How COVID-19 Affects Consumer Habits
COVID-19 is quickly becoming a significant risk to economies around the world. Accordingly, the disease shows inconceivable influences on markets concerning financial, business, political, and socio-economic packets of countries. The United Arab Emirates has not been spared either. Since the first report of COVID-19 in the region, the government has instituted policies such as economic stimulus plans and measures to curb the spread of the contagious illness (Lakhani). With such measures come reactions from consumers whose habits have changed given the mandatory “stay at home, stay safe” campaign. Effectively, it has also affected businesses not only locally, but internationally as well. In light of this, the following report provides a succinct analysis of how COVID-19 has affected both consumerism and business with a specific interest in marketing within the supply chain management.
Effects of COVID-19 on Consumerism
The primary effects of COVID-19 on consumer habits are external factors. External influences are societal elements that affect consumer problem-solving habits revolving on social class and culture. Currently, a global culture instituted is the ‘stays home, stay safe’ campaign (Lakhani). Currently, the boom in online retail or online shopping is witnessed in the UAE. According to Ganediwalla, the migration to virtual shopping has considerably increased within the past two months. The continued pandemic has made consumers wary of going out in public. As a result, retail and wholesale companies are improving online sales through increased online purchases. However, this has come with unprecedented limitations. Due to the closure of UAE borders to curb the spread of the illness, cross-border businesses are not experiencing the surge in online sales from the region. However, Cherrayil indicates that companies are finding it more comfortable to import products into the country. UAE largely depends on imported goods, but the trend has shifted to local products (Euromonitor International). Euromonitor International reports that online businesses such as packaged food, consumer health, and home care are experiencing increased online sales. As such, essential goods purchase culture has surged with the limited purchase of non-essential goods in the UAE.
COVID-19 has also changed consumer habits regarding internal influences. Internal influences are unique problems that are individualized. Among the influences impacted is lifestyle, which encompasses the attitudes and interests of the consumers. The consensus is that lifestyle habits among UAE consumers have stronger attitudes and behavior, embracing purchases primarily online. The increased campaign on health, hygiene, and sanitation, consumer habits have diversified to the beauty and healthcare industry as well as the purchase of essential goods. Euromonitor International dictates that the beauty and personal care industry in the UAE accounts for AED 398 million in 2019. In recent months, the industries have recorded increased sales, given the increased purchases on hand sanitizers, for example. International companies such as Purell and Dettol report of increased sales (Cherrayil). But, the twist is that consumers also prefer local healthcare, beauty, and personal care products such as Epoch Cosmetics and Toiletries LLC (Euromonitor International). Also, consumers have opted to purchase long shelf-life products such as UHT milk, pasta, instant noodles, and rice as a means to promote longevity in consumption. The interesting aspect is that with online purchases, lifestyle changes have not been affected as much. Companies such as Sephora have recorded increases in sales, which interpret to limits lifestyle changes.
Additionally, retailers dealing with electronics also report increased online sales. A report filed by Cherrayil indicates that there has been an unprecedented rise in online consumer electronic sales in March in the UAE. Increased sales include the sale of personal computers, televisions, gaming consoles, and small appliances (Cherrayil). Sales in companies such as LuLu, Amazon, and Carrefour have tripled within the last month in the UAE.
The social influences aspects have not been spared either with the COVID-19 pandemic. Ideally, consumer habits effects have both experienced high involvement and low-involvement decisions. With regard to low involvement, the decisions to purchase hand sanitizers, hygiene products, and essential goods are becoming a repetitive marker in the online business. According to Euromonitor International, demand for pharmaceuticals has improved within the past two months compared to the last five months. Pharmaceutical products that include paracetamol, zinc supplements, and other vitamins such as Vitamin C to boost immune systems have become a standard purchase order online in the UAE.
On the other hand, high involvement decisions that navigate the purchase of products such as electronics have also increased in the UAE. Cherrayil reports that companies such as Jumbo recorded more than 200% in increased online sales. Similarly, companies that sell household items such as vacuum cleaners, air purifiers, and mobile phones have increased online sales. The closure of malls and shops led to the decline in physical sales for most companies leading to 16% sales records in total (Cherrayil). Nonetheless, the same companies report increased sales through online purchases by 75% since February. It goes to show that the high involvement decisions regarding purchases online have improved significantly compared to the traditional physical purchases by consumers in the UAE. Therefore, improved lifestyle choices have led to increasing high involvement decisions alongside surged low involvement decisions in the region.
Effects of COVID-19 on Businesses
The COVID-19 outbreak has impacted business operations both internationally and locally concerning logistics in distribution channels as well as communication and corporate social responsibilities reforms. The impact has specifically hit the distribution chain for international companies. A DHL report on the implications of COVID-19 states that due to government sanctions on the closure of borders, manufacturing has been disrupted. Cherrayil states that the United Arab Emirates majorly relies on imported products. Due to the policies in reduced social gathering, manufacturers have been forced to cut back on production or stop entirely. As a result, for multinational companies, the ability to counter supply with overwhelming demand has greatly reduced (Cherrayil). Mostly, companies oriented towards high involvement decision products such as vehicles and electronics have been affected by the need to adapt to government-mandated quarantine zones. Imports from China have subsided over the months, given the severity of the outbreak. However, the DHL report indicates that with recent events, exports are easing into re-opening mode with workers being allowed to go back to work. In the UAE, companies are grappling with distribution logistics such as LuLu (Nair). However, essential products such as groceries and commodities have not been affected, given the primary need to cater for necessities (Nair). Regarding local businesses, companies have been forced to seek third-party delivery companies to provide distribution logistics. According to Nair, the need to optimize online sales revenues has forced companies to resort to third-party companies. In Abu Dhabi and Dubai, for instance, local companies are using taxi fleets to ferry products door to door (Nair). Overall, international companies have reduced production capacities in given production sites whereas; local companies are improving sales through third-party companies who offer delivery services.
To boost sales, companies in the UAE are using digital marketing platforms to keep in touch and advertise products. The on-going campaign is targeted towards COVID-19 and how each company can optimize sales through improved education on how their products improve the lives of the consumers during these times (Chief Marketer). Accordingly, companies are alleviating the concerns of their consumers surrounding health products and online discounts. For instance, restaurants are offering delivery for their products through online purchases. Alongside this, the same businesses are re-assuring consumers that they are offering donation plans to help-out-their workers during this period (Chief Marketer).
Companies are also taking a philanthropic, corporate social responsibility approach. From the international to local companies, the businesses are offering campaign segments and financial aid to combat the spread, scientific research, and community initiative donations amid the COVID-19 pandemic (Clift and Court). Companies such as Nestle are offering emergency help, including the donation of food, medical nutrition products, and bottled water. Google has committed more than $ 800 million to aid the World Health Organization and governments as well as small scale businesses (Clift and Court). The TATA group has offered $ 200 million to develop software for COVID-19 patient diagnostics (Clift and Court).
Conclusion
The COVID-19 pandemic has caused rippling effects in business, governmental, and societal systems. The present paper has presented evidence-based discussions regarding the effect the pandemic has placed on consumerism with respect to internal, external, and situational influences as well as the impact on businesses. The paper concludes that businesses have had to reform their strategies through improved online presence due to the ‘stay home say safe’ campaign that has forced consumers to increase online purchases. As a result, this has improved sales despite reduced supply in specific industries in addition to improved corporate social responsibility to educate the masses on COVID019.
Work Cited
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