six shopping trends that will continue post pandemic
What you’ll learn:
- Consumer confidence and optimism are on a good trajectory, but don’t get too far ahead of consumer sentiment because there’s still a lot of anxiety and stress out there.
- Six shopping behaviors consumers say they’ll continue post-pandemic.
- Why there was such a big decline in brand loyalty in 2020 - and what you can do about it!
Verde Consumer Behavior Report - april 2, 2021
Welcome to the consumer behavior report: cognitive dissonance edition. Lots of reports were filed this week around consumer confidence, trends and buying. Are you sitting down? Because the news is good! Most indicators show consumers are optimistic and spending.
But as we all know, in order for good to exist, there must be some not-so-good, as well. Anxiety around health, job security, and personal finances remains an emotionally resonant factor.
Consumers confidence soars
Consumers are feeling good. According to The Conference Board, a nonpartisan, member-driven think tank and research group, consumer confidence in March 2021 reached the highest levels since the start of the pandemic.
The Consumer Confidence Index is at 109.7, up from 90.4 in February 2021
The Present Situation Index (measuring consumers’ response to existing market and labor condition) is at 110.0, up from 89.6 in February
The Expectations Index (measuring anticipated market conditions for the short-term future) improved to 109.6, up from 90.9 in February
Overall negative assessments of market conditions were down, and sentiments around the job market were up.
These sweepingly positive consumer sentiments can likely be attributed to increasing vaccination rates, decreasing lockdown measures, and the most recent round of stimulus payments. But it’s not all entirely rosy. Income expectations are still tight.
15.5% of consumers expect their income to rise in the next few months
13.3% expect their income to decrease
There’s still anxiety out there
Deloitte also released its most recent State of the Consumer Tracker (gauging sentiment in February 2021). Overall:
Consumer anxiety is down, but not out (as compared to January 2021 and the general trajectory of the past year)
56% of people remain concerned about the health and wellbeing of their immediate groups, but that number is down 5 percentage points from January
48% are concerned about their own health and wellbeing (down 5 percentage points from January)
Consumer spending was up 2% in January over December 2020
Spending on durable goods was up 17.1%
Despite the optimistic trajectories and the declining anxiety around COVID, financial and employment stress is very real.
47% report their anxiety is due to financial stress, including palpable worries about paying urgent bills like rent/mortgage and credit cards
38% are delaying large purchases due to uncertainties
28% attribute their anxiety to their employment situation
The post-pandemic predictions are rolling in
Get down with your bad self, McKinsey & Company! As we all place educated bets on which pandemic-inspired behaviors consumers will continue post-COVID, McKinsey just went ahead and asked them!
Consumers intend to:
Keep buying online
Despite a third and fourth quarter drop, overall online penetration among retail categories with (generally) high online penetration was at 48% in January 2021. That’s 11% above pre-Pandemic rates in those categories.
Continue restaurant curbside pickup
Continue utilizing digital health and wellness tools/options
Continue significant investments in their homes
28% did some sort of remodeling or home improvement work last year
19% changed their living situation
30% plan to continue spending on home improvement post-Pandemic
START spending money outside of the home
30% expect to spend more in restaurants, out-of-home entertainment, and travel
Continue to seek new brands based on value, values, and convenience
40% of shoppers report changing brands (i.e. decreased brand loyalty) in 2020. This is compared to 20% in 2019.
Convenience and value are the primary drivers to try new brands for all ages
40% of younger consumers also prioritize quality and values alignment
Small brands “are increasingly driving growth in late 2020 and early 2021.” McKinsey doesn’t distinguish precise numbers in this realm, but does indicate a shift away from the large brands that dominated the early part of 2020.
Our Take: These consumer confidence trends are being reported at the same time scientists and the CDC are urging caution that we’re not out of the woods yet. Increasing vaccination rates are certainly driving a lot of the optimism, though the overall numbers are still quite low. There is legitimate concern that easing social distancing, mask requirements, and other safety measures may cause another spike in the infection rates and we’ll start the same pattern again.
From a messaging and communications point of view, brands still need to be highly conscientious that nearly one-fifth of consumers are experiencing job and fiscal insecurity. As we publish this, overall vaccination rates are in the low 20s. The majority of people are still concerned about their own health and the health of their loved ones.
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