The coronavirus global pandemic has overhauled many aspects of our daily lives – and the same is true for consumer appetites. Businesses are fighting hard to keep up with drastic changes in what their customers want. Insyt’s Josh Casey lays out exactly why – and how – they’re doing it.
Home is where the focus is
Nationwide lockdowns have become a part of normal life across the globe, as governments battle to stay on top of the virus. So, while many industries are struggling and overall consumer spending has plummeted, some are reaping the rewards of this new focus on life at home.
Sales of DIY supplies, paint and new furniture in the UK increased by up to 25% year-on-year as people sought to improve their surroundings while living and working at home.
The home entertainment industry has enjoyed a bump too. For example, according to consumer research company Nielsen, video game playing time in 2020 was up by 28% in June compared with March so, even while spending is dampened overall, many retailers and manufacturers of home electronics are faring rather well as consumers reapportion money they’d saved for that holiday abroad.
Virtual is the new reality
The way consumers make purchases has also shifted considerably, and it’s probably here to stay.
Even after emerging from Lockdown 1.0, the use of cash in August and September was below half normal levels, according to the Institute for Fiscal Studies. They also found online spending for goods that would normally have been bought in person had jumped by more than a quarter since March. This trend towards online payments had existing before the current pandemic but its marked acceleration is proving to retailers just how important their virtual presence is.
The value of good value
As well as moving online, consumer spending has slowed overall due to the economic uncertainty surrounding Covid-19. So, with belts tightening everywhere, it seems there’s never been a better time to offer moneysaving promotions, free gifts or special offers. According to the Selligent Global Connected Consumer Index, more than half of all consumers now favour value for money and temporary perks over past brand loyalties, with fewer than one in ten citing this as the main driver of their purchasing choices.
That said, some brands are still successfully pursuing a brand loyalty and identity strategy that’s paying off. Distinctive furniture company Loaf, who have seen their trade holding up well during the pandemic, are doing this particularly well by providing value to their customers largely outside of financial incentives. For example, their newsletter reads more like a lifestyle magazine than a sales pitch – featuring puzzles, regular giveaways and competitions. In return for baking furniture-inspired cakes or answering questions via social media, Loaf give away various prizes from either their own stock or on-brand partners.
With consumers being more mindful of their purchases, many are now more wary of spending big without some sort of safety net. This is especially true in one of the industries worst hit by Covid-19 – travel and tourism – where consumers expect to be able to cancel or postpone without it costing them anything. The same culture is seeping into other areas too, it seems. Selligent’s Index showed that more than four in five people are looking for try-before-you-buy schemes so they can claim refunds if they decide to renege on their purchase. It’s indicative of consumers’ desire to make sound decisions on where they spend their money in times of uncertainty.
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