As many have said, we are in unprecedented times. Much ado has been made about how consumer behavior may be changed forever. The fact is, most of us don’t know what consumer behavior looked like in March, or what it looks like now. To get this information, TraQline surveyed over 13,000 respondents to give a unique and representative perspective on the pandemic’s effects on current and future purchases. Because this is a monthly tracking survey, it allows us to continuously track how the economic and social unrest is affecting consumers and how they are dealing with social distancing and stay-at-home orders. This initial data highlights trends and behavior as they form, and will follow customer behaviors and trends next month and for as long as the pandemic and its associated shutdowns last.
In this initial wave collected April 1, 2020, 13,000+ respondents were asked questions about the following:
- Impact of the pandemic on their purchase plans of durable goods
- Impact on how they shop
- Impact on their employment situation
- Personal behaviors related to COVID-19 (i.e. self-isolation, receiving testing, etc.)
Consumers are delaying purchases due to COVID-19
Two-thirds of consumers are delaying planned purchases
As you are aware, March saw a drastic drop in consumer spending across nearly all retail categories. Those most likely to delay their purchases include women, lower-income households, and consumers under 55. Luckily, only 10 percent of those consumers report that they no longer intend to make that purchase, even once the crisis is over. This provides a strong indication that consumers see a light at the end of the tunnel, and do not expect the pandemic to disrupt their normal lives permanently.
Half of all consumers currently believe that life will return to normal by June or July. Unfortunately, the situation shifts nearly daily, so future surveys could show a shift in consumers’ views. One in five respondents answered “Don’t Know” in response to the question “When do you expect the COVID-19 crisis will be over”, which reflects the uncertainty that everyone feels as each day brings new statistics and procedures intended to keep people safe and healthy. Retailers and manufacturers should be at the ready for when consumers feel safe to engage with the economy again.
“Essential” items are more likely to be replaced or repaired if they stop working
While planned purchases are one thing, the survey also examined consumer behavior in a related scenario: what they plan to do if a product stops working. In an unexpected and potentially emergency situation, the majority of respondents say that rather than go without, they would either replace or repair a broken product. This would indicate that in such a situation, the pandemic would not be a key factor in their purchase decision-making process; at least not yet. There are some products more likely to be replaced than others, though.
In the event that they break, products that are strongly associated with convenience and
comfort are more likely to be replaced. This includes products such as hot water heaters, cell phones, and refrigerators. Consumers are more likely to do without those products that are deemed less crucial (such as barbecue grills or power tools) should they break. The situation is compounded for those consumers in lower-income households, who are more inclined to go without a replacement or repair until the crisis is over.
Home improvement projects get pushed back and Shoppers focus Online and Local
Impact on Home Improvement Plans
With lots of moving parts, and usually involving multiple large purposes, consumers are choosing to put planned Home Improvement projects on hold. While Remodelers and Home Designers had previously indicated that the ongoing crisis was of concern to their businesses, this data gives a new look at how consumers are dealing with the same precariousness. Given the complexity of home improvement and the uncertain end date for strict social isolation, it is unsurprising that many consumers are putting their plans on hold.
Online shopping and small retailers attract shoppers
With 42 states currently enforcing stay-at-home orders, as well as many experiencing a need to maintain social distancing, consumers’ shopping habits have shifted accordingly. Whether avoiding crowds, staying home to self-isolate, or simply being unable to shop in brick-and-mortar stores due to closures, 55 percent of respondents indicated they were somewhat or much more likely to shop online at this time. Additionally, 40 percent of consumers indicated an increased likelihood to shop in smaller stores, eschewing Big-Box style retailers. This should be an early warning indicator for Big-Box stores and an opportunity for smaller stores in the event this evolves into a permanent shift in behavior once the crisis has subsided.
Employment, self-isolation, and other consumer experiences
Consumers expect to return to their jobs post-crisis
At the time of the survey, 61 percent of respondents said no one in their household had been laid off or furloughed during this crisis. However, this is a very dynamic situation, with job loss results expected to be much higher now than originally anticipated. Unemployment is at an all-time high and record numbers of Americans are filing for unemployment insurance, therefore subsequent surveys will show even greater job loss. Despite this, consumers feel confident that those who have been laid off or furloughed will not be permanently affected by job-loss due to the pandemic and will be able to return to their jobs as normal when the crisis ends.
The majority of consumers are self-isolating
As previously mentioned, most local governments have requested that people self-isolate and practice social distancing. The majority of consumers indicate that they have done so. However, there is a significant minority (23 percent) who indicate that they have not yet started self-isolating.
Of those non-isolating consumers, 76 percent reported they would not self-isolate unless explicitly directed to do so. This gives a net impact of about 18 percent of consumers who are pushing back on the idea of self-isolating.
Very few consumers have been tested for COVID-19
At the time of fielding, only 5 percent of respondents said they had been tested for COVID-19 and 1 percent indicated they prefer not to answer. Of the 94 percent of consumers who had not been tested, more than half believe that they will be tested in the future. A small percentage (4 percent) of those who had not been tested indicated that they had sought testing but were unable to receive it. As time passes and testing becomes more widely available, levels of testing should increase, which will likely be reflected in the next wave of data.
TraQline Consumer Behavior and Market Insight
The COVID-19 pandemic has clearly impacted consumer behavior. Many have changed their purchasing plans, have or will make changes to their shopping habits, and find themselves in the midst of employment uncertainty.
When the economy opens back up, retailers and manufacturers will likely face two competing forces: pent up demand and potential economic uncertainty. While consumers may be ready to make delayed purchases, they may also have limitations depending on the degree to which the crisis has impacted their personal finances. Businesses recognizing this and providing the greatest support with respect to purchasing (i.e. deep discounts, delayed/interest-free payment plans) will find themselves in the best positions post-crisis.
A second wave of data and insights will be available in a few weeks to compare new sentiments vs. old. Until then, subscribe to TraQline updates or partner with our market research experts to stay attuned to these changes.