Consumer behavior continues to shift as states continue to re-open from COVID-19’s shelter in place mandate. With this shift, we are all getting a front row seat into how consumers are responding to stepping back into public settings, large and small.
Reports are publishing weekly on the evolution of the consumer, and in this week’s Consumer Behavior Pulse, a weekly feature in SIA’s First Tracks Newsletter published in tandem with the Channel Mastery podcast, we break down the most relevant information and trends for specialty brands and retailers.
The first study is from McKinsey & Company, a management consulting and research firm. The second is from Deloitte Insights, a research firm that has been conducting biweekly surveys to measure consumer anxiety and spending through the COVID-19 pandemic.
McKinsey & Company conducted a global survey series across 42 countries tracking consumer sentiment through the crisis. Their latest article published on June 5, Consumer sentiment is evolving as countries around the world begin to reopen, identifies six trends in how consumers are adapting to a lift in restrictions and pockets of spending. This is a global report, but the trends directly speak to consumers in the United States.
- Despite pockets of reopening, consumer optimism has decreased, and most consumers continue to expect a long-lasting impact from COVID-19.
- As incomes have declined, consumers are spending on essentials and limiting spending on discretionary categories.
- Consumers are shifting to online and digital solutions and reduced-contact channels to get goods and services. This is magnified for Gen Z and millennials, and for higher-income consumers in the United States.
- Even though many countries have lifted stay-at-home restrictions, most consumers still feel the pull toward a “homebody economy”.
- Consumers want extra reassurance to resume day-to-day activities outside of their homes.
- Consumers also want to see an ongoing emphasis on cleaning and safety.
(NOTE: Regarding points 5 and 6 above, please make sure to listen to the SIA Town Hall from Thursday, June 4, with three on-snow resort operators. In this Town Hall, you will learn about how on-snow operators are preparing for business in the upcoming winter season.)
The report also mentions that many consumer trends resulting from COVID-19 – specifically online fitness and wellness classes and apps, store curbside pickup and, and physical telehealth – are likely to continue to grow post-pandemic.
SIA Take: Change is slow and consumers need more reassurances in place – that it is safe and their financial situation is stable – before they resume normal, pre-COVID life. It also appears that some conveniences that came out of COVID, like online fitness classes and curbside pickup, will continue post-pandemic. This is an important insight as it underscores the opportunity to serve your consumer today with virtual and digital resources. Doing so will build brand loyalty and trust, which very well could help them engage with you IRL (in real life) in the coming months.
Deloitte Insights shares a more positive view of the current economic situation in, Small positive signs in the consumers’ dual-front crisis. This report states that the “road to recovery may be opening, but only slowly.”
The duel-front crisis they refer to is conflicting feelings of personal safety vs. those of financial well-being. A few highlights from the article includes:
- Though economies around the world are in various stages of reopening, consumers will likely not come back until they feel it is safe to do so, both physically and financially.
- Health concerns are still outweighing financial concerns. This sentiment will have to shift before we see spending on more discretionary items increase.
- One of the more significant observations from the study is that more consumers are feeling safe going to the store, staying in a hotel, and taking a flight.
- Across the countries surveyed, nearly half (47%) of respondents said that they feel safe going to the store – up from 35% a month earlier. It suggests that retailers’ safety precautions have helped and that consumers are adjusting to the new normal.
- Consumers have also slowed their net spending intent on less discretionary items in the last several weeks. Deloitte connects this to consumers having stockpiled necessities and maintaining their levels.
SIA Take: The big take-away from this report? Work to not only create clearly understandable safety measures being taken by your business, but also, communicate them clearly to your audience and stakeholders (your workforce is your primary stakeholder group). The perception of safety is only as strong as the action you’re taking and how you communicate it. Think about frameworks and understandable systems; people feel safer when they know they are stepping into a well-thought out process that they have read or viewed before they’ve physically encountered. This report underscores the positive trend that consumers are beginning to feel safer going to the store, and even staying at a hotel or taking a flight – which can only translate to good things for our economy.