The coronavirus is leading to changes in consumer behavior. How to address these changes was the central theme of the conference “The COVID-19 World: Look at Me, Don’t Touch Me,” which was part of the Living Marketing series of events at Universidad ORT Uruguay.
The presentation was given by Karen Bruck—regional vice president of Marketplace at MercadoLibre, a graduate of ORT’s Bachelor’s program in Management and Administration and the MIT Sloan School of Management’s MBA program, and a member of the Advisory Board for the MBA program at the Graduate School of the Faculty of Administration and Social Sciences. The talk was held online.
The Impact of the Coronavirus
In Latin America, the situation is less severe than in other regions, such as the United States or Europe. However, there are already thousands of people infected, healthcare systems are being stretched to their limits, and the situation could get worse.
The expert noted that the pandemic has had the expected effects on e-commerce worldwide, such as changes in the products and services consumers are seeking.
At first, there was a specific health-related fear ( which led people to buy, among other items, disposable gloves and hand sanitizer). Later, the focus shifted to meeting basic needs (primarily food and cleaning supplies).
After those first two phases, consumers turned their attention to entertainment ( for both adults and children) and physical activity. As a result, there was a boom in board games, video games, and purchases of dumbbells, exercise mats, and other fitness equipment. After two or three weeks, food delivery also increased.
During this period, consumers cut back on spending on transportation (Uber, taxis, cars), fashion, travel (flights, hotels), and group entertainment (movies, concerts, events). In short, certain categories that were once considered important are no longer seen as such, and vice versa.
Bruck emphasized the importance of offering products and services that meet current demand. “We need to figure out how to prepare ourselves, how to defend our competitive position, and how to get creative in order to keep pace with these changes in behavior.”
Once the pandemic is over, its effects will not be the same across all sectors. E-commerce will likely emerge stronger, Bruck noted, as online shopping habits have been established that are likely to persist even after the pandemic ends.
When it comes to supermarket products, consumers will likely switch the brands they buy (for example, switching from a more expensive shampoo to a cheaper one). In other industries, such as those related to oil, consumption will be severely impacted and will decline. Finally, some companies will have to exit the market.
Preparing for the future
Companies must strive to emerge from this global crisis as strong as possible. First and foremost, Bruck said, they need to address all short-term issues and keep in mind that their employees are going through difficult times.
Another key consideration is to implement technology as quickly as possible and cut unnecessary expenses. It’s also important to think about how to get back on track once the pandemic is over, whether changes are needed, and how to make those changes, as well as having a communication plan and focusing on areas that will grow.
Bruck mentioned the other consequences of the coronavirus: the air is cleaner and emissions of air pollutants have decreased; hygiene practices have improved; the importance of investing in health and education has become clear, as has technology’s ability to control pandemics; and charitable organizations have demonstrated remarkable levels of organization and responsiveness.
The expert said, “Think of this as training for a marathon. You have to set a realistic deadline. We know it’s going to be tough, but we’ll come out stronger. We have to plan day by day to achieve small goals and feel a sense of accomplishment. We need to focus on feeling good, taking care of ourselves, and seeing how we can help.”
Finally, he emphasized the importance of making the most of the resources we have. He recommended using the time and tools available to acquire new knowledge and research industries in areas that have not been devastated.