More than half of consumers have discovered new shopping behaviours since the start of 2020 with 30% trying new brands and more than 20% trying new retailers, stores and websites, according to new McKinsey & Company research.
In Getting Acquainted with a More Mindful Australian Consumer, McKinsey’s latest insights dive into the legacy impacts that a year of COVID-19 will leave with Australians.
“Many Australians have made new or renewed commitments to personal values and goals, such as wellness or family, While we first saw this increased mindfulness affecting consumer decisions on staples like food, it is translating into more planned and considered shopping across the board,” McKinsey partner, series co-author and leader of consumer packaged goods and retail practices in Australia and New Zealand, Jenny Child said.
But it is not just about saving money: “Yes price is a driver, but it’s a mistake to think this is all about price. Brand trust, a perceived ‘localness’ and non-price issues like ethics and sustainability are still tipping points in purchase decisions. The tension between price, local, small, premium and sustainable will be like a ‘toggle’ that plays out differently based on who the customer is, what the purchase is, and so on,” she added.
McKinsey suggests that consumer segments have become further fragmented and micro-segmentation is now key to product positioning. The concurrent need for micro-targeting means digital marketing strategies are more important – and effective – than ever before.
“There is clear upside available for businesses who can master this micro-segmentation. There are opportunities because the same forces that change consumer behaviours are also breaking hard purchase habits. As consumers become more mindful of how they spend their money, habitual choices are challenged, and new engagement potentials emerge. This shock to loyalty is also a shock to apathy – and that’s gold for brands and services that can get in while minds are open,” Child said.
Another significant opportunity lies in the growing trend of our homes as spaces for entertainment and where we project our identities, McKinsey noted.
“Our cocoons are becoming our castles again. Exciting consumers as they reconnect with friends and family at home presents a great opportunity with growth implications across products and services. Businesses should think ‘back to base’ not ‘on the go’ and pivot to support, or even unlock new occasions at home,” Child concluded.