Panic Buying, Product Substitution and Channel-Shifting Behaviour During Pandemic

Abstract

The present study attempts to investigate the impact of the locational restriction imposed by the government, restricted mobility of the people and supply disruption at the customer interface arising out of COVID-19 on panic buying, product substitution and channel-shifting behaviour of consumers. A questionnaire survey was carried out to seek responses from Indian consumers on the items representing the above components on a 5-point Likert scale. A total of 425 usable responses were analysed using the structural equation modelling considering locational restriction and supply disruption at the customer interface as exogenous variables, difficulty in accessibility as a mediating variable, and panic buying and product substitution as endogenous variables. Further, the channel-shifting behaviour of consumers was investigated for different channels across different product categories during the lockdown. The study reveals that supply disruption at the customer interface has a significant influence on product substitution and panic buying behaviour. It was also observed that there has been a significant decrease in the use of traditional retail chains for staple food items post lockdown. The insights drawn from the study are useful for managers in designing appropriate channel strategies when faced with disruptions caused by a pandemic.