UDC 330.

3 Economic sciences

CUSTOMER BEHAVIOR ALTERATIONS DUE TO

COVID-19 SPREADS WORLDWIDE

Batrakova Tatyana,
Associate professor at the Department of Finance, Banking and Insurance,
Zaporizhia National University,
Zaporizhia, Ukraine
Ishchenko Illia,
student of Department of Finance, Banking and Insurance
Zaporizhia National University,
Zaporizhia, Ukraine

Contemporary economic conditions have been generally admitted as unique and

unpredictable. Enormous spreads of COVID-19 worldwide have affected the entire
economy on its each level and segment, having been already claimed by IMF [5] as
even worse case than the former financial crisis 2008-2009 according to its actual
influence on economy and predictable subsequent negative consequences. Comparing
the pandemic impact and ongoing induced recession with different historical
economy turbulence periods, it might be reasonable to distinguish one of the most
substantial distinctions of actually happening crisis. Since 1 st months of emerging
virus outbreaks overseas and defending governments’ interventions of «lockdown»
procedures, one of the most influential economy factor have been slightly changing
over the period – The customer behavior model.

Key words: The customer behavior model, consumption, consumers’ expectations,

supply, confidence indexes.
 The customer behavior have been considered as one of the most demand-
effecting index by famous fundamental economists such as Joseph Schumpeter,
Herman Hossen and Abraham Maslow [3], on micro-levels and have been
importantly discovered by John Keynes Maynard by fully showing its macro and
micro correlative aspects affecting rage economy eco-systems[2].
Assuming differential points of views of mentioned scientists, it becomes
possible to maintain dominant element which is to change total consumption and
customer behavior model respectively. Confidence indices fluctuations have a strict
ability to provide dramatically changing macro-statements in total consumption and
investments. Despite of generally agreed dogma of direct correlation among GDP and
confidence indicators, nowadays there is quite a different situation in different
approaches orientated countries.

Graph 1 – built by author according to FRED, ACCA and IMF data[4,5,6]

Exhibited data shows fundamentally different customer approach and reaction in

contrasting economy regions what might be explained by contradiction in historically
and demographically developed customer behavior patterns. Faced data explained
developed for many years difference in consumer reactions on even such serious
factors as pandemic at the same time showing national ability to adapt. According to
late McKinsey global survey in 41 countries [8] maps constantly rising level of
consumer positive behavior in Asia region including India and China developing
economies in average on (54,5%). On the other hand, USA indicates (37%), while
advanced economy countries, such as France, UK, Germany, Spain and Italy display
only (16,8%).
Making following steps into customer behavior investigation, it is quite
important to discover households’ internal demand-forming intentions preferences for
future purchases (2 weeks after survey. Survey is dated 12 May 2020) into different
groceries categories. [8]

Graph 2 – households’ future purchases changes intentions by categories

According to the mentioned data, it becomes possible to distinguish such a different

pattern of customers’ behavior and purchasing expectations. Considering US model,
it works eventually based on two main sustainable theories of consumption, such as
“Giffen good”[1], “Maslow's hierarchy of needs”[3] and Herman Hossen’s utility
theory. In contrast, looking on Chinese customer preferences alterations, very
sophisticated model is faced. An average Chinese consumer, despite on being
affected by the most longest and serious pandemic outbreaks [7], decides to prefer
gasoline purchases approximately on the same level as groceries, continuing to
consume entertainments, gasoline and what is the most interestingly, to remain a
wiliness to buy jewelers which are according to the Macroeconomics theory are
taking into account as luxury-groceries. Conducting aforementioned data and
theoretical postulates, China’s economy actually dispose more positively, diversity
and flexible customers than US which model still able to be described by classical
theory.
Investigated misbalance and mounted in so unpredictable and quickly-emerged
conditions supply modeling changes are nowadays vary rapidly, being affected by
shortly-termed alterations of COVID-19 consequences. Thankfully of openly shared
data it is quite hard to predict the future customer preferences patterns today even in
short-term periods. However, it is possible to underline some of already developing
modifications.
First of all, despite of worldwide globalization, conducted investigation have shown
significant difference between customers’ rising approaches in different regions what
demand to use more demographically individual approaches to analyze micro and
macro economy statements of each country. Secondly, on so early stage of impending
after-pandemic crises, it might be mentioned generally developing US and West-
European’s households’ internal demand weakness which can negatively affect
worldwide trading balance according to previously high concentrated majority of
goods and services consumptions in those regions.
Concluding, there are two main aspects which have been already seen on so early
periodic and might have two main purposes of further situation improving:
- boosting money turnover by macroprudential government’ interventions
implementing advanced technologies into finance sector, trying to maintain and
accelerate dynamic consumption and supply retrospectively allocating assets and
credit into differential segments of economy
- Implementing flexible and agile approaches adopting each country economy and
motivating internal factoring, consumption and competitive exporting goods and
services. That, in turn, can lead to more rapidly worldwide customer behaviors
positive alterations into nowadays forming realities of post-COVID-19 pandemic
economical period.
References
1. Kosik, A. & Hrontkovska H. (2008). Microeconomika [Microeconomics]. Kyiv:
Centre of Educational literature [in Ukrainian].
2. Keynes, J.M. & edited by Mark Spencer (2017). The General Theory of
Employment, Interest and Money. Ontario, Canada: Brock University [in English].
 3. Heijdra, B. (2018). Foundations of Modern Macroeconomic. Oxford,
England, United Kingdom: Oxford University [in English].
4. Global Economic Conditions Survey: Q1, 2020 by ACCA (2020, April 7).
https://accaglobal.comRetrievedfrom:https://www.accaglobal.com/gb/en/professional
-insights/global-economics/GECS_Q1_2020.html [in English].
5. Global Economic Prospects Slow Growth, Policy Challenges by The World
Bank. (2020, January 27) https://www.worldbank.org Retrieved from:
https://www.worldbank.org/en/publication/global-economic-prospects [in English].
6. FRED. Consumer Opinion Surveys: Confidence Indicators: Composite
Indicators: OECD Indicator for China (2020, May 14).
https://fred.stlouisfed.org Retrieved from:
https://fred.stlouisfed.org/series/CSCICP03CNM665S?
utm_source=series_page&utm_medium=related_content&utm_term=related_resourc
es&utm_campaign=categories [in English].
7. EY. Future Consumer Index: How COVID-19 is changing consumer
behaviors (2020, April 16). https://www.ey.com. Retrieved from:
https://www.ey.com/en_gl/consumer-products-retail/how-covid-19-could-change-
consumer-behavior [in English].
8. McKinsey. Consumer sentiment evolves as the next “normal” approaches
(2020, May 12). https://www.mckinsey.com. Retrieved from:
https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/a-
global-view-of-how-consumer-behavior-is-changing-amid-covid-19 [in English].