The pandemic has forced people to rapidly change their lives. With increased anxiety, the sensitivity towards everything grew. Self-isolation and precautions caused a substantial shift in consumer behavior. Understanding the nature of these changes is crucial for companies’ strategy building, as understanding consumer values is a factor that can make or break a business during these times. The article introduces newly emerged consumer behavioral patterns and the main factors that trigger them.
Authors: Ekaterina Tsvetkova & Marja Viljanen
Factors that shape consumer behavior
Four groups of factors are commonly differentiated between everything that influences the consumer behavior of a person. These groups have the strongest impact and are presented in the figure below. (Kotler et al. 2010, 256 – 275.)
Figure 1. Factors that influence consumer behavior (Kotler et al. 2010, 256 – 275)
There is no hierarchy to these influences, the strength of their impact is purely individual and varies with every person. The changes in consumer behavior appear when a shift happens in one of these influencing matters. The pandemic affected nearly every one of them. It’s possible to state that the virus didn’t cause a change in the age, culture, and subculture of individuals. Yet almost every area of life could have been transformed.
The pandemic-related crisis caused massive layoffs and unpaid leaves, then rushed the population to self-isolate. The change in social setting interfered with every social aspect that is important for consumer behavior trends. The heavy pressure of the situation caused anxiety and affected psychological properties. Pandemic has caused people to lose certain needs and develop new ones. (Ruiz et al. 2021.)
Following masses: the herd mentality
Herd mentality describes an urge to act in the same way as people around you, even if it opposes your own mentality. After Professor Jens Krause and Dr. John Dyer held an experiment in 2008, they reached the conclusion that it takes only 5% of the crowd to influence the rest. (University of Leeds 2008.) The pandemic caused a spike of stress and fear among people. Large amounts of information caused an inability to make informed decisions. People relied on actions of the society around them. As the panic grew, the self-awareness faded, and herd mentality gained power over people.
The reason people fall into a pattern of following others often lies in a concern of missing out on something. When a group of people is acting the same way, people wonder why. In an attempt to create a logical explanation, a person decides that they should follow their example, as they might gain some kind of advantage out of it. And they are concerned to suffer damages in case they don’t follow the lead and end up making a mistake.
Prioritization of basic needs
The pandemic has brought populations’ attention to their safety and ability to cover basic biological needs. As the priorities changed, consumer behavior changed as well. In the process of adaptation to the new economic environment, the population introduced a cautious approach to consuming goods until it was possible to ensure stability. In the period of the pandemic when the world was in its most chaotic state, most of large purchases were either postponed or canceled. (Sheth 2020.) Coming out of the crisis, people may keep a cautious mindset towards their consumption because their values had changed.
COVID related changes in Finnish consumer behavior
Thesis research was performed on a sample of 350 Finnish Bachelor students of LAB University. The survey gathered information about respondents’ consumer values before and during the pandemic and market areas they changed their consumer behavior in. (Tsvetkova 2021.) In the spring of 2020, 21% of Finnish population stated that they have largely increased their use of online services. Online presence had grown, being the main connection to the world. Many increased their spending on gourmet products, trying to introduce creativity into their cooking. Overall spending on food increased. Not being able to visit restaurants, people raised their grocery consumption to cook at home. Food delivery services experienced higher demand as well. (De La Calle 2020, 22.)
Consumers no longer had a need for new clothing and cosmetics. Although online shopping became a coping mechanism for some people struggling mentally, the percentage of those interested in purchasing clothing dropped by 17% in March and April. Cosmetics industry’s sales decreased, but the biggest drop happened in makeup sales. (Tsvetkova 2020.) With no need to meet other people and remote work consumers lacked the need for makeup.
Another notable change is that during the pandemic consumers’ appreciation for brands’ values grew tremendously. Consumers are more willing to purchase from brands that are showing care for the community. (Arzhanova et al. 2020.) Finnish breweries that started to produce hand sanitizer during shortages in the beginning of the pandemic were highly appreciated by the community. This move has helped them to gain customer loyalty and served as an attraction for new consumers.
Pandemic-induced behavioral patterns
According to EY Future Consumer Index, four new behavioral patterns emerged during the pandemic. The consulting company called them “save and stockpile”, “cut deep”, “stay calm, carry on”, and “hibernate and spend”. The patterns and their main characteristics are presented in the figure below.
Figure 2. EY Future Consumer Index: Four consumer segments that have emerged during the COVID-19 crisis (Rogers & Cosgrove 2020)
It is hard to predict future changes, but it’s assumed that the groups will not remain as time goes on. According to research, they will transform into new five categories. Many people hope to go back to “normal”. They expect that their spending will stay at the same level as before, and their lives will not change. They do expect to partially change their ways and means of shopping. Some will adopt a “cautiously extravagant approach”: being optimistic yet still focus on health. They expect to spend more coming out of the crisis, as they intend to purchase more non-essential items. Many say that their way to shop has changed for good, as well as the items they purchase. (Rogers & Cosgrove 2020.)
The pandemic developed quickly, forcing consumer behavior to change simultaneously. Understanding these changes is important for companies. Customers have changed their expectations and attitude towards companies because their needs and values shifted. Adjusting company’s strategies and market presence may be crucial to keep a business working and growing.
Kotler, P., Armstrong, G., Saunders, J. & Wong, V. 2010. Principles of Marketing. Fourth European Edition. Harlow, England: Pearson Education Limited.
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Tsvetkova, E. 2021. The impact of COVID-19 on consumer behavior: Finnish students. Bachelor´s thesis. LAB University of Applied Sciences, Faculty of Business and Hospitality Management. Lahti. [Cited 12 May 2021]. Available at: http://urn.fi/URN:NBN:fi:amk-202105118352
University of Leeds. 2008. Sheep in human clothing – scientists reveal our flock mentality. [Cited 8 May 2021]. Available at: https://www.leeds.ac.uk/news/article/397/sheep_in_human_clothing__scientists_reveal_our_flock_mentality
Ekaterina Tsvetkova graduated from the Faculty of Business and Hospitality Management at the LAB University of Applied Sciences and receives a BBA degree in International Business on 18 June 2021.
Marja Viljanen is a senior lecturer at the Faculty of Business and Hospitality Management at the LAB University of Applied Sciences.
Illustration: https://pxhere.com/fi/photo/13864 (CC0)
Reference to this article
Tsvetkova, E. & Viljanen, M. 2021. Pandemic effect on consumer behavior – what changed? LAB Pro. [Cited and date of citation]. Available at: https://www.labopen.fi/en/lab-pro/pandemic-effect-on-consumer-behavior-what-changed/