The Coronavirus (COVID-19) pandemic has heavily impacted many sectors of the economy. Increasing product prices, intensifying unemployment and weakening disposable income have encouraged conscious consumption. Consumers’ interest is centred around personal health and home due to lockdown restrictions. Limitations on out-of-home entertainment and physical retail and services have made consumers rely on e-commerce and digital services.
COVID-19 pandemic heavily hit in Q1 2020 but it was not the only challenge Russia has experienced. Local currency devaluation due to the oil price war between Saudi Arabia and Russia after the failed OPEC deal at the beginning of March, has worsened the situation. Consumer prices are expected to increase due to raw material costs and foreign trade disruption as well as growing unemployment rates which will weaken consumers’ disposable income. Consequently, many sectors of the economy are suffering from decreasing purchasing power.
The pandemic has heavily focused the attention of consumers around personal health and home due to lockdown restrictions. Personal health and wellbeing importance was already in the spotlight pre-COVID-19, thus, with current threats, this trend is expected to evolve. Stay-at-home and self-isolation policies are foreseen to have an irreversible impact on how consumers view their living spaces in the long term. Out-of-home entertainment and services are the ones losing the most from the trend shift, while the products and services aimed to make the living space more convenient are benefiting from COVID-19’s impact.
With various restrictions on physical retail and services as well as challenges, connected with leaving the home space, many consumers rely on e-commerce as the main means of goods’ consumption. An outperforming demand has encouraged business to respond accordingly and diversify. Many are setting up new logistical solutions, foodservice players are compensating by delivering groceries and other service providers are tapping into home delivery.
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