COVID-19 has had a profound impact on every aspect of our lives, from how we shop and how we work to our mental and physical well-being. As the situation continues to evolve, there has never been a more pressing need for businesses to reexamine and reconfigure their strategies. To attain sustainable growth in this changed world, businesses must take a 3Rs approach.
It takes an average of 66 days for a new behavior to become automatic, and after a year of living with COVID-19, we’ve definitely seen the development of some new consumer purchasing behaviors. It is imperative for businesses to discover and embrace these changes. Taking the fast-moving consumer goods category as an example, NielsenIQ observed record growth for products such as cooking ingredients, staple foods and cheeses, as consumers shifted from dining out to eating more at home during the pandemic. Consumers are also downtrading on some categories, like tobacco, while trading up on categories for loved ones, such as their babies, parents and pets. In Indonesia specifically, gifting behavior during the festive season shifted from indulgent products to staple items, according to Kantar.
Other than impacting consumer habits, COVID-19 also redefined the outlook of the FMCG category significantly. For fashion, RedSeer predicts that Southeast Asian consumers will deprioritize style and put more emphasis on function in the future. They’ll also be better disposed to sustainable and preloved products.
Reposition to Grow
Changes brought on by the pandemic have implications to the plans and competitive environments of businesses. As such, companies need to fine-tune their value propositions, pricing and assortments, and future-proof their business models by leveraging technology.
For example, during the second annual collaboration between Lazada and Jakarta Fashion Week last November, many fashion labels and designers leveraged the eCommerce platform to reach wide swathes of consumers beyond their offline stores. The event also included “The Show of Hearts”, a livestreamed Lazada Style Space fashion show that gave participating businesses the opportunity to increase their engagement with shoppers, thereby increasing brand awareness and loyalty.
Renovate Strategic Plans
Last but not least, businesses must stay nimble to identify changes and unlock opportunities during and in the aftermath of the pandemic. The ability for businesses to tweak and refresh their strategies effectively will be a competitive advantage.
The long-term social, economic and health impacts of COVID-19 are still unfolding. Although vaccinations are underway, local economies in Southeast Asia are still facing a lot of uncertainties and challenges given the uneven inoculation pace in the region. Businesses need to be prepared and always look out for bright spots in the economy, including new opportunities that come with the rise in demand for online sales and services.
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Goh Chen Zan is a vice president at Lazada and leads the research function in the group strategy team.
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