WARC releases a new report on how the FMCG sector in different parts of the world is being affected by the spread of the Coronavirus.
It’s no secret that the chance of a recession is high at a time when the novel Coronavirus is rapidly spreading throughout the world. The effect is not just one on country’s economy, but on the entire world’s. Major banks Goldman Sachs, JPMorgan and Deutsche Bank are among the others who have revised economic growth projections to suggest a sharp, imminent downturn. This pandemic, is however, unlike a normal recession - The Purchasing Managers Index (PMI) data shows a far steeper fall in services activity than would usually be expected.
Consumers are adjusting to ‘living a new normal’, and new buying habits may prompt permanent shifts in behaviour, prompts the report. The report states that there is one key difference between the advertising landscape in the last crisis (the recession of 2008) and this era - and that is the rise of e-commerce and digital advertising. WARC data reveals that one in four millennials is more likely to shop online for FMCG commodities, thanks to the outbreak of the Coronavirus.
The report also mentioned that the FMCG sector is not going to be hit hard by the downturn in the economy, but it will change consumer behaviour and buying patterns. During the time of crisis, brand building is more important now than ever - while selling via third-party retailers and not directly to consumers. FMCG sales on online retail channels like Amazon have boomed. In the future, online players may become more significant to FMCG shoppers, increasing the importance of DTC or subscription offers. Most shoppers are favouring shopping online, as opposed to physically visiting a retail outlet; this is particularly true in India (55 per cent of consumers) and China (50 per cent), but also notable in Italy (31 per cent), the US (23 per cent), and the UK (18 per cent).
Read the report here.