Image by Erik Mclean
To state the obvious, this is not business as usual. We’re faced with a rapidly spreading global pandemic unlike anything we’ve experienced in our lifetimes.
We’re experiencing more and more constraints around how we live our daily lives with cities placed under lockdown, forcing non-essential businesses to close. Consumers are staying clear of public places as much as possible.
In this article we explain how consumer behavior has been evolving during the crisis so you can adapt your business accordingly.
Consumer behavior continues to evolve as the virus spreads
There are many physical, emotional, economic and governmental factors shaping consumer behavior in these uncertain times. Whilst every country is at a different stage in the evolution of the coronavirus pandemic, consumers typically follow a similar pattern according to Nielsen:
|Stage||Consumer Behaviour Change||COVID-19 Situation|
|1. Proactive, health-minded buying||Interest rises in products that promote overall health and wellness.||Minimal local cases of COVID-19 generally linked to international arrivals.|
|2. Reactive health management||Prioritize products essential to virus containment, health & public safety (e.g. face masks)||Government launches health & safety campaign. Community transmission of COVID-19 and/or first deaths.|
|3. Pantry preparation||Pantry stockpiling of long-life foods and a broader range of health & safety products. |
Spike in store visits.
Increased basket sizes & bulk buying.
|Small quarantines begin. Borders close more broadly. Accelerating growth in number of COVID-19 cases.|
|4. Quarantined living preparation||Increased online shopping.|
Decrease in bricks & mortar store visits.
Increasing stockouts & strains on the supply chain.
|Localised COVID-19 emergency actions. Restrictions of large gatherings. Schools & public places shut down.|
|5. Restricted living||Severely restricted shopping trips. Online fulfilment is limited. Limited stock availability impacts pricing in some cases.||Mass cases of COVID-19. Communities ordered into lockdown. Restaurants closed. Small gatherings restricted.|
|6. Living a new normal||People return to daily routines (work, schools, etc) but operate with a renewed cautiousness about health. Permanent shifts in the supply chain, use of e-commerce and hygiene.||COVID-19 quarantines lifted outside hotspots. Life starts to return to normal.|
Consumer behavior has been changing as consumers digest and process new information about COVID-19 and then make spending decisions based on that news.
For example, many of us have seen empty supermarket shelves first hand due to the stockpiling of essential grocery and health items. This has been driven by (self-fulfilling) concerns about supplies running out and our desire to reduce the frequency of visits to public places as well as the expectation of enforced lockdowns.
Social distancing measures and business closures mean consumers have been forced to change their behaviors in certain ways, whether they want to or not. For example, with restaurants closed in many areas, consumers have little choice but to cook and eat more at home. And in some good news for e-commerce retailers, consumers who previously felt uncomfortable shopping online are being forced to adopt it out of necessity.
Enforced business closures are leading to significant job losses, particularly in the retail and travel industries. In the US alone there were 9.9 million new jobless claims lodged in the 2 weeks ending 28 March. Significant increases in unemployment mean many consumers have little money to spend. In addition, those with jobs are often having to reduce their working hours and are becoming increasingly nervous about their own employment prospects and, as a result, are curtailing their spending.
Consumers are spending more time online but in different places
With more people choosing to, or forced to, stay at home it hardly comes as a surprise that there has been a significant increase in total time spent online.
However, whilst internet usage has shot up, it has not been spread evenly. Video streaming services like Netflix, Amazon Prime and YouTube have seen big increases in traffic.
The DE-CIX Internet Exchange reports significant increases in video conferencing traffic (up 50%), online gaming (up 25%) and social media networks (up 25%).
Across its clients Wordstream has reported seeing a 20% drop in traffic from Google search ads and a 15% drop from Google shopping ads but a 21% increase in YouTube and a 13% increase in Google Display Network traffic.
Facebook has reported a 50% month-on-month increase in messaging volumes on its Messenger and Whatsapp services due to the coronavirus.
These shifts in online usage present opportunities for you to reach new and existing customers on messaging apps, social networks, YouTube and Google Display Network.
Consumers are searching differently
As coronavirus is pretty much all we’re talking about at the moment it’s no surprise that we are searching more and more for information about the virus and its implications.
Whilst the volume of Google searches is down overall there are some e-commerce categories where search volumes have increased significantly.
Wordstream reports a 41% increase in searches for beauty and personal care, with products like soap and hand sanitizer proving the most popular. Home appliances, bedding and linen have seen search volumes up by 7%.
Google Trends is a great way to understand how people are searching every day. As the current situation is extremely fluid it’s important to keep a close eye on search trends to understand where opportunities might lie for your business.
Consumers are buying different products online
Initially, consumers spent up big on essentials – stockpiling groceries and health products to build up their pandemic pantries and medicine cabinets.
However, with many people now working from and/or spending most of their time at home, consumers have started to purchase more products that:
- Keep them and their families entertained
- Enable them to work productively from home
- Help them keep them fit and healthy
- Make them feel better emotionally
According to Attentive Mobile, trending products in the United States as at 25 March were:
Understanding and adapting to evolving consumer behavior is essential to ensure your business survives and thrives during and after the pandemic. You need to evaluate your product range and focus on those that are best likely to meet consumer needs. However, you’ll need to move quickly and be willing to change tack as behavior will continue to shift as the pandemic progresses.
Read Part 2 – How to adapt your marketing for the coronavirus era