Consumers Facing Financial Uncertainty Under Covid-19

Consumers shrinking wallets have sparked drastic shifts in spending, purchasing habits, and routines as they try to cope with the harsh economic effects of COVID 19, a new report by marketing agency SCANAD shows.

Dubbed ‘Understanding the New Normal Consumer’, the report aims to help brands understand the massive changes in the consumer environment as they try to adjust to a new way of living.

“Understanding this new context will be crucial for brands as they seek to maintain and grow demand. This report takes a look at this changing consumer environment across various standpoints – behavior, consumption, and culture – in a bid to help brands navigate these truly unprecedented times,” said Scanad Chief Executive Officer Sandeep Madan.

Findings of the report show that 84 percent of consumers are glaring at the reality of financial uncertainty as their household impact has been impacted negatively; 40 percent are financially vulnerable while less than 30 percent are hopeful of a financial rebound in three months with the rest looking at 6-12 months.

Further, the report shows that a decline in economic activity in the country’s main hubs has put immense financial pressure on Kenyan households and businesses. This has led to over half the employed populations receiving a salary cut, an estimated 435,000 Kenyans losing their jobs with up to 47 percent of them relying on food donations to survive.

“Social disruption, business closures, mass unemployment, and an uncertain future are just some of the things preoccupying the minds of Kenyans today. Because of this negative impact, there is increased uncertainty which has triggered bulk buying and adventure as consumers are now trying out new products and brands,” said Madan.

While COVID 19 affects every single person on earth at the same time, the report records that as a result of various inequalities that existed before, different social classes are experiencing the effects in very different ways and intensities.

For those on the top of the economic pyramid, the pandemic has only meant a disruption in their lifestyles yet for those at the bottom, it has threatened their very survival.

“For marketers, these changes mean that they are dealing with a new breed of consumers, however, for brands, the report records that it is a time for them to take responsibility to lead and serve as opposed to capitalizing on the existing crisis. This calls for them to act beyond communication, serve new needs, and maintain brand momentum,” said Madan.