The coronavirus pandemic has changed our everyday behaviors and now, as lockdowns begin to ease for most, we’re experiencing yet more change. But, despite the changing context of our lives, we’re all still people with basic human needs – and we’re still consumers.
Every brand is asking the same questions:
- What activities will people return to and when?
- How will the aftermath of COVID-19 impact consumer behaviors and confidence?
This blog post is a collaboration with location advertising and analytics company, Blis, and reveals the answers to these questions by comparing what people say (in consumer research) versus what they do (in the real world).
In analyzing our respective research across five regions, (U.S., UK, Italy, Singapore, Australia), we found two significant trends:
- Cautious consumerism
- The thrift mentality
Despite people’s longing to return to normal, our combined data reveals people are approaching life with a new air of caution – both around returning to places and spaces and around their finances. We believe these two factors will drive consumer behavior for the next 12 months.
Consumers are still approaching a ‘return to normal’ with caution.
Our latest coronavirus research in most markets reveals the majority of people said they’d return to shops in a fairly short time frame. Blis foot traffic data broadly corroborates this, but the change isn’t happening uniformly, and it’s not happening overnight.
Blis noted Australian consumers want the quickest return to stores and venues. This may be a result of the country’s relative remoteness or how it’s responded to the pandemic.
In June, outdoor activities and food and drink venues across the country experienced a surge in visitors, reaching 86% and 64% of pre-COVID traffic, respectively.
In Italy, consumers are more likely to maintain their reduced selection of stores for routine behaviors like grocery shopping.
Once the epicentre of the pandemic, behavior here is still guided by extreme caution, and the week after lockdown was completely lifted, we still saw just 7% of pre-COVID foot traffic through stores.
According to our data, there seems to be a conservative mindset at large in Italy. Even though virtually everyone wants businesses to reopen as normal, few want to take the plunge themselves.
They’re even more cautious about returning to large outdoor venues.
Both indoor and outdoor venues remain a distance away from each other, with typically around half as many consumers saying they would return to larger public spaces in a quick time frame compared to shops.
The trend is more encouraging for large outdoor venues, with a stronger intent to return due to individuals having greater control of their immediate surroundings, as evidenced in foot traffic to these spaces.
Across all five countries, encouraging people back into these spaces comes down to reassuring them of sanitization and distancing measures. But beyond these core factors, consumer priorities differ between markets to quite a large degree.
Most prominent is the mandatory use of face masks. Our data shows some countries have a long way to go to move past the social stigma of wearing face masks. Almost 60% in Italy and Singapore say wearing facemasks is important, along with just under half in the U.S. But these figures drop significantly to as low as 12% in Australia and 25% in the UK.
They’re watching their spending.
With so much up in the air right now and economies on the cusp of financial downturns, the data paints a picture of a consumer who’s transitioning to a ‘thrift mentality’. This is shown not only by foot traffic statistics, but by consumer confidence figures.
Our research shows consumers are most likely to delay big purchases, cut back on day-to-day spending, and look for discounted versions of items. When we trend this data, however, we see the pattern of consumers cutting down day-to-day spending has slowed, while looking for discounted products has gone up.
So we may be seeing a gradual transition from financial rationalization to tentative spending. This is validated by the trend of consumers perceiving the impact on their personal finances – a climb between waves 1 and 3 of our coronavirus study, then a ‘steep-ish’ drop at wave 4.
Blis data backs up these perceptions with what we’re seeing on the streets.
In both the U.S. and UK, discount stores fared among the worst during panic-buying/stockpiling days of early lockdown.
Visits to these outlets picked up notably as people settled into holding patterns and were perhaps more inclined to rationalize household budgets.
In the U.S. Big Box sector, we saw retailers like Walmart ceding significant ground to budget store Dollar General, while in the grocery sector the discounter Aldi saw its share of foot traffic reflected the ebb and flow of panic buying amongst periods of relative stability.
Interestingly, when ‘survival mode’ temporarily kicked back in during the anti-racism protests, Blis data saw pharma retailers regain ground.
Trips to Dollar General receded, indicating that price isn’t everything when the circumstances are more extreme.
For big ticket items and conservative spending, however, Blis has seen the most UK foot traffic in electronics stores as opposed to DIY and home stores, indicating that, despite the thrift mentality, people are seeking to make their home environments more comfortable and liveable.
4 key takeaways for brands
There are many lessons to be drawn from our joint observations about what people say vs. what they do and the trend toward cautious consumerism. For brands looking to thrive as they enter the recovery period with an eye to stability, we recommend the following:
- Simplify and declutter. As consumers seek more control over their environments, brands should adapt customer experiences accordingly, whether that’s less cluttered store layouts or more seamless online-to-offline journeys.
- Combine data for the full picture. Marketers should use both sentiment and location data to map the pace of change and how confidence and caution differ by region, and to better understand priorities, needs and real-world behaviors to more effectively target consumers.
- Approach big purchase promotion with caution. Most homes are delaying big purchases and the family wallet has likely been hit hard, so approach campaigns for big tech purchases with caution and be aware of the attitudes that would need shifting to make this work.
- Keep your contingency plan in place. When campaign planning, brands should ensure contingency planning is put in place, if possible, and to prepare for multiple eventualities, in case of a second wave and further lockdowns.
Combining our leading survey data with location data like that offered by Blis helps you get the complete picture on your audiences – and answer the crucial question of whether intentions with match behaviors. With this view, you can adapt your strategy to meet your consumers with confidence you’re looking in the right direction.