Global recession is causing dramatic shifts in consumer behavior and companies will need to adapt to survive.

This will mean that people will likely try to save more money, will be working from home (WFH), will buy fewer on-the-go products, and purchase fewer products dedicated to how they look in public.

The lockdown in the first half of 2020 was instrumental in slowing the spread of Covid-19, yet it had its detractors in the US, the UK, Sweden and Brazil.

Where countries delayed lockdown and quarantine, the outbreak spread through on our economic spaces, spreading in the air between mask-less consumers and workers.

When the governments acted, work, play and international movement became much more difficult. It may be more difficult still to get back to the pre-Covid-19 landscape that so many company bosses and politicians are familiar with.

In the US alone, new weekly unemployment claims rose to 1.4 million, an increase of 109,000 on the previous week. In the UK in June, the official unemployment rate is 3.9%, with the number of people on PAYE falling by 649,000 compared with March 2020. As unemployment grows, economic participation wanes and the system has less discretionary spending and more saving. This can damage businesses further and put more people out of work.

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By GlobalData

WFH has changed consumer behavior

With so many employed people now working from home, consumer behavior has changed significantly. Hand sanitizer and facemask demand skyrocketed. Globally, shopping culture shifted from purchasing more premium and on-the-go items to buying items for the home and garden.

Now many businesses are gradually reopening with social distancing enforced to some degree, although foodservice has reported a significant problem with no-shows.

In the UK, the Prime Minister Boris Johnson has said that from the first of August, it will be up to employers to decide whether staff can safely return to workplaces. Unilever has announced that it would only countenance a policy of gradual return on condition that coronavirus remained contained.

Unilever sees a hybrid future of work unlocking productivity and flexibility

Unilever’s approach is likely to be emulated by many other companies across many industries, which will change the main points of sale for many consumer products and change demand for certain products. While politicians may be eager to get workers back to the same locations and consuming as they did before, the companies and workers themselves have, in large part, adapted to WFH.

“We will never go back to a 100% of office-based workers’ time being spent in the office,” Alan Jope, Unilever’s chief executive said. “We see a hybrid future of work where people might spend a couple of days in the office and two or three days at home. This has unlocked tremendous productivity and flexibility in the Unilever team.”

Stay at home consumers have changed purchase focus

Unilever’s second-quarter results show what many in FMCG analysis have been suggesting: indulgence products like ice cream saw sales growth of 26% in the three months to June, but shampoo and conditioner sales fell. Consumers seek simple joys at home, and the reduced ability to socialize had reduced demand for make-up and ‘social-facing’ personal care items.

By comparison, hand sanitizer and household cleaners shot up, with GlobalData’s Covid-19 week 3 recovery survey reporting that a third of global consumers said they are stockpiling, buying significantly or slightly more household cleaning products. While demand for foodservice and on-the-go products was swallowed by the lockdown, consumers began to cook more from scratch, at home, buying up essentials like stock cubes.

Executives that long for a quick return to pre-Covid lifestyles and consumer trends should instead focus on the real current human demands of their workforce. The return to work will be gradual.

This is an opportunity to rebuild brands by investing in product development that recognizes what people actually need, not what was expected in the pre-Covid economy.