The COVID-19 outbreak is changing the way we think and behave. As revealed by the EY Future Consumer Index, consumer sentiment and behaviour across the US, Canada, the UK, France and Germany is evolving. But what consumer trends do we expect to emerge from COVID-19 and how will those changes affect the buying decisions we make and the priorities for retailers?
- The emergence of four distinct consumer groups
The survey of more than 4,800 people found that four distinct consumer segments have emerged. They are:
- Save and stockpile (35%)
- Cut deep (27%)
- Stay calm and carry on (26%)
- Hibernate and spend (11%)
At one end of the spectrum is the ‘cut deep’ group of consumers. They have been hardest hit by the pandemic, are most pessimistic about the future and are spending less across all categories. At the opposite end of the spectrum are the ‘stay calm and carry on’ consumers. They have not been directly impacted by the pandemic and are not changing their spending habits. On the fringe of this group we will also see the less financially literate return from a forced hibernation to spend with abandon. They are willing to access fast loans from online lenders i.e. Wonga and accrue debt on multiple credit cards to maintain their lifestyle if necessary. They are not worried about stockpiling their wealth.
- Attitudes to privacy and purpose are changing
Research carried out over the last two years has found that consumers’ attitudes to privacy and sharing their personal data are changing. As we start to emerge out of the pandemic, the research indicated that 54% of consumers would be willing to make their data more readily available if it would help to monitor and track the virus. When it came to the organisations consumers would trust with their data, 47% said they trust health care providers completely, followed by governments (28%), brands (17%) and media companies (16%).
- Consumers will reprioritise what they value most
33% of consumers will reprioritise the things they value most as a result of the outbreak. Status, which has previously been a priority, will recede and be replaced by purpose and social good. More than a quarter of consumers say they will pay more attention to what they consume and the impact it has, while others said that time would become something they would value more highly.
- Faster delivery will become a priority
According to Retail TouchPoints, 88% of online shoppers are willing to pay more for same-day delivery services, with most customers saying that same-day shipping shouldn’t cost more than 8% of the total purchase price. However, even with free shipping, consumers now expect delivery to be faster, with the maximum number of days customers are willing to wait for an item falling from 5.5 days in 2012 to 4.1 days in 2019.
How have your attitudes to consumer spending changed in response to COVID-19? Please share your thoughts in the comments section below.