Staying home during quarantine has felt like a free-for-all in regards to the amount of food we’re consuming, the amount of digital content we’re watching, and especially the amount of time we have to online shop – or is that just me? COVID-19 has struck the world with unprecedented circumstances but just as consumers do, they have shifted their behaviors to adapt to the new quarantined lifestyle. Let’s take a look into how consumer’s behavior has changed and how this will effect marketing strategies for a variety of businesses.
A Look Into How Consumers Are Shopping
Brick and mortar locations may be closed during this pandemic, but that isn’t enough to stop consumers entirely from making purchases. What this does mean, is that consumers have shifted their buying behaviors to adapt to the restrictions set in place for our safety, and some of these behaviors could continue in the future. Numerator even stated that in April, 90% of survey respondents have felt that COVID has impacted their buying behavior.
As the government slowly allows public re-openings, consumers will have a lasting taste for the conveniences experienced during their omnichannel shopping journeys. While the majority of consumers are willing to go in-store for essential goods, this confidence varies throughout different regions in the country. The northwest region of the United States is the most inclined region to make purchases, especially for essential goods. McKinsey & Company reported a 39% growth in users exercising the option of Buy Online and Pickup In-Store (BOPIS). In addition, of these consumers, 61% have stated their intent to continue this behavior after COVID-19. This insight gives retailers time to plan ahead while many stores remain closed, as these services should prepare to accommodate for a long-lasting level of demand. Luxury services such as delivery, curbside pick up, and buy-online-pickup-in-store (BOPIS) will continue to be a common preference for some consumers when phasing into the much-awaited, post-COVID times.
One of the positive impacts seen as a result of COVID-19 is the support shared throughout communities. This is a small ray of positive news for local businesses! In a survey recorded by IBM, out of 25,000 adults in the US, 25% expressed a new priority towards locally-owned stores and shopping for locally sourced products. The switch to different retailers during the pandemic is explained by consumers’ newfound willingness to try new brands or products and have shown a decrease in brand loyalty, perhaps in exchange for an emerging sense of community loyalty. Brands should be aware of this opportunity and ensure that ad spend is allocated towards high-funnel campaigns that could attract new customers.
What Consumers Are Shopping For That Will Leave A Lasting Impression
Over the past few months, stay-at-home orders have led many consumers to increase spending – specifically on products and services that enhance their new at-home routines. Groceries and household products are just a couple of categories that consumers have made a significant increase in spending since mid-March. In a report by Visual Capitalist, the second-fastest-growing product category is Bread Makers! Meal-delivery kits such as HelloFresh, Daily Harvest, and Blue Apron have been simplifying the process of cooking from home. User demand for this niche market has increased by 31% during the pandemic with a projected 50% consumer intent on continuing to invest in this service after COVID-19.
Consumers are practicing more conscious spending habits than before. Products like at-home workout equipment are an investment that will allow consumers to continue to exercise at home long after the stay-at-home orders are lifted. The fitness industry will likely see a decrease in gym memberships due to its inverse relationship with the consumer’s decrease in demand for these facilities. The industry could benefit from adapting to new platforms to provide services such as virtual instructor-led classes, or at the very least, work to improve health standard regulations.
Top Industries to Expect Long-Term Effects
Real estate has been fighting to stay fluid with the increase of digital solutions (i.e. virtual tours) to substitute in-person showings, although portals like Zillow and Redfin have seen a loss of website traffic by almost 40%. In addition to the significant decline of prospective activity, the supply of houses for sale is unquestionably lower in comparison to the previous year. Many consumers are not currently financially confident to take on such a large investment of purchasing a new property, regardless of low-interest rates. Many consumers will likely continue to hold off on purchasing real estate until the health of the economy and personal finances are more stable. Even though these issues are already raising concerns, the housing market has an average of 90 days or more to complete most acquisitions, which means we still have yet to see the full impact that COVID-19 will cause.
Regardless of stay-at-home orders beginning to lift, many consumers are still exhibiting a concern for large social gatherings. Several have stated that they are likely to avoid large crowds through the remainder of the year. This will have a negative impact on live event venues, travel, hospitality, and more.
As we look to the future beyond COVID-19, consumers are deciding what their first large purchase will consist of. Many hope to plan vacations that were more than likely canceled or postponed because of travel restrictions, while others are taking a more localized approach to future leisure.
In the coming months and remainder of the year, we will truly see the long-term effects that COVID-19 will inflict on consumer’s behavior and the diverse range of industries, as well. As we see public reopenings, the team at AVX Digital hopes that everyone continues to practice safe and healthy behaviors. Contact AVX Digital for more information on how COVID-19 could affect your business and how we can assist you during these times.