FMCG during the COVID-19 epidemic. Forecasts for e-commerce in Poland
At a time when consumers' lives around the world are changing due to the coronavirus epidemic, the way they buy and make shopping decisions is also modifying. Therefore, FMCG manufacturers must ask themselves, how can they use this situation to reap the benefits for business? Those companies that have not previously offered online sales are facing the need to adapt to the new situation, which in practice means the rapid implementation of the e-commerce system. Why is it worth investing in this now?
Increased online sales in the era of COVID-19
Fear of the spread of the coronavirus epidemic and successive government restrictions limiting people-to-people contacts have resulted in increased traffic in online stores. Consumers, wanting to protect themselves against a possible total ban on leaving home, naturally began to accumulate supplies.
The growth in online sales of FMCG products is also visible in Poland. It is worth paying attention to the analyses carried out by Statista:
In March 2020, due to the COVID-19 virus and the closing of many stationery stores in Poland, compared to February, sales of FMCG goods on the Internet increased. The largest rise was recorded in the sale of e-cigarettes, household detergents, and groceries.
In the period from January to March 2020 due to the coronavirus epidemic, the number of orders in online stores in Poland increased compared to a similar period in 2019. The most significant growth in orders for groceries and health care & beauty products.
The outbreak of the coronavirus epidemic has increased the demand for FMCG products in Poland. After analyzing online sales in February 2020, the most significant increase in sales of FMCG products was recorded for dry goods, ready-to-eat meals, and concentrates.
COVID-19 changes consumer behavior
The increase in online sales is also reflected in shaping customer shopping habits. As eMarketer predicts, the deepest change in consumer behavior due to the coronavirus epidemic is in e-commerce in the food category. This change will probably have one of the longest-lasting effects.
What does this mean for FMCG producers? Nielsen has identified six key levels of consumer behavior that are directly related to the COVID-19 epidemic. These levels can be treated as signals indicating how consumers will buy especially necessities goods - food with a long shelf life, health care products or cleaning products.
- # 1 Proactive health-minded buying
- # 2 Reactive health management
- # 3 Pantry preparation
- # 4 Quarantined living preparation
- # 5 Restricted living
- # 6 Living a new normal
From the point of view of FMCG producers, it is worth paying attention to the fourth and sixth threshold. The fourth threshold refers to preparation for life during isolation and quarantine. During this stage, consumers are turning to online shopping. These changes can already be seen in some markets. For example, in Italy, where the outbreak was very rapid, reliance on online shopping has increased significantly. This situation has also become a challenge for those sectors that are not keeping pace with the response to the growing consumer demand.
During the sixth stage, i.e. when new normality is created after the epidemic - as Nielsen specialists point out - changes in people's behavior related to hygiene as well as taking inventory and using e-commerce will be noticeable. This process is already visible in China, where older generations are more willing to shop online to meet the needs of maintaining a household.
What does it look like in Poland? The Chamber of Electronic Economy (Izba Gospodarki Elektronicznej) has prepared a report "E-commerce in times of crisis 2020", which examined 1779 Internet users in terms of shopping behavior during the coronavirus epidemic. 38% of surveyed Internet users did online shopping during the time of isolation. Online stockpiling for quarantine has become increasingly popular, with almost half of those aged 35-44 using the online channel for this purpose.
Underestimating the changes taking place in the way consumers behave is a huge mistake. Producers who pass by them indifferently can wake up in a completely new reality after the epidemic. The changes will be so deep that it will be difficult for them to catch up with the competition, which has taken quick action and adapted its sales to online channels.
Next step: investing in own e-commerce
The situation associated with COVID-19 meant that consumers are increasingly willing to transfer shopping to the Internet. FMCG manufacturers have an advantage over other industries because it is their goods that customers reach first and it is they who can gain the most in the current situation. Success will be possible if producers decide to create their own online store. In the current epidemic, consumers often shop for specific products or specific brands in larger quantities. Therefore, the manufacturer's online store will be for them a guarantee of the highest quality goods, especially when ordering in larger quantities. In addition, its own online sales channel gives manufacturers full control over the appropriate presentation of their product range. It also gives the opportunity to collect data on customers and personalize offers to further encourage them to shop.
How fast can you implement the e-commerce system? In four weeks you can prepare the basic version of the online store. In addition, after this time, manufacturers can further develop the e-commerce website, enriching it with further features that will drive online sales after returning to normalcy.