Part 1:
We all know it: consumer behaviour will never be the same again. Marketers of all goods and services face a new unprecedented challenge but no doubt a once-in-a-lifetime opportunity to reimagine how things will be in this new normal. The shrewd ones know that what may seem to many like a temporary setback and a return to whatever we were doing a few weeks ago, is not realistic. This is more of a reboot and not a simple pause.
So, where could we possibly be heading? No one knows, but here are some emerging trends that many of us have thought about or read about recently. I have chosen a few industries below to see what the implications could be as consumers change their habits and preferences.
Retail and shopping: In the last ten years, we have seen the boom in global online purchases rising substantially as a percentage of the overall retail business. Oman and the Middle East in general have not seen the same volume growth and penetration levels as other markets. However, the trend is upwards, and the pandemic will be a catalyst to either upgrade current e-commerce websites and apps or launch new ones, particularly for smaller retail businesses.
Luxury consumer items will be affected. Globally, consumers seem to have reached ‘peak stuff’ ownership quicker than expectations, locally we will see deteriorating consumer purchase power due to job insecurities and the focus on buying essentials, the low oil price environment which may last longer than anticipated could also prolong the situation.
Malls will have to rethink once again about the ‘experiences’ they can offer shoppers. These experiences will still play a significant role, but busy malls will have to implement some variations of social distancing, enhanced hygiene levels, no product touch policies, and maybe even restrictions on the number of buyers at certain peak times. All of this will play an important part in their consumer offers for the next couple of years and not just months.
Travel and Tourism: There may be zero travel at this time, but this will return in a few months. However, changes will be noticeable in both the business and leisure sectors. Businesses have seen how affective Zoom and other internet-based conference packages can be although not perfect, but they have saved thousands from the travel budget. Going back to the pre-pandemic frequency of business travel is unlikely in the foreseeable future; only essential travel will happen at first, and many airline industry forecasters predict more expensive airfares in the short term.
Tourism will return and people will want to visit new places, but there may be a preference to return to familiar locations that have comfortable and safe infrastructure, especially health care, and why spend so much time in overcrowded cities when there are quieter towns in more rural settings? Oman has a great opportunity due to its low density, clean environment, scenic spots, and great infrastructure. Boutique style accommodation such as the Heritage Homes concept will be much more appealing to future travellers trying to avoid larger busier hotels. The bigger hotels will have to adapt their offers with more activities and experiences for the local / GCC market and promote the Staycation concept more than had done in the past.
Real Estate: In the commercial sector, office space would probably see more profound changes. We are now going through what they call the world’s largest ‘work at home experiment’. Business owners may not want everyone to be office based as in the past as many employees like the idea of working from home now that they have experienced it. Cultural changes must also happen for this to work long term; it should come down to the performance of the employees rather than hours spent at their office desks. Rotating staff is also an option, which could mean less office space is required besides redesigning the work area for employees so that more space between the desks is made available.
Banking: Customers mostly received satisfactory to good service from their banks, and online services have been a convenient tool for most customers so far. However, during this period, many customers – whether individuals or small businesses – are going through a dire situation, and the bank-customer relationship cord must remain stronger than ever to ensure long term loyalty. We have already seen more usage of online services, and this will continue in addition to enhanced phone banking services and contactless payments, there should be fewer cheques issued and less cash handling in the future.
In part 2 we will discuss some of the consumer business sectors that will be energised by this new reality.
Khalifa Al Mukheini
MD – SIMPA marketing research and consultancy.
