New research reveals the ways that consumer spending and behavior are being changed now and in the long term.
As lockdown measures begin to be eased around the world, the initial shock of Covid-19 is over. But the new phase we’ve entered has just as many challenges to face as the first.
Going from the reaction stage to the rethink and rebuild stage, businesses are now faced with a lengthy period to create new strategies for.
Despite the uncertainty that surrounds this time, consumers are giving some indication of how they’re planning for it and thinking about behaving within it. These indications are going to drive the most successful business strategies of 2020 and beyond.
To get a global perspective on how consumers are adapting and looking ahead, we surveyed 6,915 people across Australia, France, Germany, Singapore, Spain, the UK, and the US via their mobile devices. We also examined search data and looked to public online conversations (in English) across social networks, blogs, forums, and more to add context to our survey findings.
In this report, we’ll answer the following questions:
- What activities are people doing differently, and what will they continue to do once the outbreak is contained?
- What new priorities do consumers have? What factors have slipped down the list when deciding on a purchase, due to Covid-19?
- How have consumers adapted to buying particular items online as opposed to in-person? And will they continue to use online shopping for these items once lockdown measures are eased?
You’ll learn that:
- 44% of consumers think they’ll be spending less on holiday gifts and celebrations this year compared to last year
- 33% of consumers think it’s more important that the goods they buy are locally sourced since the outbreak of Covid-19
- 73% of new online clothing consumers say they’ll continue to shop for garments on the internet once the outbreak is contained
- And much more
Short term and long term changes to consumer behavior
In this section, we’ll look at two sets of numbers:
- The % of consumers who planned to do a certain activity in 2020 before the pandemic took hold
- The % of consumers who planned to do a certain activity in 2020 before the pandemic and that still plan to do the activity in 2020
At the beginning of 2020, the auto industry was in trouble. CNN reported: “The global auto industry plunged deeper into recession in 2019, with sales dropping more than 4% as carmakers struggled to find buyers in China and India. The pain is likely to continue this year.”
This was before anyone realized just how bad things would get.
Around 13% of our survey respondents had planned to buy a car in 2020 before the outbreak took hold. Now, just 58% of people who planned to buy a car still intend to.
The potential for a 42% drop in car sales could be devastating, especially when the car industry is so integral to the world economy.
Even the motoring enthusiasts are talking about buying cars less. On r/cars, where people discuss their dream cars, ask for advice on their current cars, and talk about what cars they might buy themselves, intent to purchase mentions were down 13% in March and April compared to January and February.
Leisure and travel
We also asked our respondents about their plans for booking or going on vacation, and whether they planned to buy tickets for festivals or gigs in 2020.
Pre-pandemic, 43% of respondents said they planned to book or go on a vacation in 2020. Post-outbreak, just 52% of those consumers still plan to.
Meanwhile, before the outbreak 22% of our respondents said they planned to buy tickets for festivals and gigs in 2020. Now, just 44% of them still plan to.
Again, these aren’t the happiest numbers. That said, for vacations, there are potential alternatives for big trips abroad.
Using our Consumer Research platform, we’ve found a recent increase in English-language mentions of staycations and camping, as people look closer to home when planning for the year ahead.
“Staycation” mentions in January – April 2020 were up 41% compared to the same period in 2019.
Camping is a particularly popular alternative to traditional vacations. In March and April, there were 375k social authors discussing camping plans as an alternative to a trip abroad. Meanwhile, hiking and backpacking are also key drivers of conversation.
The pandemic has got people looking longingly to the great outdoors, especially amid lockdown measures. But even the ‘alternative’ trips mentioned above may be restricted for a while, depending on the country.
When we asked people about changes they plan to make to their homes, the results were pretty similar even though the price points for each option are significantly different.
For our question about plans pre-Covid-19 outbreak, 18% of respondents planned to buy new furniture, 18% planned to do large scale home improvements, and 11% planned to move house in 2020.
Now the outbreak has taken hold across the globe, around 60% of people intend to go through with their plans.
- 63% still plan to do large scale home improvements in 2020
- 63% still plan to buy a new house/apartment in 2020
- 60% still plan to buy new furniture this year in 2020
Note: See our section on buying furniture online below – the popularity of buying these items may be dependent on lockdown measures being eased.
All this tallies with the social data we’ve gathered around how people are spending time in their own homes. March saw 86% more social posts about organizing the home than January did, while Marie Kondo has seen a boost in social mentions and Google searches. Interest in ‘DIY’ has also seen a similar increase, with people working on painting and fixing up furniture.
Google search interest in DIY has seen a lockdown boost
Source: Google Trends | Numbers represent search interest relative to the highest point on the chart (100 = peak popularity of term)
Especially if people continue to work from home and generally stay inside more, home improvement could be a theme that stretches a long way into 2020.
Clothes and shoes
What about smaller purchases?
Predictably, lots of our respondents had planned to buy clothes and shoes in 2020, and many of them are still planning on doing so.
73% of people who planned to buy new clothes or shoes this year still plan to.
Note: See the section below on consumers buying clothes online since the outbreak – many of them plan to continue doing so, even if they didn’t usually buy clothes online before.
This all makes sense. While bigger purchases are being put off, people are still planning to make the smaller (arguably essential) ones. Consumers have to keep themselves entertained, too. Back in April we looked at how those in the US were talking about spending their stimulus checks, finding thousands of posts about splashing out on purchases. Popular items included books, video games, and sneakers.
Another question we asked consumers around their future thinking was whether they planned to change job in 2020.
Before the outbreak, around 15% of our respondents said they were planning to switch the job they do this year. Now, 67% of those consumers still plan to, while 33% appear to have given up on the idea.
The proportion who still plan to switch roles is remarkably high given the tumultuous job market right now.
Of course, the picture is extremely mixed in terms of opinions around jobs, particularly as situations are different for everyone. But the last few months have certainly given lots of people time to reflect on what’s important to them, and perhaps what they want from the work they do.
Given all the change, working environments are never going to be the same again. Now that many have proved they can work from home effectively, employers may start to adapt their remote working policies. On social media, there are thousands of people talking about how they “really like” or “love” working from home, and women are talking about this more than men (57% of gender-categorized authors talking about enjoying working from home were from women).
What % of people who planned to do these activities in 2020 still plan to post-outbreak?
Now and next
Another way to look at how consumers of the future will act is to examine what they’re currently doing and what they think they’ll continue to do.
For example, we’ve all witnessed panic buying around various items in the last few months. Financial worries have also been rife. Hundreds of thousands of people are talking about and asking for advice on saving their money online, indicating a large-scale effort to build up a safety net.
But will this behavior continue?
Our survey found that 68% of those who’ve tried to save more during the pandemic say they will continue to do so once the outbreak is contained.
What % of people who adopted these activities under the pandemic will continue to do them?
Meanwhile, 41% of those who’ve been buying more household goods than usual amid the outbreak plan to continue doing so once it’s been contained.
The number is significantly less for groceries, which kind of makes sense – they tend to have a short shelf life.
Whether the consumers looking to save up their cash or stock up on household goods like cleaning products or toilet paper will continue to do this for years to come is hard to tell. But the data certainly points to some scarring on consumer behavior left behind by the panic of short supplies and job losses associated with Covid-19.
Toilet paper could continue to sell well for many months yet.
Something to look forward to?
Looking to the end of 2020, how do consumers feel about the holidays?
The results are a little depressing.
- 44% of consumers think they’ll be spending less on holiday gifts and celebrations this year compared to last year.
- 45% think they’ll spend roughly the same amount
- 11% think they’ll spend more than last year
Is the pessimism universal? Breaking the data down by country, there are definitely different takes.
Do you think you’ll spend more or less money on gifts/celebrations this holiday season compared to last year?
Germany and France appear to have the most optimistic participants of the countries we studied. They are most likely to say they think they’ll spend more, but the option is still very much in the minority. When we asked respondents if they had saved more money in the bank than usual since the outbreak of Covid-19, curiously, those in Germany and France were least likely to say they had.
Meanwhile, those in Singapore, Spain, and the UK were most likely to say they’ll be spending less this year. These countries also had the least people selecting ‘Roughly the same’ as an option.
These stats don’t tell the future. What they do show is confidence in the future, from consumers’ current standpoint. For most, it looks to be an austere year ahead.
Consumer priorities during and after the outbreak
Having looked at the kinds of behavior consumers might display in the future, we wanted to look specifically at consumer values and priorities.
For example, amid chaos, do our values change?
Have these factors become more or less important to you when buying things since the outbreak of Covid-19?
We’ll break our analysis of the above into moral concerns and practical concerns, although these are rough categories – it’s important to remember that all of these values interact with each other in different ways.
Consumers appear to be fairly split over sustainably/ethically sourced products. 19% think this is less important to them when buying things since the outbreak began, while 20% think it’s more important.
This will likely come down to personal circumstances and politics. As we’ll see below, a product’s affordability is an important factor for many consumers, particularly with the dismal economic forecast for 2020, and this could trump ethical concerns.
The delivery dilemma
Shoppers present retailers with a dilemma on delivery.
In the month of March, we found 19k mentions featuring concern about workers delivering non-essential items during the crisis.
But, as we’ll see further down in this report, they’re also demanding more from delivery – they want their goods delivered in a timely way.
The data doesn’t always show consumer consensus. It’s down to businesses to find solutions that align with their values and serve customers as best they can.
What about locally sourced products? According to our survey, 33% of consumers think it’s more important that the things they buy are locally sourced now compared to before the outbreak.
Use of the hashtag #ShopLocal has also jumped in recent months – there were more mentions of it in March and April 2020 than there were in November and December 2019 (Black Friday and holiday gift buying season).
There is a lot to unpack here, since a preference for locally sourced goods could be driven by a number of factors. Wanting to support struggling local businesses, like independent butcher shops, boutiques, or takeaway services, might be one reason to shop local, but politics could also come into it.
Let’s turn to more practical considerations consumers might have, like the money in their pocket or the types of product they might prefer.
36% of consumers, for example, think that it’s more important for a product to be healthy now compared to before the outbreak.
We also asked about the durability and quality of the products consumers want to buy. Both saw around 30% of consumers say that these factors are more important now compared to before the outbreak – around three times more than those who thought they were less important.
But, as we just saw on delivery, consumers are also prone to presenting businesses with dilemmas. While they want more healthy, durable, higher quality products, 28% of consumers also think that a product being ‘cheap’ is more important to them now than before the outbreak of Covid-19.
Delivering on all of these customer values might not be possible all at once, but by digging deeper into the nuance of who’s most likely to have a strong value, and what they apply those values to, can help businesses find a way forward.
Adapting to online shopping
In this section, we’re looking at online shopping specifically. Should online retailers expect the surge in demand to continue? And what kind of challenges could they face?
New online customers are loving the experience
Once again, we asked our survey respondents to tell us about how they’ve changed their behavior. First, we asked them about the things they’d bought online since the outbreak that they normally wouldn’t get from the internet.
More than 20% of our respondents said they’ve bought clothes, groceries, or toiletries and beauty products online when they normally wouldn’t have got them that way. That’s a significant jump in custom.
Have you bought any of the following online since the Covid-19 outbreak began, that you usually wouldn’t?
Furniture saw less customers talking about shopping online, which makes sense. Especially when making a big investment, it’s likely that people would want to see something up close and in store before they commit to the purchase.
Callback: Compare this to the data to what we saw above around consumers’ plans – 60% of those who planned to invest in furniture in 2020 still do. They’ll be keen for furniture stores to reopen as soon as possible.
Looking to the future, we wanted to know how many of these new online shoppers would continue to buy things online now that they’ve had the experience. Over 50% of new online consumers across all categories said they would.
The number is particularly high for those who’ve bought clothes online – 73% say they’ll continue to do so post-outbreak. Given that so many people are still planning to make clothing purchases in 2020 (see the first section), this is really encouraging for big fashion retailers.
Will you continue to shop online for these items once the outbreak is contained?
Online furniture sales, while smaller in number, have a high rate of customer satisfaction by the look of this. Over 60% of new online furniture customers say will buy online again.
The same goes for grocery customers, marking a potentially massive change for food retailers who could continue to see less footfall in store, and more online custom.
When there are issues, what are they?
All that said, the process of shopping online isn’t always totally smooth.
27% of the global consumers surveyed said they’d had trouble shopping online, and we asked them what that looked like.
The main problem we found was trouble with delivery. This tallies with social data we’ve found. Our Consumer Research platform found that people telling businesses they’d lost a customer because of delivery issues was up 51% in March and April compared to January and February.
There have also been issues with a lack of stock. Not only have people struggled to get the everyday things they need (like toilet paper, pasta, or hand soap), other items have become particularly coveted during lockdown. For example, we recently covered the highly successful Animal Crossing launch that meant it became difficult for many to get their hands on a Nintendo Switch.
When we broke down the data by age group, we found that those over 55 over-indexed for finding the process too complicated and worrying about the security of online shopping. For retailers hoping to retain their new online customers of all ages, digging into these kinds of pain points and concerns can help keep people on board for the long term (and not abandoning their carts in the present).
The story of this report is a mix of optimism and pessimism, of confidence and nervousness.
Some people are ‘sticking to their guns’, not adapting their plans for 2020 despite the virus. For others, their behaviors and plans have totally changed, and these changes could be permanent.
Now that brands have had time to react to the crazy few months we’ve had, the next phase we all face is rethinking and rebuilding, to make sure business can be done sustainably, and to make sure that customers’ new habits and needs are served.
The driver of the big decisions to be made in coming weeks and months, the thing that sets the course of a business, must be the voice of the customer.
Brands must evolve with the times and continually adapt to stay relevant in the “new normal”.