SoundOut/Columbus Consulting survey 21,300 consumer survey reveals how consumption attitudes and habits have changed dramatically.
We live in extraordinary times.
Conflicting indicators are suggesting everything from global economic meltdown and a 10 year depression to the biggest economic resurgence ever witnessed since the start of time.
SoundOut and Columbus Consulting have conducted a wide ranging survey with over 21,000 UK and US consumers during April 2020 to understand how the consumer is being impacted and how their attitudes and habits have changed since before the pandemic.
By way of background, consider the following:
30 million US jobs have been lost in the past 6 weeks alone, this represents 1 in 5 people or almost 20% of the entire US working population. The overall US unemployment rate is now at a staggering 23%, up from just 3.4% earlier this year.
Data is plentiful but often confusing: for instance the reported mortality rate from Covid 19 is just 0.1% in Singapore, but 14.6% in Belgium.
Vast swathes of the global economy from airlines, entertainment, hospitality and retail to oil and automotive are now zombified or on life support. No-one knows when any of them will open again for business, and if the demand will be there when/if they do.
US Government financial intervention is already twice as high than in the banking crisis of 2007/8. To put that into context, the $2 trillion injection announced so far (and this is just a start) would be enough to finance the complete rebuilding of every single US hospital 3 times over. (728,000 US hospital beds @ $1m per bed construction cost)
Perhaps most inexplicably, in this time of unprecedented economic destruction, US stock markets continue to roar ahead and are officially back into bull market territory (a 20%+ gain over the past 6 weeks). They still expect a rapid rebound.
And we are only at the beginning. SoundOut models (based on daily reported deaths and a 1% mortality rate) suggest that as of today around 7m Americans have contracted the virus (2%), which means that 98% are still at risk - but many states are already actively relaxing the lockdown. With herd immunity for Covid 19 kicking in at around 70% of population infection, a second even more economically destructive wave appears inevitable.
So how does any business make sense of this tsunami of data and understand the medium term outlook for their organization? One approach is to look from the other end of the telescope and, rather than focusing on headline numbers, examine what consumers are really thinking and doing. This is going to dictate how the consumer recovery, when it eventually emerges, is likely to unfold.
In partnership with Columbus Consulting, the leading retail business consultancy, SoundOut has run a huge study with 21,300 consumers in the US and UK markets during April 2020 examining how consumer mindsets have changed since the onset of the crisis.
• The study was split into 4 separate surveys all run across the SoundOut 3m consumer panel across the UK and US:
Fashion buying intentions
Changes in lifestyle
Each survey was over a 3 day period and then repeated 2 weeks later to determine how attitudes had changed.
The detailed results by territory and demographic are available on request by contacting SoundOut email@example.com but in summary, highlights are as follows…
There is a high level of consistency in responses regardless of location, age or gender. This suggests that changes in attitude are consistent across the entire population and there is little benefit to be gained by segmentation or micro targeting of consumer marketing campaigns.
The detailed results of the second repeated surveys showed almost no variance with the first surveys (typically <2% within all demographics) suggesting that through the month of April consumer opinions/behaviour was essentially static.
Consumers are placing far more emphasis on value than they did before the crisis, suggesting that it is having a big impact on people’s buying habits. Almost 80% of consumers are valuing the things they buy now more than they did before.
There is a major shift in people focusing on only buying what they need rather than buying what they want: 67% of consumers are now focusing on needs not wants and only 23% of consumers report that their buying habits have not changed.
34% of consumers expect non-food retailers to continue with ‘normal’ service during the crisis (price, choice, customer service) while at the same time 28% expect retailers to demonstrate ‘solidarity’ with their customers to help them through the current crisis.
69% of consumers intend to continue to buy products made in China going forward with 31% intending to buy either less or none after the crisis is over. However there is greater antipathy in the older age groups with 26% of under 25s reporting they would reduce their purchase of products made in China but 44% of over 40 year olds reported that they would reduce or avoid purchases.
Unsurprisingly 41% of people are being much more careful with their money with a further 31% being slightly more careful. This equates to over 70% of people across all ages and genders tightening their purse strings as a result of the current crisis. However, it is likely that the massive government stimulus provided to the newly unemployed is providing a major cushioning influence at this time.
Fashion buying intentions
Fashion retailers will continue to experience a significant reduction in demand during the lockdown period with 23% of consumers reporting that they will not buy any fashion items during this period. A further 49% will buy ‘very few’ and only 21% will buy the same as before lockdown.
While volumes will be significantly reduced, demand for casual wear is likely to represent the strongest category with 33% of consumers indicating that this would be their most likely purchase. 19% cited activewear as their priority with only 12% likely to buy fast fashion (13% female, 11% male) and only 8% expecting to buy anything smart.
Looking at other products, sports/activity is likely to be the category most in demand (23% overall but 32% for males). People will be doing a lot of reading (20%) with females intending to focus their discretionary budget on beauty (26%). Interestingly it is females that are likely to spend most on DIY (19%) against males (16%) who may be too busy working out…
The good news is that, following lockdown, the bounce back could be relatively swift. 64% of consumers say they will be able to afford new fashion items within a month of lockdown ending (30% immediately). A further 24% expect to be purchasing fashion within 3 months with only 13% expecting to wait 6 months or more.
Unsurprisingly online non-food shopping habits have changed materially with over 70% of consumers reporting increased use of online shopping. 29% report significantly increased use of online for non-food shopping since the lockdown began.
In terms of shopping locally, 21% report an increased use of local physical retailers while 53% say their local shopping habits have not changed. However there is a material age bias with 32% of over 40’s increasing their use of local stores with only 18% of the under 25’s doing the same.
There is a significant demand for home delivery with 53% stating this as their preferred option at this time. The UK in particular favors home delivery (60%) and the over 40’s (55%) believe this is the best option at this time. Click and collect is preferred by 15% in the US but just 8% in the UK.
41% report increased use of social media for shopping, with Instagram being the main beneficiary as 19% of consumers increase their purchasing through the platform (out of the 64% who use social media to shop). Facebook is faring less well, only enjoying an 8% bump in purchasing. Females are turning to Instagram, Facebook and Pinterest in greater numbers than males.
Changes in lifestyle
Use of makeup is showing a dramatic reduction with 47% of females ditching the morning make up routine - this is particularly prevalent in the under 25’s.
Almost 60% of people report doing more DIY at the moment – with the older generation being particularly active (67% > 40 years old vs 58% <25 year old).
Encouragingly 64% of people are reasonably relaxed about the prospect of another 3 months lockdown while 18% are ‘very apprehensive’ and a significant 19% report being ‘totally freaked out’. Overall, the UK population is dealing better with the lockdown than the US – possibly due to the clearer government guidance and leadership.
Almost 75% of people have concerns about their future finances with 27% being either ‘very concerned’ or ‘terrified’. Males appear to be materially less concerned than females…
Almost 80% are now using social meeting apps (Houseparty, Zoom etc) to keep in touch with friends and family with almost 30% using them at least once a day.
Finally – people are cooking more with 37% of respondents reporting cooking more meals from scratch and 25% baking more. On the flip side 21% are eating more junk food (US) and 16% (UK).
The detailed results by territory and demographic are available on request by contacting SoundOut firstname.lastname@example.org