New consumers: Digitally savvy but financially constrained

KUALA LUMPUR: A new consumer is said to be emerging; one that is financially constrained, more advanced in their use of digital technologies, more thoughtful and selective in their decision-making, and

keen to see Covid-19 as an opportunity to reset values in the world.

KPMG International’s “Consumers and the New Reality” report revealed the insights from data it received from over 12,000 global consumers.

The report also highlighted three prominent purchase drivers influencing consumers’ decision-making - value for money (63%), ease of buying (42%) and trust in brand (41%).

KPMG’s Head of Consumer, Industrial Markets & Manufacturing in Malaysia, Siew Chin Kiang noted some observations.

“Consumers’ spending is impacted by both the decrease in disposable income and the psychological impact of Covid-19. We see new segments arise, separated by their need to group products and services into categories of necessity, with spending behaviors moderated by financial attitudes.

“Overall, four in 10 are financially worse off, with another 13 percent deferring major purchases,” he said in a statement.

Here are other insights gleaned from the report:

* Majority of consumers are now comfortable using online channels, reducing physical purchase occasions and are gravitating towards touchless shopping and contactless payments.

* The retail sector, especially physical retail, is most under pressure with many retail outlets seeing a decline in footfall and sales (retail trade contracted by RM13.5 billion (-32.4%) in April 2020 compared to the same month last year according to DOSM).

With that, Siew urged retail executives to focus on four main areas to build up business resilience that can help see their companies through to recovery and sustainable growth.

1)Evolve your business retail model.

2)Prioritise purpose

3)Rethink the cost of doing business

4)Know your customers

“Ultimately, business survival boils down to understanding your consumers and anticipating their needs. Retailers need to reinvent their business approaches, invest in secure digital methods of communication and payments, and explore wider range of models for gathering and analyzing customer data. This enables trust to be the bedrock of any relationship with their customers for the long haul,” added Siew.