The Impact of Consumer Purchase Behavior Changes on the Business Model
Design of Consumer Services Companies over the Course of COVID-19
Javier Ramirez
Liberty University
BUSI 520: Strategic Marketing Management
Muriel Wilson
January 9, 2022
The Impact of Consumer Purchase Behavior Changes on the Business Model
Design of Consumer Services Companies over the Course of COVID-19
Consumer Purchase Behavior Changes During the COVID-19 Pandemic
According to disaster psychology, different psychological changes of residents
caused by different periods of emergencies make purchasing behaviors show distinctive
characteristics, such as panic buying behaviors, impulse buying behaviors, compulsive
buying behaviors and online buying behaviors. In the initial stage of the COVID-19 outbreak,
although only the individuals who experienced the event will be directly affected, the
negative emotions caused will be transmitted to the entire society through social networks.
The public is prone to irrational emotions, including anxiety and depression (Clauw et al.,
2003; Klitzman and Freudenberg, 2003). Public anxiety, especially in the face of a large-scale
pandemic, can easily lead to the spread of negative emotions (Hull et al., 2003). In addition,
consumers’ perception of uncertainty, scarcity, and severity and other psychological factors
will increase, causing customers to panic buying behavior (Omar et al., 2021). The specific
performance is to stock up on some necessities and reduce the purchase of non-essential
items (Roşu et al., 2021). The fear of out-of-stocks and supply chain disruptions brought
about by the COVID-19 pandemic will also increase consumers’ impulse buying behavior.
The worse consumers perceive the COVID-19 outbreak, the stronger their inner fears, and
the more likely they will lead to their impulsive purchases of health products. The COVID-19
pandemic has increased the perceived pressure of consumers, and some consumers are
accompanied by compulsive purchasing behavior. By increasing their buying behaviors, they
can relieve their inner anxiety and tension (Samet and Gözde, 2021). Besides, online
purchasing behaviors have become increasingly popular with consumers after the COVID-19
outbreak. In the face of the government’s home isolation measures, it has become more
and more common for consumers to use online shopping for food and other items. People
who are aware of the risks of going out are more willing to buy fresh food online (Lu et al.,
2021). Consumer purchase behavior is no longer limited by time and space, and consumers
use mobile tools such as mobile phones to achieve shopping freedom (Zhang et al., 2020).
Among the above-mentioned studies have carried out detailed research on a certain
characteristic of changes in consumer purchase behavior, but have not systematically sorted
out changes of the psychological characteristics and behavioral characteristics of
consumers. Changes in consumer purchase behavior are reflected in many aspects, not just
a single dimension of change.
The stimulus-organism-response (S-O-R) model reveals the influence of the
environment on individual emotions. “Stimulus” refers to any environmental factor that
causes an individual’s intrinsic response to the environment. “Organism” represents the
individual’s emotional state and cognitive process (Zinkhan et al., 1992). “Response” is the
individual’s response to the external stimulus (Hunt and Downing, 1990). In short, the S-O-R
theory states that external stimulus triggers people’s emotional and cognitive changes,
which in turn lead to different behaviors. Therefore, the COVID-19 pandemic as the external
stimulus will change people’s consumption psychology and hence their purchase behavior in
terms of purchase object, motive, place, timeframe, and method.
In terms of purchase object, the outbreak of the epidemic has made consumers put
forward higher requirements for products or services. When consumers face an emergency,
they choose problem-solving products or services over emotional healing products or
services (Yeung and Fung, 2007; Cai et al., 2020). Utilitarian products, as opposed to hedonic
items, are more effective in addressing consumers’ immediate needs (Yang et al., 2020).
Consumers caught in the pandemic would increase their purchases of utilitarian products
such as disinfectants, masks, and health foods. On the other hand, when people are under
pressure or are anxious about external threats, instead of directly addressing the issues,
they often activate a psychological defense mechanism—the cognitive and behavioral
tendencies that individuals unconsciously adopt in the face of frustration or conflict in order
to relieve tension and anxiety (Cramer, 1991)—to protect themselves (Baumeister et al.,
1998). The COVID-19 pandemic has triggered people’s psychological defense mechanism,
leading to more cautious buying. Consumers are not only more price-sensitive, but they also
demand higher-quality and more reliable products. In terms of purchase objects, consumers
pay more attention to the quality of the objects they buy. The increase in online purchasing
activities has also made consumers more willing to disclose their personal information (Gao
et al., 2020).
In terms of purchase motive, previous scholars can divide purchase motivation into
hedonic motivation, social motivation and utilitarian motivation (Voss et al., 2003). This
framework, which shapes consumer motivation for product categories, has been widely
used in the field of consumer behavior. In recent years, the application of new technologies
has become more and more extensive. Therefore, new media is used by more and more
people and brings more fun to consumers. Driven by hedonic motivation, consumers are
more keen on new media shopping methods such as Douyin and Kuaishou (Koch et al.,
2020). The contribution of social responsibility can improve consumers’ willingness to
purchase in advance (Tong et al., 2021). During the COVID-19 pandemic, many Chinese
companies have donated financial and material resources during the pandemic, which
helped build positive customer perceptions and attitudes toward their products (Yin et al.,
2019). Therefore, driven by social motivation, consumers are more willing to choose brands
that have contributed to society. In addition, consumers’ herd mentality makes them more
utilitarian in the process of purchasing goods, and thus more willing to choose products with
higher evaluation (Samet and Gözde, 2021). Driven by the above motivation, consumers
choose more and more brands of goods.
In terms of purchase place, the government’s home isolation measures have made
consumers’ offline shopping channels difficult, and their online purchases have become
more and more common (Zhang et al., 2020; Lu et al., 2021). Specifically, consumers have
gradually developed the habit of purchasing some daily necessities online. At the same time,
the rapid development of social media has brought more shopping convenience to
consumers. As a result, when consumers shop on social platforms such as WeChat (Larios-
Gómez et al., 2021), they are able to pick their favorite products more quickly (Ali et al.,
2021). As the number of consumers on social platforms increases, the number of consumers
in offline venues decreases accordingly. Although consumers’ offline purchasing activities
have decreased, consumers have become more demanding of offline shopping places. In
order to reduce the risk of infection, when consumers shop offline, they pay more attention
to the safety, convenience and goodwill of shopping places (Butu et al., 2020). As a result,
consumers have also changed significantly in terms of purchase place.
When it comes to purchase timeframe, advances in technology stimulate
consumers’ perception of the value of time. The new shopping habits that consumers have
formed during the COVID-19 epidemic have made their sense of time sharper than before
the COVID-19 outbreak. Consumers expect the fastest way to obtain goods and services
(Kyowon et al., 2020), improving their shopping efficiency. The development of Internet
technology and the wide application of mobile terminals have enabled consumers to satisfy
their desire to shop anytime, anywhere. Therefore, consumers prefer a shopping method
with unlimited time to purchase goods and less time-consuming in terms of purchase
timeframe.
In terms of purchase method, in order to avoid contact with uncertain external
services and reduce the risk of infection, consumers choose contactless delivery methods
based on safety needs (Larios-Gómez et al., 2021). Through the contactless delivery method,
consumers can effectively relieve their inner anxiety and smoothly maintain the order of
daily life.
Consumer Purchase Behavior Changes and Business Model Design
People’s fear and anxiety about the pandemic are unlikely to abate in the near
future, and the resulting changes in consumer demand might eventually damage the supply
chain performance of consumer services companies (Ivanov, 2020). These companies have
already been experiencing significant challenges with their existing business models due to
strict social isolation, delayed return-to-work, and disrupted logistics. The pandemic is
putting some major businesses to the test since consumers may not restore their previous
buying habits anytime soon (Pantano et al., 2020). According to the Expectation
Confirmation Theory, consumer services companies have to adjust their business models to
meet new customer expectations in order to obtain consumer satisfaction.
Changes in consumer purchase behavior under the COVID-19 pandemic have had
an impact on the design of novelty-centered business models. Novelty-centered business
models place more emphasis on exploiting new opportunities in new ways (Foss and Saebi,
2017), and their essence is to satisfy new customer value propositions, need or experience
through innovations in the content, structure or governance of the activity system. Although
the COVID-19 pandemic has led to a decline in consumers’ purchase power, the
requirements for product quality upgrades will not change. Changes in purchase object
drives consumer services companies to design novelty-centered business models. With the
improvement of consumers’ overall consumption level, the enhancement of consumption
power and the upgrade of consumption preferences, their satisfaction with standardized
products gradually decreases, and the trend of pursuing more diversified and personalized
products or services will continue. As consumer preferences increase in diversification,
companies must launch new products and price them appropriately in the face of a fiercely
competitive market, especially in the context of environmental uncertainty exacerbated by
the COVID-19 pandemic. Novelty-centered business models can bring customers better
products and experience through innovative methods on the basis of product technology
innovation.
When it comes to purchase motive, consumers prefer products from companies
with a reputable image or a strong sense of social responsibility. Branded products increase
consumers’ perceived usefulness (Bhattacherjee, 2001), which is precisely what novelty-
centered business models could accomplish. Therefore, consumers expect companies to
design novelty-centered business models. In terms of purchase method, consumers prefer
novel purchase methods and services such as mobile payment and contactless delivery. This
suggests that consumer demand for novel payment methods has not yet been completely
satisfied. People who get exposed to the same products or services repeatedly will
eventually get bored due to the diminishing marginal utility of overexposure (Line et al.,
2016). Bored customers will eventually feel less satisfied. Thus, consumer services
companies should adopt a novelty-centered business model design in order to re-establish
customer satisfaction. Moreover, consumers tend to favor a shorter purchase timeframe
and a safer purchase place, indicating their expectation to reduce perceived risks (Garaus
and Garaus, 2021). To meet that expectation, firms would be better served by novelty-
centered business model design. Therefore, changes in consumer purchase behavior have
led to the emergence of novelty-centered business models. In summary, the following
assumption is made:
H1a: Changes in purchase object facilitate the design of novelty-centered business
models.
H1b: Changes in purchase motive facilitate the design of novelty-centered business
models.
H1c: Changes in purchase place facilitate the design of novelty-centered business
models.
H1d: Changes in purchase timeframe facilitate the design of novelty-centered
business models.
H1e: Changes in purchase method facilitate the design of novelty-centered
business models.
Changes in consumer purchase behavior under the COVID-19 pandemic have had
an impact on the design of efficiency-centered business models. Consumer purchase
behavior is a process from information acquisition, formation of purchase intention to
purchase decision-making problem. Consumer purchase intention is an important factor
that determines the final purchase decision. And information is an important factor that
affects consumers’ purchasing intention and ultimately making purchasing decisions.
Generally speaking, consumers are risk-averse, so they will collect a lot of relevant
information before purchasing, so as to turn the uncertainty of purchasing a certain product
into certainty. With the rapid development of information technology, whether the
contradiction between the explosive growth of information and the limited attention of
consumers can be resolved has become an inevitable requirement for enterprises to gain a
competitive advantage. The rapid development of information technology also brings the
risk of personal information being infringed on consumers at all times in the transaction,
especially in the field of online consumption, the black industry chain of “stealing” and
“illegal use” of consumers’ personal information shows an explosive growth trend. Whether
companies can keep the personal information of consumers collected in business activities
strictly confidential has become a matter of close concern to consumers. Efficiency-centered
business models emphasize that enterprises can improve business efficiency by reducing
transaction costs, improving information transparency and sharing, and improving
transaction security. With this, information can be efficiently shared between customers
and enterprises, and the “information island” between the two can be reduced, so that
consumers can trust enterprises and generate purchase intentions.
In terms of purchase object, people are more rational in choosing what to
purchase. This increases consumer demand for efficiency in the products or services
purchased from consumer services companies. In this case, companies should choose an
efficiency-centered business model design since it emphasizes improving the efficiency of
business transactions. Customers are satisfied, and their expectations are confirmed when
they perceive that the efficiency of the goods or services exceeds the expected efficiency. In
addition, with regards to purchase motive, consumers tend to favor brands that are well
rated and contribute to society. Consumers perceive branded products as allowing them to
make the right choice more quickly. Efficiency-centered business models are consistent with
this consumer perception. In terms of purchase place, people prefer to shop online or on
social media platforms, highlighting their expectations for a safe and convenient shopping
environment. Efficiency-centered business models are essential for firms to meet such
customer expectations. As mentioned above, consumers prefer a shorter purchase
timeframe, indicating that consumers’ time efficiency expectations have not been fully
satisfied and the increasing need for consumer services companies to develop efficiency-
centered business models. In terms of purchase method, the fact that consumers have
become more favorable in mobile payment and contactless delivery reflects the growing
consumer demand for efficient payment and delivery methods. Hence, consumer services
companies need to design an efficiency-centered business model in order to increase
customer satisfaction. Therefore, in addition to novelty-centered business models, the
change in consumer purchase behavior has also created a demand for efficiency-centered
business models. In summary, the following assumption is made:
H2a: Changes in purchase object facilitate the design of efficiency-centered
business models.
H2b: Changes in purchase motive facilitate the design of efficiency-centered
business models.
H2c: Changes in purchase place facilitate the design of efficiency-centered business
models.
H2d: Changes in purchase timeframe facilitate the design of efficiency-centered
business models.
H2e: Changes in purchase method facilitate the design of efficiency-centered
business models.
