How consumer spend and habits are changing
COVID-19 has brought a lot of uncertainty into our lives, and it has highlighted how important it is to make decisions quickly. Consumer behaviours are shifting dramatically, many retailers and manufacturers have already faced a huge hit which can be extremely damaging for some businesses. This applies particularly to retailers who are selling non-essential items, who, have been forced to close their physical stores. Will this shift a lot of sales online in the future?
No more cash
Reports from LINK, the operator of the UK’s biggest network of ATMs, says cash usage in Britain has fallen significantly, by around 50%, over the past few days and payments have shifted to contactless payments to prevent the risk of spreading disease. In recent news, the UK are to raise the spending limit for contactless card payments on April 1st, according to UK Finance.
Currently, supermarkets have seen a dramatic increase in sales, and are facing a lot of pressure to satisfy demand, both online and in store. The BBC have revealed that on average people have bought 5 days of extra groceries, which resulted in a £10.8 billion record of grocery sales and a 22% increase in alcohol sales. Nielson data shows that consumers have been added ‘a few’ extra items into their shopping basket each time they visit a store, and they are visiting more frequently, for example, household cleaning products have seen a 65% increase in sales from this time last year and personal care products such as vitamins have all been in demand to try and boost consumers immune systems.
Charities in danger
However, this is having a detrimental effect on charities and food banks as people aren’t leaving the house to donate food and are panic buying and bulk buying products. Research has indicated that charities are forecast to make a £4 billion loss.
Home furnishings opportunity?
In addition, non-essential items have taken quite the hit as people are scared to spend money that isn’t essential. Depending on how long lockdown lasts, we will begin to see a shift in this pattern. As people become used to their new routines and staying indoors – there will be a greater need for certain non-essential items, especially anything that is essential to being quarantined. For example, an increase in sales for exercise equipment and home furnishings are said to increase as they are keeping you entertained and helping you create a happier and most positive environment.
Further in-roads for e-commerce
Additionally, traditional brick and mortar stores that do not currently trade on the internet will be looking for alternative ways to make sales, for example, restaurants. During this time of crisis when they have been forces to close, they are encouraging purchasing from home – many restaurants that didn’t deliver or offer take-out are now giving you that option. Ensuring that they are still making trades. The BBC have said that 503 million meals will be prepared and eaten at home every week for the foreseeable future – which is quite a dramatic increase.
Throughout this period eCommerce will increasing grow, demand for different products will change and consumers will begin to get into a new routine. COVID-19 could have massive adverse effects for brick and mortar stores, after you have made three or four purchases of the same or similar products it becomes a habit – which makes it rather hard to escape from. Therefore, post-virus there could be a lot of difference as to how consumers shop.
Inevitably, COVID-19 has had a massive impact on how consumers are reacting to purchasing products, which can be particularly stressful for businesses. However, in the up and coming weeks consumers will start to feel the need to begin making non-essential purchases.
For further updates and information, including how COVID-19 lockdown is shaping future consumption habits subscribe to our newsletter and keep an eye out for our future blogs.
Emotional Logic is a research agency specialising in behavioural insights and works with brands, charities and public sector organisations to understand motivations and shape future behaviour.
Get in touch today if you want to know how your consumers are reacting.