What Types of Investment Should be Chosen When the Consumer Behaviour Changes
According to the consumer behavior research by McKinsey & Company, since the outbreak of COVID – 19 pandemic to the lockdown period and until now that many countries have loosened up, it is found that the consumption behavior of people has fully entered the phase of ‘New Normal’ with 5 clear changes as followed:
1. Shift to Value and Essentials
Consumers give more importance to value and necessity because they are aware that COVID – 19 crisis affects income and the economy worldwide and they are uncertain of whether everything will return to how it was or not. Thus, consumers are more careful about spending by only buying food and necessities.
2. Flight to Digital and Omnichannel
Consumers put more importance on online purchases even though many businesses have been opening as usual. Besides, home delivery service, drive-through purchase as well as other services that minimise physical contact or use the digital system will gain trust from consumers in a long run.
3. Shock to Loyalty
Consumers care less about branding and pick products mainly from value, convenience to access the products, and quantity.
4. Health and “Caring” Economy
Consumers give more importance to health and hygiene standards. Does not matter if it is a retail stall or convenience store, it must uphold cleanliness and keep the safe distancing between customers. Apart from that, consumers will buy products with clean and safe packaging or products from the company that shows care for their employees, society as well as the environment.
5. Homebody Economy
Consumers spend more of their time at home, be it working, studying, online purchasing, or online entertainment, and according to the research, 70% of consumers are not ready to conduct activities outdoor as they used to do. Nevertheless, consumers still listen to advice from medical organizations on safety measures and the development of the vaccine.
When the consumption behavior changes, of course, the way to invest changes.
Selection of stock during New Normal for short term
Tech stocks. The technological industry is growing every day. This is because people are still doing most of their activities indoors, but they have to communicate with the world through several channels for their online meetings, virtual learning classes, or online shopping. This allows technology-related businesses to develop and grow gradually.
Real estate stocks The change in marketing strategy in many companies to boost the sales, together with the demand from the high-rise market of consumers who wish to spend more time at home, gives rise to this group of businesses to grow in reverse of the financial situation. Especially, the increasing sale of completely constructed housing estate located in Bangkok, suburbs and other cities.
Selection of stock during New Normal for long term
Healthcare stocks. It is undeniable that health has become the first few important topics for consumers. This allows this group of businesses to grow in a long term. This group of businesses will cover healthcare services, online health consultations, inventions of technology to increase the effectiveness in healthcare services,s and the invention of vaccines.
E-Commerce stocks. The adaptation of consumers to turn to online shopping or through online applications causes e-commerce businesses to continuously expand worldwide and they can be invested in the long term. This is caused by the consumption behavior that changes according to convenience as well as marketing stimuli from the entrepreneurs.
Selection of stock during New Normal
For investment during New Normal, investors should be focusing on sustainable investment which is consisted of 3 parts as follows:
The company that makes full use of resources as well as is environmentally friendly.
A company that takes care of their employees equally and justly.
Company with good management, encourages integrity in working and brings benefits to shareholders.
Besides, investors should give importance to entrepreneurs with organizational culture, stress on agility, quickly adapt to changes, and are effective because investors can never know what will happen in the future.