The impact of Coronavirus is being felt throughout society, and businesses are having to reevaluate, replan and respond to the changing economic climate.
Concerns about the spread of COVID-19 and the outlook of the economy are having dramatic effects on consumer confidence, which saw a significant decline in March 2020. This is being felt by the majority of UK businesses, with surveys suggesting that as many as 69% are experiencing a drop in demand for products and services.
Here we highlight some of the key insights into how consumer behaviour has changed, and the impact this is having on different industries around the world.
Changes in consumers’ lifestyles
People’s day-to-day lives have changed significantly in the past few weeks. The top 5 most popular activities during the UK lockdown are watching television, which 56% of respondents have reported doing in the past 24 hours, while 36% have used streaming services and 28% have played video games. The study by Maru also found that 25% of people have been exercising and 16% had spent time shopping online.
Surveys also show 50% of people are spending more time online than they did before the lockdown. There has been a huge increase in searches for ‘home body workouts with no equipment’, ‘home meditation tips’, ‘home self-care’ and ‘homemade bread recipes’ – including a 4,400% increase in searches for yeastless bread.
It appears that the public are trying to make the most of what they already have in their homes. They want to be more self-sufficient and less dependent on supermarkets, whose stock has been unreliable recently due to panic buying.
Downturns in spending
The uncertainty of COVID-19 has caused many consumers to pause their long term and high ticket spending plans. We might be approaching the summer season, but surveys show that 70% of the UK population are not planning overseas holidays and 66% are not playing domestic holidays at the moment.
Feeling the pinch, it appears many are no longer treating themselves with extra goodies, either. Mindshare UK reports that 51% of respondents are no-longer planning to splash out on luxury items, and 45% are not planning to purchase any new clothes for the time being.
This is reflected in online fashion sales, which have taken a 30% fall. Even purchases for the home are falling, as 47% of respondents said they were definitely not making significant purchases for their home.
How brands are responding
If there’s one thing that is clear, it’s that customers are keeping a close eye on how brands are responding to the pandemic. And they do want a response. Only 8% of consumers think brands should stop advertising during the corona outbreak while nearly two-thirds of consumers have stated that a brand’s response will have a “huge impact” on how likely they are to buy their products.
But what kind of reaction are they hoping for? Around half of consumers think that brands should communicate in a carefree and lighthearted way. It has been an extremely stressful time for many, and it seems consumers want an escape from the negative news cycle. So even though there have been huge changes in purchasing behaviour, consumers still expect to hear from brands.
The crisis does offer an opportunity for businesses to increase exposure and share of voice while competitors are more likely to be quiet. The lesser competition on ad platforms means media prices are also lower than is usually expected, so brands can effectively get more for their money with advertisements on platforms like Facebook, Instagram and Google.
While there may be a tendency to reduce marketing spend to protect short term profits, any brand that maintains or even ramps up marketing communications throughout this period will increase their share of voice in the market, and will reap greater rewards once the lockdown is lifted.