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Consumer Behavior Essay: Impact of Covid-19 on Customers

Question

Task: Write a detailed and well-research consumer behavior essay on the topic “How has Covid-19 changed consumer shopping behavior?”.

Answer

Introduction
According to the research on consumer behavior essay, consumer behavior is defined as the actions of customers when making a purchase or taking a decision in the market. It is the process by which they choose, consumer or dispose of products. Various factors play a vital role in affecting the way consumer behave in the market to get the best benefit out of their decision. Covid-19 pandemic has been the major reason behind the changes seen in the purchase behavior of the consumers (Mashao and Sukdeo 2018). There has been major disruptions in the market with unusual behavior of the consumers in such a unique situation. One of the major shiftsin consumer purchase behavior was seen in online purchase where there was a large shift from in-store shopping to online shopping (Baker et al. 2020). The consumer behavior essaycritically examines the shift in the behavior of the consumer to online shopping and its impact it has created. Further, the consumer behavior essay incorporates examples of brands that have faced the impact of such shift to illustrate the discussion.

Theme- shift from in-store shopping to online shopping
Discussion
Theme 1- Change in Shopping Goals

Sun and Han (2020) discusses that the novel coronavirus pandemic has highly affected the life of the people and their daily way of living. With the fear of reducing the impact and spread of covid-19, the consumers have effectively changed their decision on how much to consumer and the ways to consume. One of the major impactswas seen on online shopping. The shift in the behavior of the consumers since the advent of Covid-19 is due to changing needs, wants and desires of the consumers that has motivated them to take such action. According Martin-Neuninger and Ruby (2020) consumer motivation is a driving force that arises due to unfulfilled need and influence the consumption decision of a person. The health concerns and increase in the number of mobility restriction created a level of unfulfilled need-induced among the consumer and motivated the online consumption decision of the consumers. This can be seen from the behavior to purchase online for fulfilling their daily needs.This is because this behavior helps in satisfying need through a much comfortable manner (Pearson et al. 2011). This shows that with rising situation of tension due to covid-19, a need of the consumer to purchase online becomes a motivation and this led to a shift in their behavior. This is because a need becomes a motive only when it is unfulfilled, rise in tension and give cognitive satisfaction.

However, herein consumer behavior essay, Dannenberg et al. (2020) states that one of the sector that has experienced the shift in behavior of the consumers from in-store to online is the foodsector. Since the rise of covid-19, most the largest rise in consumer spending was seen on online purchase of groceries. This in turn has led to rising sale of online grocery retailer and increase in the market share of online retail. Diebner et al. (2020) has pointed out the case in Taiwan where the online sale of food shopping increased by 5.7%, as more and more consumers are preferringto purchase food online. Laato et al. (2020) is of the view that the demand for grains, vegetables, frozen foods, fruits and other food items has increased on online platforms more than in stores. The changes in the pattern of purchase among the consumers were also due to the imposition of stay-at-home order by the government in many countries. In this respect, Chang and Meyerhoefer (2020) has stated that need and goals are interdependent on each other and changes with respect to environmental conditions and experiences.The needs play a major influence on the consumption decision of a person. In the present circumstances,it is seen that due to change in environmental conditions such as spread of covid-19, online purchase has become a need and thus it has formed the new goal of the consumers (Li et al. 2020).

For example, the report of Mckinsey (2020) shows that grocery sale of Amazon during the covid-19 crisis surged to 45% in US and 80% in UK. This is because of the changed goal of the consumers in the time of crisis where the people are majorly focusing on their necessities and important needs and postponing other needs. This led to the rise in the sale of Amazon during covid-19. This can also be seen from conscious eating among the consumers where people are focusing on purpose driver online shopping. This shows that the shift to online shopping is due to changes in shopping goals and motivation.

Theme 2- Consumer Perception Behind Online Shopping
Grashuis et al. (2020) has stated that there are large increase in online trade since the rise of covid-19 situation due to the severe societal and economic restrictions. The reduction in the preferences for face-to-face communication and physical contact has tremendously led to the rise in the usage of digital media in the society. This can be linked to changes in consumer perceptiontowards consumption decision where the rise in preferences for digital media in daily purchase is due to the changing condition of the environment. According to Ajzen (2015) Perception is considered as a process by which individuals identifies and interpret something to create meaning. According to Gao et al. (2020) consumers had held the perception that the physical contacts will increase the spread of coronavirus pandemic from one person to another and in-store purchase is a space with maximum amount of physical contacts. Thus, based on this, the online products and services consumptions are perceived favorably by the consumers and in-store purchase is considered as unfavorable.

According to Abrar (2020), it is seen that the impact of coronavirus is seen on the online business where e-commerce business and grown tremendously. The purchase behavior of consumer since covid-19 has started supporting the online purchase because of lack of availability of products in the stores. The consumers are mainly depending on the e-commerce platform for fulfilling their necessities. According to the report of Hasanat et al. (2020), it is seen that e-commerce outlets has become one of the major space for consumer spending where the industry has experienced surge in demand.

The e-commerce sale will increase to 34.2% by end of 2020 where the consumer has turned towards online retailers. This is attributed to the change in attitudesand beliefs. According to the words ofAjzen (2008) considered herein consumer behavior essayan attitude is referred to as the change in the way to behave in a consistent favorable manner with respect to certain object or case. Attitude plays an important part in the changes in consumer behavior where the behavior changes with change in emotion and beliefs and impacts on final consumption. Three major components that affect the attitude of a consumer are cognitive, affective and conative components. In respect to industry report, it is seen that the surge in demand for online purchase is because of the changes in beliefs and emotion of the consumer. The covid-19 spread has made the customers emotionally weak and made them belief that the pandemic will not spread much if they prevent physical contact and practice social distancing (Fernandez 2020). Based on the fact it is seen that more number of consumers started purchasing online with the belief that this consumption is safe and this led to the increase in online grocery sales (Mashao and Sukdeo 2018).

It is evident in this section of consumer behavior essay that one of the known e-commerce online brand that has witnessed the rise in the sale of Amazon and resulted in higher net sales in US. According to Mckinsey (2020) about more than half, the people in Canada started preferring online retailer and this is increasing over time. Amazon has seen an increase in sale particularly because of covid-19 pandemic where the purchase behavior of 8% of the Canadians has changed towards online purchase and this has increased in shopping for over 30 days. Moreover, about 13% of the Canadians are showing interest to spend more on amazon in the coming weeks. The change in belief to purchase online is seen more among the young Canadians aged 18-29 years than on older adults. However, the increase was not seen in the purchase attitude of older adults. One of the major area of amazon that has attained increase in sales was grocery and food delivery where there has been tremendous increase (Deloitte 2020). It was evident that the change in beliefs of people to protect themselves from virus has motivated them to shift their shopping attitude towards online purchase rather than in-store purchase.

Theme 3- Need to Confirm Online Changes
Dannenberg et al. (2020) has pointed out that covid-19 has given time to retailers to show that they care for the consumers. It acts like an opportunity to demonstrate values to the consumers and show that they care for their needs. Keeping this in views online grocery stores has introduced various features such as special hours for health workers to help them deal with the situation. Moreover, Donthu, and Gustafsson(2020) has stated that many restaurants started their online delivery service such as delivering snacks, coffee and full meals to consumers to prevent them from moving out of their houses. These digital transformation in service owing to the need of the emergency period has helped made the companies develop enormous goodwill among the consumers and had a positive influence on safe consumption. The creation of such values played a major role in the shift in purchase behavior of the consumers from in-store shopping to online stores post covid-19. This is because the consumers are of the belief that the online services of the brands have been initiated as a strategy to protect them from covid-19 impact (Baker et al. 2020). This shows that the digital transformation has led to a shift in consumer behavior where electronic platform has become the major medium to help consumer and take care of the business.

For example, Fernandez (2020) has pointed in the discussion that the Telemedicine industry has increased rapidly in recent times with healthcare company earning a profit of 1.7 million in the first quarter of 2020. This is because 38% of the telemedicine users has moved to online services during the covid-19 period. Such an advancement and support from telemedicine companies due to rising emergency has increased the confidence of the consumers to use such services and led to potential surge in demand. This information provided in this section ofconsumer behavior essayshows that the effort of the businesses has improved service provision and has created values for consumers. This has become one of the major reasons for the shift in consumer behavior from in-store to online purchase.

For example, service improvement was seen in major retail chains around the world such as Amazon, Kroger, Walmart and others. According to Barrero et al. (2020), amazon and Walmart improved their online delivery service by hiring new employees for more efficient and faster delivery. Walmart hired more than 150,000 new employees in a month and planning to hire 50,000 more employees to support their delivery service during the lockdown. Moreover, amazon is seen to hire 100,000 employees for their service support and aim at hiring 75,000 more employees. These improvements has offered value to the customer through hassle free and timely delivery service. The improvement in service was also seen in supermarket chain Kroger that exchanged agreement with Sodexo, Sysco and Marriott to hire the workers laid off by hospitality firms. These activities made the customers belief on the online retail companies and led to a shift in their purchase behavior during the pandemic. However, the shift in behavior from in-store to online purchase was only seen in grocery sale and not in all retail goods such as clothing, accessories, beauty and others. This means Covid-19 changed the attitude of the people to consume only necessary goods such as food. Thus, shift was not on all online products or brands, as online shopping was majorly limited to necessity goods (Barrero et al. 2020). This can be seen from a drop in online luxury sales by 35% and clothing retailer faced a drop of 97% in half-year profits.

Conclusion
Therefore, it can be stated herein consumer behavior essay that the shift in the behavior of the consumers from in-store purchase to online purchase since the covid-19 has been due to number of factors. This can be countdown to attitudinal formation where new attitudes are formed with external influences. Further, the shift is also with the rise in motivation among the people to purchase online to protect themselves from the viruses. Lastly, improvement in service and rise in online service value has also led to the shift in purchase behavior. However, the shift was only limited to young adults and online grocery retail goods rather than on online clothing and luxury items.

References
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Ajzen, I., 2008. Consumer attitudes and behavior. handbook of Consumer Psychology, pp. 525-548.

Ajzen, I., 2015. Consumer attitudes and behavior: the theory of planned behavior applied to food consumption decisions. Italian Review of Agricultural Economics, 70(2), pp.121-138.

Baker, S.R., Farrokhnia, R.A., Meyer, S., Pagel, M. and Yannelis, C., 2020. How does household spending respond to an epidemic? consumption during the 2020 covid-19 pandemic (No. w26949). National Bureau of Economic Research.

Barrero, J.M., Bloom, N. and Davis, S.J., 2020. Covid-19 is also a reallocation shock (No. w27137). National Bureau of Economic Research.

Chang, H.H. and Meyerhoefer, C., 2020. COVID-19 and the Demand for Online Food Shopping Services: Empirical Evidence from Taiwan (No. w27427). National Bureau of Economic Research.

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