Post COVID Era: Consumer Behavior Shift in Travel & Automobile Industry
Consumer behavior shift is not easy to achieve.It takes a lot of effort and strategies for any organization to make a shift in consumer demand even by an inch. However, a major shift in buyer’s needs has been observed due to COVID-19. The recent situations have accomplished something which sellers could not. Covid-19 has made a considerable impact on almost all industries and that impact is generated all of a sudden.
Corona-virus, in the past few months have axed salaries, incentives, appraisals, bonus, and even jobs of over 122 million people operating in different industries. The nationwide lockdown in March’20 lead to the shutdown of the public transport for a considerable span of time.
The needs of consumers in the post covid-19 world will be affected on the basis of factors like their income, their outlook towards hygiene, their willingness to spend and their perception. On the basis of these factors, consumers can mainly make the decisions when it comes to transportation.
People were at home for a brief period of time during lockdown. The situation continued to exist for months which affected Indian consumer sentiment and it has made an impact on consumer’s behavior on the travel & transport industry as well as the automobile industry.
Since unlock 1.0, as the country prepares itself for its three-phased reopening plan, many people were compelled to travel for work. People who used public transport or private taxis like Ola-Uber in the pre-COVID era, are now preferring to travel using their own vehicle than any shared transport for safety concerns.
Depending upon the income limit & affordability they are leaning towards buying their own four wheelers. Users with a comparatively low income and seeking avoidance of public transport may seek two wheelers as a solution for their daily commute.
Consumers can also prefer to buy second-hand-vehicle instead of using their limited purchasing power to buy a new one. This decision may help consumers to keep a check on both their personal hygiene and their pocket.
There will be certain consumers with a perception of “Why own when you can borrow?” and may prefer to take cars on rental and subscription basis, say a few months or a year, or maybe consider leasing options.
Impact on Travel Industry
Dangers and lack of sources to travel undoubtedly made the travel industry the first prey to the virus; costing numerous companies a loss of both people and capital, with wounds that will take a considerable amount of time to heal.
Even after the unlock 1.0, there are no signs of nonessential travel or tourism due to the fear of infection during travel. Hence it can be predicted that the situation for the travel industry will not improve any sooner.
Impact on overall Automobile Industry
Pertaining to probable conditions, a number of major giants in the automobile industry such as Bajaj auto and Hero MotoCorp have started their retail operations. Various Auto companies are also planning to line up their delayed launches. Banks also are contributing by decreasing the interest rates to increase the purchasing capacity of consumers in order to enhance the demand for the overall industry in general.
Even though retail stores have set up new standards of operating and have been trying to minimize the touch points for safety; both the consumers and workers are still concerned. It can be difficult for automobile giants to shift to a complete online sales model since at the end of the day; customer may need to visit the dealership for its final checks.
Impact on Two wheeler Industry
There has been a surge seen in the entry segment two wheeler sale. In addition to the demand for new bikes and scooters, the pre-owned two wheeler sales are growing. approx. 40% of those who inquired about our products in the after ‘unlock 1.0 month’ were keen on the purchase.” However, this uptake may be slow over the next 5–6 months indicating cautious optimism.
Also, there could be a situation where some prospective car buyers may shift their purchase to premium bikes.
Impact on four wheelers Industry
Since four wheelers are considered safer in terms of hygiene and more comfortable as well. Hence people with stable incomes may incline towards purchasing a car. This will give a boost to the entry segment vehicle sales.
However owning a car at this time may lead to enhancement in the upkeep cost, there is a fair chance that the buyer who could have shifted to the higher variant during non-covid times may settle for the lower variant.
Impact on Rental Industry:
This shift in the demand has led to many rental companies to change their primary target customer segment from tourists to local employees who want to avoid public transport. Business offerings are also tailored to this new customer segment. companies like zoomcar in 4 wheeler segment & Ridobiko in 2 wheeler segment who used to provide rentals for trips, Travel & tourism have come up with affordable & more efficient offerings like monthly rentals & quarterly rentals to accommodate this consumer behavior shift. Two wheeler rental companies like Ridobiko who used to observe, ~95% of booking ranging between 1 Day — 7 Days in pre-lockdown era, are observing ~80% of their total bookings are monthly rental bookings post lock down.