5 CONSUMER TRENDS MARKETERS SHOULD WATCH OUT FOR IN 2022

December 3, 2021 Guest User

Caren Espinosa, Business Development Executive

The pandemic has ushered in a multitude of challenges for brands and retailers worldwide. The drop in consumer mobility brought forth by stringent lockdowns has greatly affected the way people spend, prompting marketers to rethink the way they advertise. As we work together in the hopes of approaching the tail end of the COVID-19 pandemic, it is critical to anticipate the changes in market behavior that could help your business drive growth in the coming year.

Last November 17, the Philippine LGBT Chamber of Commerce hosted its very first masterclass under Chamber Academy, a mentorship program geared towards supporting LGBTQIA+ and allied businesses with their growth and development. This session was held in partnership with the Philippine Association of National Advertisers (PANA), and was fully supported by Vitalstrats Creative Solutions with our Managing Partner as the project lead for Chamber Academy. The executive masterclass featured Ms. Marie-Anne Lezoraine, Managing Director of the Worldpanel Division of Kantar Philippines. She talked about how the pandemic disrupted the consumption of fast-moving consumer goods (FMCG) in the Philippines, as well as the different market opportunities businesses can anticipate for the next fiscal year.

Here are 5 consumer trends your business could leverage on to build your brand and expand your reach in 2022:

1. Recovery will be driven by lower socioeconomic classes

The COVID-19 crisis has induced a massive economic shock worldwide, but has especially impacted the Philippines whose population is heavily skewed towards lower socioeconomic classes. There was a discernable dip in spending among low-income households as a result of business closures and the subsequent rise in unemployment. However, as the economy begins to recover with the lifting of lockdown restrictions and reopening of commercial establishments, FMCG consumption is predicted to increase as the purchasing power of socioeconomic classes D and E improves. In line with this, brands can push sales and maximize profits by offering value-for-money deals to these consumers, without having to necessarily cut prices. A broad range of literature suggests that for companies, making their products available in larger packs and bundles leads to savings in manufacturing, packaging, and transportation costs. It allows businesses to pass on the economies of scale to consumers through value pricing.

Source:https://economictimes.indiatimes.com/industry/cons-products/fmcg/value-for-money-packs-help-fmcg-companies-save-on-costs-and-retailers-compete-better-with-kirana-stores/articleshow/28913826.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

2. Elections may offer a boost in consumer expenditure

The run-up to elections is usually characterized by rich media coverage of election campaigns, and abundant promises of a better future. This effectively spurs hope and optimism among citizens, often leading to higher consumer confidence levels. Data from Kantar Philippines demonstrate that the average growth of FMCG consumption is typically 3x higher during election years as compared to non-election years. Ms. Lezoraine urged businesses to monitor how the elections will unfold, and examine how the consumers will respond as early as the start of 2022.

3. Shoppers will progressively adopt e-commerce

The e-commerce market in the Philippines has seen a gradual increase in penetration rate in the previous years, and the growth in revenue remains the lowest across neighboring regions. Despite having the highest daily time spent on the Internet in Asia, Filipinos have not been quick adaptors to e-commerce, perhaps because of their misgivings about sharing financial information online, or their apprehension about the reliability of online merchants. But this changed during the height of last year’s quarantine. The drop in consumer mobility triggered a spike in e-commerce transactions, with shoppers having no choice but to purchase food and essentials online. Kantar Philippines predicts that this pattern will continue in the coming years, with data suggesting that Filipinos are likely to keep shopping online even after the pandemic is over. The share of e-commerce in the market will only continue to grow, and businesses are encouraged to adapt to the fast-changing retail landscape by pivoting to digital channels and establishing their own solid online platforms.

4. Sustainability will become increasingly critical

In Kantar World Panel Division’s 2020 Sustainability Report, it is shown that despite the economic limitations posed by the pandemic, a significant percentage of Filipino households are beginning to prioritize sustainable consumption. Over 90% of the population expressed that they prefer products that are naturally and locally produced, further highlighting the increased awareness about the adverse environmental impacts of patronizing mass-produced and processed goods. This does not, however, translate to actual spending behavior. Ethically sourced and naturally produced products remain scarce in the local market and are often priced higher, making these inaccessible to the average consumer. Ms. Lezoraine noted that as we progress into a more socially conscious age where people look for brands that suit both their needs and their principles, it will pay to have an ambitious sustainability strategy.

5. Brands will grow through attracting more new buyers

Ms. Lezoraine proposed that for FMCG players, the most effective way to grow your brand is to acquire new customers. Intuitively, acquisition grows your customer base, leading to more opportunities to conduct business. During the last year, Kantar discovered through an extensive study that penetration is the key discriminator for growing and declining brands. There is evidence suggesting that most of your buyers will only buy you once a year, and that over 50% will not buy again next year. This is why businesses are encouraged to zero in on strategies that will boost awareness and consideration for their brand, keeping in mind that frequency and loyalty will naturally follow.

It is clear that the retail landscape will evolve in the post-pandemic age. Think about the emerging needs and changing lifestyles of your target audience, and use those as levers to drive your footprint and maximize your growth.

Did you miss Chamber Academy’s first Executive Masterclass? Don’t worry! You can head on over and rewatch it through the Philippine LGBT Chamber of Commerce Official Facebook Page at https://fb.watch/9sgb945qcU/.

What strategies are you excited to explore in 2022? We’d love to hear from you in the comments below.