Consumer behavior changes under the influence of many factors. And if it is not always easy to determine trends from year to year, then within 3-5 years, changes are clearly visible. It is also worth noting that the speed of consumer behavior has accelerated over the past 10 years.
Below is a list of the main global consumer trends in 2020, which are also common in Russia.
- Due to the development of information technology, consumers change the speed of perception of information. Buyers have the opportunity to get more information when searching for goods from different sources – to compare and read reviews, see reviews and ratings. Artificial Intelligence aims to make life easier for consumers who already rely on devices controlled by artificial intelligence. People are beginning to agree that certain tasks can be performed by robots. Consumers require multiple mobility throughout. Contactless payments and mobile payment are also in line with the trend. Today, consumers do not just want to be mobile, they expect this from any product. A sharp shift towards digital communication channels. Companies are starting to invest more in social networks and personalize advertising using various flexible metrics and input data. Companies need to encourage customer feedback, as feedback is an important tool for consumer confidence, and also learn how to work with negative feedback.
- Based on this, consumers are willing to give their money only for the best offer available. At the same time, consumers want to get the most complete product information in seconds. They are not interested in making long manipulations on the site. Their goal is to find out what is needed from a single link that is easy to find. Such an opportunity is provided to them by social networks, for example, Instagram, where you can go directly to the product page in history. Most of all, buyers are ready to trust posts with recommendations from acquaintances, friends and independent experts – microinfluencers who do not have a wide audience, and their opinion is not like advertising. Especially this way of perceiving information is relevant for consumers aged 18 to 44 years. Often, such an audience searches on social networks and the Internet for limited offers that are available for a short time and not presented in ordinary stores.
- Personalized treatments. Consumers want products that are made specifically for them. Many companies invest heavily in collecting big data in order to maximally customize the offers for each consumer. But more and more buyers are concerned about the uncontrolled collection of their personal data. Consumers want companies to be honest with them and disclose information about the data they collect and how it will be used. Therefore, companies need to take this trend into account and always be honest with consumers in this matter.
- “We stay at home”. Due to the difficult situation in the world in 2020, many consumers will spend a lot of time at home. Consumers will have to work, relax, shop, play and play sports at home. In this regard, people are looking for goods and services that would make them a more convenient and multi-functional place. These circumstances have led to increased demand and popularity of food delivery services, home goods, sports platforms, distance learning courses, online specialist consultations. While at home, people are freed up time for culinary experiments, sports and socializing with family. When purchasing goods, they look for companies and products that reflect these values and support customers in their endeavors.
- Love to local food and wear. People strive to express their individuality and national idea during shopping. Consumers are eager to buy local products because they better emphasize their personality. In turn, a number of retailers are changing the positioning of stores and increasing the share of products on the local shelf. Modern consumers are looking for niche and regional brands, especially this trend is noticeable in emerging markets in the segment of food products. People are looking for local small producers and refuse the products of multinational companies. People are tired of globalization and believe that products from local producers are more healthy and environmentally friendly. Consumers are confident that in this way they are contributing to support local traditions and cultures.
- All inclusive. A new trend in consumption is the desire of companies to make the product affordable and convenient for all groups of the population. Modern consumers want not only to buy a product that will satisfy their needs, but also to take into account relations with a company that supports their ideals, takes into account the needs of all groups of the population, refuses standards. That is why a growing number of brands are trying to emphasize inclusion in their advertising campaigns. In addition, this trend is manifested, for example, in the desire for body-positive, the rejection of the usual and standardized advertising images. Many large companies seek to build their communications with customers within the framework of this trend.
- Extension of choice. The buyer is important choice through which he realizes himself and enjoys. The personification of consumption is becoming increasingly important. There is a request for places where it is possible to try new things, to enrich experience. With the expansion of the assortment, the demand for landmarks and help in choosing also grows.
- Caring for yourself and products from stress. Recently in the world there are more and more situations that make people worry and feel anxious. Consumers are looking for products focused on mental well-being that prevent the physiological effects of stress, insomnia, and anxiety. Modern consumers no longer want to relieve stress with cigarettes and alcohol, they are interested in healthy products and ingredients in products that would help to achieve comfort, as well as reduce stress and anxiety. Beverage sales are increasing to help relax and provide a good night's sleep. As part of this trend, the popularity of beverages based on functional ingredients (hemp, turmeric, matcha tea) is growing in the food category. Growing concern for personal well-being and the environment puts air quality in the spotlight.
- Reusable use of things. The trend towards sustainable development and the wise use of things continues to gain momentum. Modern consumers prefer companies that invest in the reuse of things. And this is not about recycling, which largely discredited itself against the backdrop of scandals, when large companies, promising to give old things a second life, simply disposed of them. Today, the trend is just the rational use of things in the same form many times. For example, the popularity of stores and vending machines, where you can buy food by weight in your own packaging, is growing.
What trends we have and will have an impact on the behavior and values of a modern Russian resident is determined by internal country factors. At first glance, it might seem that changes in consumption are driven by retail, creating new store formats or plunging deep into the digital funnel. The study shows that the picture is more complex: retail forms the trend and follows the trends in society.
Taking into account our diverse socio-cultural landscape, the pattern of Russian consumption is more complex than the previously indicated trends.
- Increased mobility, increasing shortage of time, later creation of families, an increase in the number of single households, the continued need for shopping as an emotional filling of time lead to the need for convenience, time-saving services, and, accordingly, the development of retail formats “convenience store” food, express delivery. Russian consumers are more likely to make daily shopping trips to nearby stores. They like the emergence of new technological services, but in general, consumers call quick convenient payments and help from competent consultants key attributes that improve their shopping experience in physical stores. Retailers should consider switching to more compact formats and creating an atmosphere necessary for consumers to shop, which harmoniously combines technological progress and qualified store personnel with the appropriate assortment knowledge and customer experience. New formats are developing that combine shopping and experience, a new experience. Hypermarkets are changing the format and becoming life centers.
- The intensification of the information environment and the oversupply of processed information makes it possible to use targeted communications, on the one hand, and, on the other hand, puts barriers on the path to new consumers due to the prevailing desire of consumers to isolate themselves from unnecessary contacts and untargeted offers during everyday basic purchases.
- Increasing lack of time. The proportion of people experiencing stress of high mobility is constantly growing, at least due to urbanization and the expansion of megacities. Such people, on average, are characterized by higher purchasing power, interest in new products, and are more often involved in emotional shopping. Their needs are a constant incentive for the development of new services
- There is an increase in the number of single households, including due to the later creation of families. This segment is characterized by a higher level of consumption, and it is one of the most attractive for market players. Under the influence of these trends, two social trends are developing. A request for convenience in all aspects of consumption, the use of services that reduce time costs. The delegation of household issues, the use of services to free up time from household chores: from buying in a store or delivering ready-made meals to cleaning.
- For consumers who often eat outside the home, buying a stock of food for a week is not optimal, the format of the hypermarket or delivery to them is inconvenient. Buying a basic set of products for a week in a hypermarket or ordering delivery and daily purchases of perishable products in a nearby store. The menu is not planned in advance, and often spontaneously there is a need to buy one or two missing products, which are necessary for preparing dinner. The ready-made food market is growing much faster than the restaurant market. Firstly, the direction of ordering ready-made meals both at home and in the office is developing, and secondly, vending. A person receives more emotions in the process of consumption, transportation is a necessary waste of time, from which a person is exempted by services. One of the trends influenced by the trend towards the delegation of life is the development of the demand for ready-made food. However, many are not ready to completely abandon cooking. And not only because of savings. Cooking is an important ritual embedded in ideas about healthy eating, home comfort, and gender roles. Under the influence of these factors, on the one hand, and lack of time, on the other hand, the popularity of ordering sets for preparing dishes at home is developing. This is a model in which the consumer, saving time, takes part in the most important stage.
- Despite the growing popularity of social networks and the digital format of interaction among Russians, there is a desire to preserve the value of live communication, which presents opportunities for small and family stores, markets where informal communication is possible. And the main trend is an increase in the share of promo-hunters looking for discounts and promotions. Technology comes to the aid to promo-hunters. Already today, people use Internet resources to check stocks, make a purchase plan, and only after that go shopping.
- People get used to using electronic services, online shopping, ecosystems. It leaves a ton of digital footprints. In fact, it turns out that on the one hand there is an increasing demand for convenient barrier-free environments in consumption. On the other – the development of digital hygiene, alarms in connection with personal data.
- The abundance of choice and the complexity of navigation, the choice is increasingly made remotely, reduced contact with things leads to an increase in the importance of trust, the need for navigation among diversity.
- The growing concern about the environment leads to the need to develop seller’s responsibility (the use of reusable packaging, new types of packaging) and the conditions for their own environmentally friendly behavior. Companies need to pay attention to environmental practices, production and various projects in the field of sustainable development, so that when buying brand products, customers feel involved in the history of global responsibility to nature.
- The growing importance of the quality of products and services. While maintaining the high significance of prices, the consumer is becoming more and more demanding on the quality of the product. The importance of quality is manifested in several aspects. According to various sources, the share of food expenses is about 30% of household income. Even a poor consumer is willing to pay more for proven, high-quality products.
- Increasing attention to health and increasing diversity in nutrition, increasing literacy on healthy lifestyle issues, new trends in dietetics are shaping the market for healthy foods and the emergence of new foods. The growth of transparency requests, composition information. Great criticality in the choice. New intermediaries of choice, for example, popular nutritionists, bloggers. Request for “farmer”, local, seasonal. There is a category “farming” that is stable in the minds of consumers, which involves freshness, the absence of preservatives for long-term storage, and manual production. To describe such products, people use the epithets “live”, "home" in contrast to the sterile and unified product from the supermarket.
- Reduced purchasing power and increased transparency of price information creates a more rational approach and new savings practices. Use price aggregators to choose. The consumer confidence index shows a slight increase in the second quarter of 2019, Russian consumers remain extremely sensitive to price.
Despite the prevalence of global major consumer trends, consumer behavior in Russia is actively changing. After quarantine, consumers have new missions and shopping motives.
- Shopping formats
For several months, the pandemic has changed not only the retail format, but also the criteria for choosing a store. If in 2019 the most frequent purchase mission sounded like “a small purchase of goods for every day”, then at the moment the most popular options are “purchase for a week or a month”, as well as “purchase for cooking at home”. And for every fifth consumer, the mission of shopping was to “replenish stocks between large purchases”. The pandemic has shifted consumer purchases towards large purchases.
- Change in consumption of non-food products
Sales of the non-food segment in Russia in April 2020 fell by almost 10% due to the quarantine period. Deodorant sales fell 23% compared to last year, facial care products – 19%, after-shave products – 17%, shampoos – 12%. On the one hand, consumers bought for the future, on the other hand, the need for some products decreased. At home, consumers began to take a different approach to the process of self-care, and it would be wrong to say that they completely abandoned the rituals of beauty and hygiene. This means that personal care has not faded into the background, and soon we can expect a recovery in sales in these categories.
- Transition to the Internet
Every third consumer in Russia (34%), who bought everyday goods on the Internet during the period of self-isolation, did not make such purchases regularly before the quarantine period, and the growth of such purchases will further increase. The average online shopping check, according to a Nielsen consumer survey, turned out to be two times higher than in a physical store: 3300 against 1600 rubles. Due to the fact that the online channel primarily implements the purchase mission for future use, as well as due to the fact that online there are restrictions on the minimum purchase size so that delivery is free.
- Choosing discounts
The quarantine period affected the financial situation of consumers, which will inevitably affect the dynamics of sales of consumer goods in the short and medium term. The trend is already being confirmed: in stores goods from the low price segment began to be in great demand. Its importance in the market structure increased for almost half (47%) of the FMCG categories, due to which the share of sales of low-price segment goods in the market structure increased from 17% on average for the year to 18.2% and 17.7% in April and May respectively. At the same time, the reverse trend is observed in the group of goods of the premium price segment – the share of its sales decreased. Another way to look for additional benefits is through discounts. On average, 31% of consumers in Russia began to look more often for discounted products in stores – in the group of consumers affected by the pandemic, this value is even higher – almost 40% (38% in online stores, 39% in offline stores). Promotional goods continue to be an effective tool to stimulate demand, especially in a situation where buyers are faced with a decrease in disposable income.
However, global consumption trends remain.
• Advertising communications focused on an age audience are changing towards rejuvenating an age audience
• Interest in local producers rather than in the mass market
• Consumers seek conscious consumption and want less harm to nature
• Consumers make choices based on influencers' recommendations, not based on brand name
• Consumers do not want to communicate live, but prefer to communicate online
• Many people abandon the traditional way of family and do not want to buy goods that are family-oriented.
Most of the trends discussed are developing intensively in Moscow and St. Petersburg. Regions, according to experts, catch up with a margin of one to two years. But they cannot be mechanically placed in the copy model. Some trends are unlikely to take root in the near future, as there are no prerequisites for this. Nevertheless, tracking trends in consumer behavior is possible by increasing attention to consumer experience.