A ‘black swan’ event: COVID-19 to shape consumer trends for next decade, says expert

Strategy and consulting firm Accenture has started conducting fortnightly global consumer surveys to gauge the impact of the ongoing and evolving global crisis. Early results, many still unpublished, have indicated significant changes in consumer consumption patterns and shopping sentiments, particularly around which brand attributes were now prioritised.

And Oliver Wright, managing director and global lead on consumer goods and services at Accenture, said many of these changes would last long after the COVID-19 crisis finished.

A ‘seminal change’ on consumer behaviour​

“My assumption right now is that this is going to define the 20s. It’s not just something of an 18-month or two-year conversation, I think we’re talking about a seminal change on how people are thinking about consumption and I think it’s going to describe the footprint of the industry in the next ten years,”​ Wright told CosmeticsDesign-Europe.

“At headline level, what we are fundamentally seeing is that, from a consumer perspective, this is a black swan event which is causing people to reappraise a lot of their consumption behaviour. …It looks like it’s delivering a slightly sobering jolt to the overall consumer profile.”​

This ongoing crisis and associated lockdowns and business closures, he said, had created the largest single time period in the last 20-30 years where consumers had been prompted to reappraise their purchasing decisions. 

Consumer cares beyond price? Trust, environment, community and health rise​

Whilst consumers were still focused on basic availability and price, Wright said brand attributes like trust, environmental sensitivity and community were “holding up better”.​

“The community one is one that’s coming through quite strongly,” ​he said.

For the entire consumer goods industry, including beauty, this meant authenticity would rise in importance, he said. Health would also rise in importance for consumers, both from a physical and mental perspective. “Again, that trend is not so surprising; it’s the size of the trend that’s surprising to us.”​

The degree to which this crisis had caused consumers to reflect on mental and physical wellbeing was “clearly very, very substantial”,​ Wright said, and so it would be interesting to see how beauty brands managed to present health attributes to consumers, in an authentic way.

The coronavirus pandemic would certainly create “a bit of collective soul-searching” ​among consumers, but also among industry as it looked to respond to these changing consumer needs and priorities,​ Wright said.

Asked what exactly what was meant by this, he said: “Soul-searching is authentically questioning the company’s relationship with its employees; relationship with consumers; and relationship with partners across the value chain. It’s a much more fundamental examination because those links have been much more tested, in a way nobody expected.”​

Coronavirus crisis in phases – respond and then reset ​

In the immediate aftermath of the coronavirus outbreak in China and subsequent global markets, Wright said industries, quite rightly, clicked into ‘response’ mode. For beauty, he said manufactures had rallied to plug shortages in hand sanitisers and upscale production of hygiene products, among other things.

The next phase, and where industry was headed now, could be classified as “resetting”,​ Wright said. “What’s happening now is there is a conversation people are already into that looks at the consumer world to which we’re emerging into and how it is going to clearly be quite different, both in terms of what consumers want but also what employees want.”​

Within all the structural layers of business, he said this led to plenty of questions on how organisations should be run. “This question about how we can reflect on creating something that has this innate quality of being very human is clearly going to be there.”​

“…It’s about this reappraisal of what the positioning of industry is for society as a whole and how they position themselves as companies within the industry. What this [crisis] is particularly doing is it’s causing each individual company to have to take a step back and think about what their underlying purpose is and how they take a position on creating a very human-orientated mentality to their employees and brand proposition,” ​Wright said.

The window for this resetting would happen five or six weeks after lockdowns started to lift and so he said industry ought to start thinking carefully “right now”​ about planned actions.

A look at how beauty may weather the storm better than some other consumer categories – covered in Part II of our interview with Wright​ – will be worthwhile in understanding when considering what actions may be most important and how to accomplish these.