—COVID isn’t changing consumer behaviour so much as accelerating underlying trends, says Crop president Alain Giguere. In this special column for The Message, he makes five consumer predictions for the year ahead—
Every year around this time, predictions for the year ahead pop up. And while a certain amount of caution is always de rigueur when prognosticating, that is even truer this year.
The psychology of Canadian consumers has been greatly affected by the pandemic, and it seems very likely that we’ll be dealing with its aftermath for much of 2021—until a vaccine produces enough herd immunity to support the lifting of restrictions on economic activity.
But many of the consumer behaviours and trends that have been displayed this year had already begun to appear in 2019. COVID-19 has merely accelerated what was already underway. That is why we feel able to predict with some confidence what is likely to distinguish the consumer trends in 2021.
#1 Reduced, cautious, sensible and targeted consumption
We are witnessing the reversal in the exceptional rise of a consumer culture that has surged in recent years, peaking in 2018. Starting in 2019, this trend began to reverse, and the arrival of COVID-19 in 2020 only accelerated its reversal.
For example, the proportion of Canadian consumers who want to be continuously informed about the newest products on the market rose from 28% in 2009 to 51% in 2018, before falling to 44% in 2020.
Consumers who enjoy advertising as a buying stimulus rose from 25% in 2008 to 36% in 2018, dropping to 30% in 2020, while those who totally trust advertising rose from 12% in 2012 to 33% in 2018, dropping to 25% in 2020.
Those willing to pay more for value-added products went up from 25% in 2012 to 63% in 2017, then down to 58% in 2020. Finally, people for whom shopping is one of life’s great pleasures rose from 39% to 53% between 2012 and 2018, and has remained unchanged ever since.
Most of our consumption indicators follow the same trajectory, the same variations (up and down), but with different start and reversal dates. To synthesize the trajectories of these trends over time, we have created a Consumption Enthusiasm Index, a kind of enthusiasm weighted average (a “factor”) of most of our indicators. This index indicates the proportion of consumers who display great enthusiasm for consumption at any given point of time.
The graph shows the dramatic rise in this consumer culture from 2015 to 2018, but also the reversal in this trend since 2019, which has continued with the pandemic.
Since the consumption craze was already beginning to wane in favour of greater caution and rationality (less impulse buying) even before COVID-19, we can assume that any prolongation of the economic conditions caused by the pandemic into 2021 will encourage consumers to remain very cautious in their purchasing behaviour.
In 2021… Consumers will be very critical and cautious, driven by strict risk management in all areas of their lives. Their consumption will be more utilitarian and functional, along with a strong demand for quality that guarantees unconditional durability. Prudence will prevail. They won’t want to take chances. In the end, people will still shop, but in a critical, careful and pragmatic way. Consumers will prioritize their purchases based on what they find most pressing or most rewarding.
#2 Slower adoption of innovation
Consumers will also apply the brakes to their adoption of innovation, brakes that had already begun to appear in 2019 and that have been intensified by the pandemic.
Consumerism has been fuelled by innovation. The adoption of innovation was led by innovators and champions who acted as market influencers. One of our indicators of the vitality of the spread of innovation adoption is the response to the following statement, which very broadly estimates the extent of early adoption in the traditional literature on the subject.
We can clearly see that innovation adoption began running out of steam in 2019. It is obvious that the diffusion of innovation to a wider share of the market will be more difficult in 2021.
In 2021… Consumers will tend to buy technology that is proven and that has a reputation for durability. People will be wary of innovation. Consumers will wait until a product has passed the test of time. The consequences of the pandemic, which will continue to be felt in the coming year, will reinforce this cautious attitude towards innovation.
#3 The rise in “buy local”
It is interesting to note that consumer interest in local products was already on the rise before the current pandemic. In fact, underlying the rise in a desire for brand authenticity is a desire to share the passion of their local producers—their founding myth, or the original idea that led to the product.
Buying local has been on the rise since 2014 (and is highest in Québec, at 31% in 2020). Curiously, the pandemic has not really had much of an effect on this trend, even if buying local has become very important to more than one in four Canadian consumers (27%) in 2020.
In 2021… More aggressive marketing of local products combined with a growing desire for authenticity should encourage more local buying in 2021.
#4 Return to the store
There has been a lot of buzz in specialized media in recent months that e-commerce has taken an irreversible place in consumer preferences. According to most analysts, after the COVID-19 crisis is over, it will be very difficult to lure consumers back into brick-and-mortar stores. Apparently, consumers have developed a taste for online shopping, and there’s no going back.
However, our data indicates quite the opposite. Consumers have become accustomed to shopping online because they have been forced to do so. Of course, it will always be easy to shop online from the comfort of home. But once community immunity has eliminated the threat of contracting COVID-19, consumers will flock back to physical stores.
The graph shows the sharp rise in the preference for in-store shopping (this data was collected in May/June, after the first months of lockdown). People still want to touch, feel, browse and explore. A balance will undoubtedly be struck between these two types of retail.
In 2021… We expect to see a resurgence of in-store retail, especially after the expected spread of vaccine-created immunity. But to support this return, stores will have to transform themselves into destinations for unique experiences.
#5 Social responsibility on the part of brands and companies
Another hot topic is the commitment of brands to social and ecological causes. Many Canadians feel they have no power to make a difference to the social and ecological problems confronting society.
However, they are convinced that brands, corporations and institutions do have the means to make a difference, and therefore expect them to engage and invest in doing the right thing. Social responsibility has become—and will increasingly become—a purchasing criterion, as illustrated in the following graph.
On the other hand, the priorities are still up for debate. The causes where a real difference can be made need to be identified to win the support of consumers (citizens).
Helping people cope with the consequences of the pandemic should be the number one priority in the short to medium term. However, saving the planet will soon become the main issue for everyone. The following graph illustrates this.
In 2021… Brands should differentiate themselves as agents of social and ecological change. Those who invest appropriately will have a competitive advantage in the marketplace.
