QUT’s (and Australia’s) leading retail expert Prof. Gary Mortimer, presented “Consumer Behaviour in a Post COVID-19 World” at the Pharmacy Guild of Australia’s 2021 Australian Pharmacy Professional Conference.
His presentation identified:
- emerging consumer trends during the pandemic
- review the pharmacist’s active and emerging role in combating COVID-19 medication misinformation
- examine alternative ways to engage with consumers
- detail how the products consumers buy have changed
- and propose changes pharmacies must make to respond to these changing consumer behaviours.
Interestingly, individual consumer behaviour is fairly consistent after major catastrophic events. Stockpiling, cocooning and home activities are common.
For business, restrictions meant a huge downturn in foot traffic and cuts in consumer spending, but opportunities for online shopping and customer service as we start getting back to normal.
But what does this mean for business? What are the opportunities? How do you build trust, add value for our customers in the post COVID-19 world?
I followed up with Gary who shared these insights with me…
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The COVID19 pandemic has had a significant impact on consumers and while much of the discussion has focussed on retail, more specifically supermarkets, pharmacy is not immune to the impact of COVID.
To begin with, we have seen several trends emerge as a result of COVID – stock piling, cacooning, an acceleration of online shopping, a shift to ‘essential’ and a fall in discretionary spending in some areas.
While much of the reporting focused on stockpiling of dry groceries, rice, pasta, bottle water, overlooked was those consumers who stockpiled OTC and prescription medicines. The management, particularly around the dispensing of prescription medicines is an important issue for pharmacy. While COVID19 presented as a single disruptive event, pharmacy must be prepared for future events.
Cocooning was evident.
This consumer tendency to retreat into the home and focus on personal pursuits that give a sense of comfort and normality in an otherwise crazy world. The last time we saw this was post-9/11. Aligned to this was a need for ‘feel good activities’ – solo fitness, cycling, yoga and wellbeing – meditation, healthy cooking. Again, an important area for pharmacy to play a role.
Consumers spent $861.12 billion online with U.S. retailers in 2020, up an incredible 44.0% year over year. Hence, it is vital for pharmacy to ensure their ecommerce channels are operational and efficiently run.
As job losses resulted from industry shut down, consumers started to cut costs and shifted to buying ‘essentials’. While this is not great news for pharmacy brand managers, there are clearly opportunities for expanded ‘budget’ and ‘private label’ ranges.
As we enter a post-COVID19 world, it has been suggested new segments of consumers will emerge.
At either end, we will see younger, briefly disrupted, now optimistic consumers – willing to quickly return to normal consumption patterns, and at the other end, lower educated consumers, unemployed and still cutting discretionary spending. These will however be small segments.
In the middle, there are new opportunities for pharmacy.
Cautious consumers, those who are middle/high incomes, focussed on health, brand trust – They will seek pharmacy brands they know and trust. Advice on health and wellbeing. Accordingly, a viable target for complementary products – vitamins, herbal and supplements – dietary, proteins powders.
We will also encounter the frugal shopper – spending less, trying to re-establish themselves and somewhat pessimistic about the future. For this group, pharmacy should consider tiered private label products – very, low-cost generic basics, and ‘bulk buys’ or bundle deals, that lowers the unit price.
There are other post-COVID19 trends that pharmacy should be cognizant of due to the emerging macro-environmental impacts.
Globally, we have seen a decline in CBD foot traffic as cities locked down and workers were told to stay home. We are not rushing back to the office anytime soon, as many of us have learned to balance working from home. For pharmacy, we may see the rationalisation of stores and leases, simply a right-sizing of their fleet of stores. Re-analysis of foot traffic and locations and a re-assessment of ‘prime’ locations. Potentially even revisiting core trading hours.
To comply with various types of ‘stay at home’ directives, customers have responded by supporting local businesses and brands. This presents a great opportunity to strengthen local community connections. It will be important for pharmacy to present their ‘local’ credentials, i.e., how long have you been caring for your local community?
AS post-COVID19 consumers hark ‘back to basics’, ‘value for money’ will still be a key driver of purchase behaviour. Importantly, value is not just ‘low price’ – it is quality advice, trust, benevolence, understanding and much, much more. It will be important for pharmacy to understand the ‘value’ their consumers seek from them.
As vaccines rollout, we may find consumers expressing an unwillingness to experiment. Customers are continuing to reassess their purchasing behaviour and consider more deeply where their money should and shouldn’t be spent. This will create challenges in launching new pharmaceutical brands, so pharmacy will need to counter with risk mitigation strategies – guarantees, advice, provision of information and testimonials.
Virtual is the new norm
Zoom users increased from 10m to over 200m in 2020. Microsoft Teams added 12m active users in just 7 days. Friday after work drinks became virtual drinks and virtual exercise classes and cooking classes became the norm. This virtual environment presents great opportunities for pharmacy to connect with their market. How well are you placed to embrace, accelerate or adapt for these changes? Zoom health advice? Healthy eating or safe dieting online VLOGs?
Finally, fear and anxiety will continue for many consumers.
The speed of change at the onset of the pandemic was unsettling for most and instilled fear in many. Pharmacy plays a critical role in mitigating fear through credible, timely and relevant information. In a time of crisis, trust becomes even more important, for organisations, and the brands they manage, integrity is critical.
Gary Mortimer is a Professor of Consumer Behaviour and Marketing at the Queensland University of Technology (QUT) and the Chair of the Australian Retailers Association (ARA) Consumer Research Advisory Committee.
Gary spoke at the Australian Pharmacy Professional Conference 2021 – attended by 6,000+ pharmacy owners, pharmacy managers, pharmacists, intern pharmacists, retail managers, pharmacy assistants, students and pharmacy industry suppliers. You can watch the full presentation below: