You know you are a pandemic adult when you get excited about stocking up on essentials! 

Well, jokes aside, the COVID-19 pandemic did change a lot of things for brands and consumers. And you can’t help but agree that pre-2023 and 2023 consumer behavior paint two contrasting pictures.

The question is: What’s here to stay and what’s not? 

Let’s decode this with StartInc! 

Pre-2023: A Recap of Shifting Consumer Behavior

As the pandemic settled in and the lockdowns were announced, one after the other, consumer’s psyche saw a significant shift. Along with the psyche, their incomes took a hit, too! As a result, the following 2 things were seen:

• A sudden shift in consumer spending models from “indulgence” in luxury goods to “hoarding” of essential items
• An increase in the use of online platforms and digital platforms for shopping for necessities

Consumers saw hoarding as a way to gain some control of their environment and a way to feel more prepared for uncertain times. They reduced their spending on fashion, jewelry, electronics, and travel and increased their spending on groceries and other food items.

Furthermore, consumer behavior changed from the need to feel, touch, and taste to buy to safety and hygiene. This led to consumers shifting to online platforms and shopping for their basic needs online. As a result, digital payments became more prominent, as even retail stores started accepting online transfers.

2023: Unveiling the ‘New Normal’

Once the lockdowns were raised and the Indian consumers adjusted to their lives, they didn’t go back to normalcy. Instead, they adjusted to what we call today the ‘New Normal.’ And this new normal can be characterized briefly in 3 points. Here’s a quick rundown!

1. Change in Values and Preferences

71% of individuals surveyed in India emerged from the pandemic with a transformed perspective on their behaviors and consumer values. This transformative period led them to reassess their priorities in life. Result? They are placing a greater emphasis on their personal purpose. 

The study also found 5 factors that are driving the Indian consumer’s purchase decision. These are:

• Health and Safety
• Service and personal care
• Ease and convenience
• Product Origin
• Trust and reputation

Initially, these factors were only popular amongst Gen Z and Millenials, but today, they’re applicable to all consumer demographics.

2. Focus on Necessities and Savings 

People are being more careful with their money and only buying the things they need. They are also saving for accidents and medical needs. But they also save up for little indulgences and little pleasures. This correctly hints at the fact that discretionary spending on shopping, entertainment, travel, and social gatherings has risen. 

These changes are both a problem and a chance for brands to meet the growing need for higher-quality goods that meet changing customer wants. 

So, what are some markets that have the chance to attract more consumers and mint money? Organic goods, supplements, exercise gear, home care products, and wellness brands that support overall health.

3. Enjoyment Everywhere Mindset

According to Mintel, Indian consumers are also on a search for happiness post-pandemic. Nearly two-fifths of individuals aged 35-44 are allocating more funds towards vacations/holidays than they did before COVID-19. This is a clear signal of a demand for enjoyable experiences.

This shift presents opportunities for brands to provide affordable indulgences, such as home spa products, staycation packages, and similar offerings that bring affordable joy to people’s lives. 

Irreversible Shifts: Identifying Trends Beyond Return to Normalcy

So much has happened so far. Of course, some changes in consumer behavior will be irreversible in the sense that these shifts characterize the key trends of the new normal. Wondering what they are? Read ahead! 

1. Digital Transformation and E-commerce Dominance

There’s absolutely no going back from digital payments and shopping online. Despite consumers coming back to brick-and-mortar, a significant percentage still loves to shop online for obvious reasons – convenience and options. UPI and e-wallets are of great importance as consumers today prefer contactless, quick payment. 

According to McKinsey’s insight, more than 75% of consumers prefer digital or omnichannel methods when making purchases across various categories. Social media remains a significant influence in the shopping journey. What’s surprising is the emergence of social commerce, wherein consumers use social media platforms like Facebook and Instagram for shopping. In fact, the number of online shoppers continues to grow. 

No wonder upcoming and leading beauty brands make themselves available on Nykaa, fashion brands on platforms like Ajio and Myntra, and their own websites.

2. Personalization and Customer Experience

Do you know the number of shoppers who expect brands to understand their needs? A whopping 73%. And the percentage of shoppers who get frustrated when companies fail to offer personalized experiences? 76%!

Consumers want to feel acknowledged and served exactly what they need. And personalization makes this possible. It’s as if the brand is conveying, “Hey! I know what you need, and I am here to give it to you.” This is what leads to the consumers feeling positive about your brand and building loyalty. 

For instance, something as simple as “Build Your Own Box” experiences from beauty brands like Forest Essentials or personalized skin and hair care from SkinKraft. 

3. Sustainability and Ethical Consumption

Post-pandemic, consumers have become more mindful of what they’re consuming, right from what it includes to where it is sourced from and how it is made. In fact, consumers link going green with positive emotions, especially when the action is personally meaningful.

As a result, several brands have made a significant shift. For instance, the rising coffee chain Blue Tokai changed its coffee pouches from Brown Kraft packaging to 100% reusable LDPE (low-density polyethylene) pouches. Or the latest skincare brand, Hyphen, led by Kriti Sanon, which is PETA-certified, 100% vegan, and has zero plastic footprint. 

4. Buying from Local and Regional Brands

Besides sustainability and ethical considerations, another factor that drives consumer behavior today is how closely brands work with communities and help them. Mintel’s 2021 report, India Attitudes Towards Localism Market Report 2021, suggests that there is a rising interest in buying local after the pandemic. 

As a result, there is an increase in “Made in India” labels. For instance, the Indian coffee brand SLAY Coffee witnessed consistent growth through the pandemic. Furthermore, Indian labels like the Loom, Dot & Key, Verandah, and their likes have become increasingly popular.

5. Health and Wellness As a Priority

The pandemic has been a real eye-opener about the importance of a healthy self. In fact, preventive health and holistic well-being top the charts. Consequently, the awareness of healthy food alternatives, gyms, personalized nutrition, and dietary supplements has increased. 

The consistent growth in these markets with specific gaps presents excellent opportunities for organic goods, supplements, nutrition, and well-being brands to meet unmet needs. Think of brands like Oziva, Be Body Wise and Organic India. 

Furthermore, brands that deal in wellness products, fitness wearables, telehealth apps, or smart home gyms also have incredible scope. 

6. Learning New Skills Online 

Finally, the lasting impact of learning online. Gen Z is believed to play a significant part here as digital natives whose perception of education is not limited to the classroom. 

They’re seeking easily understandable inspiration on platforms like TikTok and Instagram while also delving into comprehensive tutorials available on YouTube. These resources aid in acquiring new skills, fostering resourcefulness, and striving to create a positive impact on the world. 

As a brand, you can leverage this change to educate your audience about your story, purpose, and products to build an authentic connection with them. 

Wrapping Up

So, how has consumer behavior changed? 

One, consumers have become more value-oriented. They prioritize brands that align with their personal values and goals. Values like sustainability, ethical consumption, and personal well-being top the charts. Two, they love contactless payments and shopping online for its convenience. Three, their focus is on essentials, yet they keep some money for luxuries.

While these behaviors may continue in 2024 and beyond, some may change. What’s important is to continuously keep evaluating and analyzing consumer behavior. We at StartInc know just the right parameters to analyze consumer behavior in the new normal. Our team heavily relies on data to help you build and grow your brand. 

Want to know how we can help you? Find out here!