logo

Will Consumer Shopping Behavior Change For Good?

Will Consumer Shopping Behavior Change For Good?

The marketing and advertising industry have long embraced the study of consumer behavior. Right now, as the COVID-19 crisis unfolds, behavioral observers are getting a new look at how rapidly and unpredictably consumer behaviors can change.

The New York Times reports that the global health crisis has caused the sharpest decline in consumer spending in living memory. They shared some sobering charts based on data from Earnest Research, which tracks credit and debit card spending. And it’s not just spending that has been disrupted—the entire customer purchase journey is in disarray.

Buying Now and in the Future

Consumer purchasing is currently all over the place. Between locked-down pandemic hoarding and panic-buying, and the shift to digital buying to try to bypass out-of-inventory stores and online sellers, consumers are making it up as they go along. Brands are being forced to respond in kind, which is never a good thing.

Curbside grocery pickup boomed for a few weeks, but random product shortages caused shoppers to move to online buying. That, too, trended down as fulfillment by Amazon Prime’s two-day shipping commitment backed up, and ordered items were left out of deliveries.

It’s not just how we’re buying, but what we’re buying that seems to change weekly. Runs on toilet paper and disinfecting products have shifted to longer-term products like no-touch faucets, mobile-controlled door locks, water filtration products and yes, bidets. We’re also seeing spikes in shelf-stable canned and packaged goods, which had long trended downward as people sought organic, natural and fresh products. With the Easter/Passover/Ramadan season, there was a spike in indulgences. (Cue the Reese’s Peanut Butter Egg hoarders…) Every day seems to spur new consumer obsessions.

That said, we’re just at the beginning of the coronavirus-driven shift in consumer behavior. There is a strong likelihood that at least some behaviors will disappear after we emerge from government shelter-at-home orders. Expect sit-down restaurants to to do a whopping business (where they are able to reopen) as people celebrate being freed from home lockdowns… but will tables be more spread out, or plastic shields be added to diner booths? How soon will people return to movie theaters, concert arenas or Broadway, and will new allegiances to streaming and gaming services become permanent? Will the cruise and travel industry recover fast, slowly, or at all? What about theme parks, if people are still worried about touching rides and sharing space with large crowds? Will brick-and-mortar retailers, already struggling before the pandemic, shift entirely to online retail? Will sharing services like AirBNB and Uber become pariahs because sharing anything is now deemed a choice of last-resort?

What will replace the things we enjoyed B.C. (before coronavirus) in the world A.C. (after coronavirus)?

Essential Services, Not Just Products

Mark Wilson of Fast Company wrote about “quarantine UX,” discussing how the shutdown of the economy is driving rapid shifts in user experience and a need to rethink how brands serve customers. It’s not just a matter or redesigning customer experience, but also looking at how we deliver services (think mobile app delivery of doctor visits, or the rise of interior decorating through virtual consultation).

A new McKinsey consumer sentiment report suggests consumer behavior is not merely being reduced. While many people are pausing or delaying discretionary purchases, many are also adopting first-time purchase behaviors, from buying online, to trying curbside restaurant pickup, to moving to streaming entertainment channels and online tools like Zoom. Many of these behaviors will become permanent, speeding shifts away from traditional buying behaviors.

Brands should not depend on the COVID-19 crisis guaranteeing consumer loyalty once the crisis has passed, however. The true test will be how well brands deliver customer support and satisfaction. Lacking those, consumers will easily move to competitive services, or revert to old behaviors. Brands need to think more about nurturing customers, and finding ways to keep them once they have them.

Long-Term Economic Impacts

The devastating economic downturn that is part of the COVID-19 crisis will also cause major changing in spending behaviors, as many people will greatly reduce discretionary spending out of sheer necessity. At least a proportion of those people will discover that items they once deemed must-haves aren’t all that essential after all. Still others will take pride in making the things we buy last longer, simply because we’ve had to make do with what we already have for several months. Food waste (we hope) will be reduced, because home-bound cooks are discovering the benefits of meal planning and using up leftovers to save us from extra trips to the grocery store. There may even be a boost in home gardening because of episodic food shortages; learning to live more sustainably would not be a terrible thing.

Another outcome is that many people are taking steps to increase savings during the crisis out of fears about a lengthy recession or even a depression. The most alarmed about finances, according to a mid-March Harris Poll for personal finance app Tally, are people who identify as GenX, Gen Z or Millennials; nearly 60% of millennials said they’re taking steps to preserve cash because of the pandemic. Overall, 45% of all age groups are conserving cash.

We’re now a bit over a month into widespread US shutdowns, and we can only speculate about long-term effects to the consumer psyche. But we can say with some certainty that the economic effects will be deep and harsh for many people on the lower end of the economic spectrum. Brands, marketers and their agencies will have to adjust for changing behavioral and economic impacts, and should develop plans for several eventualities as we emerge from shutdown and try to return to some semblance of normality.  Be sensitive to consumer needs and wants, strive to add value, and work to build better customer service and support networks.

Consumers have a lot to worry about right now, and well into the next year as the COVID-19 crisis evolves. Brands that stay on message, on mission and are seen to provide value and stability will do better than brands that stumble around looking for a reason to exist. Consumer confidence is cautiously optimistic, but has taken a pretty good hit. How the crisis continues to unfold will impact on consumer confidence and behaviors.

All of that means advertising and marketing industry players, from brands to media to ad agencies, are going to have to be more agile and responsive than ever before. Understanding how our clients’ products and services can fit into and offer value to customers is critical. Start thinking now about what you can do to help clients plan for and move to the new future, A.C.

Comments

0 comments
Please to use this feature.
Comments for website administrator (optional):