavailability of regular ones,” consulting firm Kearney said in a report on Monday, adding that lower price options also drove sales for these companies. However, known players are now at risk of losing their customers as these experiment purchases may become permanent conversion. The key is to now ensure that the brands are able to justify or reaffirm the value offered for the pricing charged. This will not only help these companies to retain existing customers but will also help them attract new buyers.
It is expected that there will be a shift in consumer behavior due to coronavirus pandemic and consumers will be less likely to spend more in the weeks to come. While companies were earlier struggling with a demand slowdown, now, there are new issues to be resolved as well with coronavirus lockdown severely affecting supply chains. “The COVID-19 situation will bring significant changes in the industry dynamics both from demand as well as supply standpoint. There will be a significant impact on consumer buying habits — while some trends will continue as before, others will change dramatically,” Himanshu Bajaj, Partner and Head India, Consumer and Retail Practice for Kearney, said.
In general, items related to health and hygiene are expected to gain prominence. The companies will now be required to cater to the rising demand for these products and work towards a strategy to adapt new normal. However, while ensuring that health and hygiene products are made available, companies will also need to make products affordable. “Companies that can position health branded products in the affordable, mild-premium range of 10 to 20% are likely to win in the new normal. More than 60% of consumers say they are willing to pay up to 20% more for healthier products,” the report said. Demand for items such as yogurt, high-protein dairy products, fresh juices, antibacterial personal care products and sterilizers are also expected to grow.