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PurpleBug Study - Consumer Purchasing Behavior Pre/During/After COVID-19 in PH

This report is centered around peopleu2019s purchasing behavior, taking into consideration the influence of the still ongoing COVID-19 pandemic. It includes the presentation of the results of an in-house survey done by PurpleBug, delving deeper into Filipino consumersu2019 purchase behavior and psyche as affected by quarantines and other pandemic restrictions. The report tackles into detail their spending habits, perceptions, and purchase channel preferences.

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PurpleBug Study - Consumer Purchasing Behavior Pre/During/After COVID-19 in PH

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  1. CONSUMER PURCHASING BEHAVIOR Pre/During/After COVID-19 A study by Copyright 2020 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  2. AGENDA CONSUMERS & COVID-19 Demographics Device & Internet Usage Online Purchase & Spending Habits Perception Towards Brands and Products Product Purchase Channels Preference of Purchase Channels Channel Preference Based on Product Categories THE NEXT STEPS

  3. “Humans respond to crises in different ways. When faced with an uncertain, risky situation over which we have no control, we tend to try whatever we can to feel like we have some control.” - Meyer (2020)

  4. RESPONDENT DEMOGRAPHICS Majority are Millennial Females. 629 responses were gathered via an online survey from May 7, 2020 to June 1, 2020. Majority of our respondents live in Luzon. Majority reported a Monthly Income Range of Php 10,500 and below. Copyright 2020 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  5. DEVICE & INTERNET USAGE PROFILE 515 respondents only have 1 mode of accessing the internet; for the majority of these people, the mode of choice is Mobile Data. 433 respondents access the internet through just 1 device; for the majority of these people, the device of choice is Smartphone. Copyright 2020 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  6. ONLINE PURCHASE PROFILE The preferred payment method of the respondents who are online shoppers is Cash on Delivery (COD). Majority of the respondents shop products online. Below are the reasons of the 18.12% who don’t shop products online. Copyright 2020 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  7. COVID-19 & CONSUMER BEHAVIOR The 629 respondents agree… ü…that brands can advertise amid the pandemic. ü…that prices and discounts are more important than the brand amid the pandemic. ü…that they now watch product reviews before buying. ü…that they now search brand information online before buying. ü…that they have bought products from a brand for the first time during ECQ because it supports frontliners during the pandemic. ü…that they have bought products from a brand for the first time during ECQ because it supports affected COVID-19 communities. Copyright 2020 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  8. COVID-19 & CONSUMER BEHAVIOR - ONLINE According to Boston Consulting Group (as cited in Hutchinson, 2020), younger consumers are more willing to shift away from physical shopping since they have grown up with digital shopping options. TENDENCY TO CHAT Among age generations, statistical evidence suggests that the Millennials and Gen Zs have the biggest tendency to chat brands on Facebook first before buying products from them. TENDENCY TO RESEARCH ONLINE In addition, Gen X, Millennials and Gen Z consumers tend to search for information online before purchasing products. However, Millennials and Gen Zs significantly do this compared with other age generations. Copyright 2020 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  9. COVID-19 & SPENDING CHANGES During a crisis, consumers tend focus on their health and well-being rather than indulge (Nielsen, 2020). Locally, COVID-19 has pushed the 629 respondents to spend more on necessities over electronics and other novelty products. According to Jones (2020), consumers expect that their household income will continuously fall as the pandemic progresses. Locally, majority of the respondents say that COVID-19 has significantly decreased their monthly income. Spent more Same spending Spent less Copyright 2020 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  10. COVID-19 & PURCHASE CHANNELS ON OCCURRENCE Statistical evidence suggests that there has been a significant decrease in the rate of in-store product purchase occurrence, before vs. during ECQ. COVID-19 and the local Enhanced Community Quarantine (ECQ) have pushed the consumers to make purchases in e-commerce channels such as social media and website. With the implemented restrictions in physical stores, consumers increasingly opt for safer, nonphysical stores (Nielsen, 2020); e- commerce is a considered alternative by consumers to buy the items they might have otherwise purchased in person (Meyer, 2020). 350 300 250 200 150 100 50 0 Website Social Media Mobile App Physical Store Before ECQ During ECQ Copyright 2020 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  11. COVID-19 & PURCHASE CHANNELS ON PREFERENCE Statistical evidence suggests that physical store is the least preferred purchase channel during ECQ; in contrast, it is noticeable that COVID-19 has pushed some of them to consider social media, website, and mobile app as alternative channels. Website and mobile app will likely retain the consumer share they’ve acquired during ECQ. 450 400 350 300 250 200 150 100 50 0 Website Social Media Mobile App Physical Store Before ECQ During ECQ After ECQ Copyright 2020 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  12. COVID-19 & PURCHASE CHANNELS ON NECESSITIES* Although preference for physical store has remained strong throughout the quarantine, notice that channel discovery for e-commerce has been significant. For health and pharma players as well as grocery items, the ECQ has become a catalyst for the consumers to discover the mobile app and website as new purchase channels. For fresh/frozen food items, social media had been the digital channel of choice during ECQ; however, both mobile app and website had received higher post-ECQ ratings. Purchase occurrence will likely be retained in these new platforms as well after ECQ. * The respondents have spent the most on these products during ECQ. Copyright 2020 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  13. COVID-19 & PURCHASE CHANNELS ON NECESSITIES* Although preference for physical store has remained strong throughout the quarantine, notice that channel discovery for e-commerce has been significant. During ECQ, with most establishments closed, consumers were obliged to purchase ready-to- takeout food via mobile app, social media, and website. Purchase activities had been similar for toiletries and baby products throughout the pandemic; consumers bought items via mobile app, social media, and website instead of the physical store during the ECQ. However, purchase occurrence will likely be retained only in mobile app and website due to the nature of these products and ease of payment. With the easing of quarantines, mobile app and website would most likely to retain their newly acquired users. * The respondents have spent the most on these products during ECQ. Copyright 2020 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  14. COVID-19 & PURCHASE CHANNELS OTHER PRODUCT CATEGORIES “Less priority” products had experienced a significant fall in terms of in-store product purchase occurrence during ECQ, but this would likely return once strict regulations were lifted. However, notice that these products have retained a consistent patronage rate on e-commerce throughout the ECQ. Consumer penetration rate for e-commerce will continue to rise. Consumers who purchased household items online for the first time during this pandemic, claim that they will shop online again in the next 12 months. -Nielsen (2020) Copyright 2020 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  15. THE NEXT STEP TENDENCY TO CHAT Among age generations, statistical evidence suggests that the Millennials and Gen Zs have the biggest tendency to chat brands on Facebook first before buying products from them. üFor Filipino consumers, the preferred device is Smartphone and the primary mode of accessing the internet is Mobile Data. In particular, the Millennials and Gen Z consumers who are on Facebook have the tendency to chat or search for online information before making a purchase. üYour websites should be optimized for mobile viewing with concerns on information coverage per page and speed. Moreover, it is important for all your company/brand information to be accessible and updated during this time of heavy internet activity. Copyright 2020 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  16. THE NEXT STEP üThe Philippines is still a cash-heavy country; e- commerce websites shouldn’t limit their options to strictly digital channels or this may hamper sales growth. üFilipinos will partake in online shopping as long as the payment method, “Cash on Delivery,” is available and the product doesn’t have to be felt or tried “on” prior to purchase. Copyright 2020 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  17. THE NEXT STEP “Majority of the respondents have bought products from brands for the first time during ECQ because they support frontliners…” “During a crisis, consumers tend focus on their health and well-being rather than indulge…” c - Nielsen (2020) üPosting and/or advertising online during a crisis is okay for brands, but messages should be tuned in with the needs of both the people who will consume the ads and those who are most affected by this event. This advice may be particularly useful for brands who get affected as consumer priorities shift to necessities-only; brand building may still be achieved to a measured degree. üFilipinos have a soft side for brands who are “self aware” and know how to navigate themselves amidst current events. Copyright 2020 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  18. THE NEXT STEP CHANNEL PREFERENCE PURCHASE OCCURENCE üChannel discovery for e-commerce has been significant in the Philippines during the pandemic. Although many Filipinos prefer shopping at a brand’s actual store, it is important that your digital assets can optimally work for you anytime a similar crisis arises. üConsumers tend to focus only on the necessities during a health crisis, and with physical restrictions being implemented as a consequence of this crisis, e-commerce channels gain significant traction. Copyright 2020 – PurpleBug,Inc. All rights reserved. Strictly confidential.

  19. EXTERNAL REFERENCES COVID-19: Entering a New Norm in Consumer Behaviour. Retrieved July 2, 2020 from https:// www.nielsen.com/sg/en/insights/article/2020/covid19-new-norm-consumer-beh aviour/ Hutchinson, A. (June 2020). New Report Looks at How COVID-19 Consumption Behaviors will Influence Gen Z Activity Moving Forward. Retrieved July 3, 2020 from https://www.socialmediatoday.com/news/new-report-looks-at-how-covid-19- consumption-behaviors-will-influence-gen-z/579940/?fbclid=IwAR3mp__o_LKz i1set_Q7EsO2NUwAXuBiaH4XMdVXPvt7LwO9SB87Q231_YE. Jones, K. (May 2020). These charts show how COVID-19 has changed consumer spending around the world. Retrieved July 2, 2020 from https://www.weforum.org/ agenda/2020/05/coronavirus-covid19-consumers-shopping-goods- economicsindustry/ Meyer, S. (2020). Understanding the COVID-19 Effect on Online Shopping Behavior. Retrieved July 3, 2020 from https://www.bigcommerce.com/blog/covid-19- ecommerce/#understanding-panic-buying-and-coronavirus. Copyright 2020 – PurpleBug,Inc. All rights reserved. Strictly confidential.

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