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Economy

Firms must adjust to low consumer incomes — survey

A customer shopping at a supermarket. PHOTO |
A customer shopping at a supermarket. PHOTO | JEFF ANGOTE | NMG 

There is need for manufacturers to adjust their products to accommodate the new consumer environment that reflects low incomes following coronavirus outbreak, a new study says.

It shows Kenyans' purchasing power has shrunk since the onset of Covid-19 related hardships.

Over 84 percent of consumers, said the report, faced income uncertainty adversely impacting on their household budgets while 40 percent were financially vulnerable.

Only 30 percent were optimistic of a financial rebound within the next three months while the rest said normalcy would be restored in the next six to 12 months.

The study Understanding the New Normal Consumer was conducted by marketing agency Scanad.

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“Understanding this new context is crucial for brands keen on maintaining customer loyalty and keep demand for their products rising,” said Scanad chief executive officer Sandeep Madan.

Lockdowns and cessation of movement orders had also been blamed for the decline in economic activity within key commercial hubs thereby hurting Kenyans ability to fend for themselves, especially in the private sector.

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, says the study.

“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 Mr Madan.

While Covid-19 affects every single person on earth at the same time, those in C-suites experienced a disruption in their lifestyles while low income group faced a never-before life threatening moment.

“Marketers are dealing with a new breed of consumers, but brands should take responsibility to lead and serve as opposed to capitalising on the existing crisis. This calls for them to act beyond communication, serve new needs and maintain brand momentum,” said Mr Madan.

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