There is a flurry of preparations as the retail, manufacturing and hospitality sectors brace for the country to emerge from 16 months of economic restrictions. But it’s not all good news, because the recovery phase will likely send demand shockwaves through supply chains not seen since the start of the pandemic, and companies will face a consumer base whose habits and expectations are more fragmented than ever.

Consumers won’t simply go back to the way they were, according to the market research firm Leger Marketing Inc. A small portion of them are desperate to return to life exactly as it was before the crisis and others are clinging to their lockdown lives, but most have cherry-picked consumption habits from both, making it harder for companies to figure out how to serve them all.“The phrase I hate the most is ‘back to normal,’” Leger executive vice-president Christian Bourque said. “That normal is dead. It doesn’t exist anymore.”

Leger, in collaboration with creative agency lg2, released a report that segments the population into six consumer profiles, forecasting how each segment will react to the recovery phase. Leger surveyed 4,007 Canadians online, from April 12 to 25, about their behaviours and attitudes to gauge how they feel about their financial situation, how much time they spend at home, their level of fatigue and how much optimism they have about the coming year. The survey found that 53% of Canadians believe they’ve changed for the better and want to maintain the habits they’ve formed in the pandemic. 

“Steadfast” – are eager to return to exact replica of pre-pandemic lives

  • 13% of respondents
  • Skewed male, with “a very strong proportion of retirees”

“Euphoric” – ready to splurge the money they saved on pre-pandemic activities

  • Approximately 9% of respondents
  • Younger, wealthier consumers

“For a lot of marketers, thank God, these consumers exist, because they jump on trends like it’s a train,” Bourque said. “They all went and bought paddleboards last summer because they could only go to the lake. They went for high-end sports equipment because they hiked maybe once.”

“Comfortable” – want to spend their extra money on products and services that will help them maintain work-life balance (at-home exercise, meal kits, home improvement etc)

  • 21% of respondents
  • Overrepresented in office works who worked from suburban homes during the pandemic

“Apprehensive” – still worried about health and will spend most of their time at home

  • 24% of respondents
  • Tend to have average-to high household income, and children at home
  • 81% of them don’t want to spend they money they saved

“They lost a lot of their confidence,” said Sophie-Annick Vallée, vice-president of strategy at lg2, who worked on the study with Leger.

Financial Health

The report found 30% of Canadians are coming out of the pandemic in better financial shape, while 42% are staying the same. The rest were in worse financial shape and the report split them into two main segments.

“Self-Starters” – likely lost their jobs but are eager to work and socialize even if they can’t afford to socialize as they used to

  • 21% of respondents
  • Skewed toward the 25-54 age range, slightly more female, and has a high proportion of households making less than $40,000.year
  • Nearly 2/3 had to change their food choices due to a loss of income – could drive traffic to discount retailers

“Shattered” – experienced financial and emotional struggles that will make emerging for isolation more difficult

  • 10% of respondents
  • financial issues were described as “shattered
  • Still display “heightened fear” of the virus

This wide range of expected consumer behaviours as the economy reopens particularly puts retailers in a challenging position, since they have to meet new expectations centred on the heightened online services they delivered during the pandemic while also meeting old expectations about in-store experiences.

“If (customers) can just do everything at home, what is the incentive for them to actually come to the store?” said Anwar White, a lecturer at McGill University’s Bensadoun School of Retail Management and director of its master of management in retailing program. Retailers were forced to become more efficient during the rolling lockdowns and restrictions, shedding staff and closing store locations. They’ll be under pressure to stay that efficient as they reopen. But the pandemic also accelerated the popularity of e-commerce and drove 12 years’ worth of retail innovation into 12 months, White said, and some of those things may be here to stay.

Still, getting customers back into stores could be even simpler than that. “In general, people have missed it,” White said. “People are having this feeling of freedom, and they’re going to want to compensate for the things they feel like they’ve missed in being a human being.”

Source: Financial Post