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Recent Survey Says: Yes They Are!
Despite the three largest metropolitan areas being on virtual shutdown, consumers are still buying. We just received results of a survey conducted by one of our research partners this past Thursday, March 19th. The survey asked 500 people nationwide a series of questions on the Covid-19 virus. Here are the highlights:
- Nearly one in five consumers is optimistic about the situation. 9% think the virus will start to decline in 30 days or less and 17% said they expect their spending to return to normal in 30 days or less.
- 38% of respondents believe it will take 1-3 months until the virus incidence starts to decline.
- 72% believed the virus will start to decline in six months or less and 67% expect their spending to return to normal in that same time period.
Overall, current consumer spending seems to be much more stable than circumstances might suggest. Respondents were asked about spending plans in 24 product categories. (Note that spending on dining out and out of home entertainment were not included – only included was spending for goods or services enjoyed in the home – which may be benefitting somewhat from lack of out of home spending opportunities.) Overall, across all 24 product categories, the average percentage reporting same spending on a category was 62%, the average percentage spending more on a category was 9%, and the average percentage spending less on a category was 25%.
The top three categories with increased spending were: (Note percentages do not reflect change in spending level – they reflect the percentage of respondents indicating they increased or decreased their spending in that category.
--> Grocery and Gourmet Foods (41%)
--> Health and Personal Care (30%)
--> Pet Supplies (18%)
The three categories with highest reported decreased spending were:
--> Automotive/car (40%)
--> Clothing/Accessories (38%)
--> Beauty/Luggage and Travel Accessories (tied)( 31%)
Consumer purchasing is said to drive about 70% of American economic activity. If consumers keep spending, our economy will bounce back from the impact of the Covid 19 virus in the next couple of months. Here are some reasons to remain positive and to be ready to bring operations back up to normal quickly:
- Although some sectors will suffer greatly (restaurants, airlines, hotels, resorts), others will enjoy some of that loss (grocery stores).
- If the effects of the virus continue into the summer months, expect less vacationing and more “staycations” with more emphasis on spending on the home (and remember that Lowes and Home Depot remain open nationwide and they deliver.)
- Although some stores in some areas are closed, most are still open nation-wide. Costco, Walmart and Target sell a lot more than just groceries and they are open for business in all departments.
- Walmart is currently seeking to add 150,000 associates to keep its shelves stocked and registers working. Dollar General has reported they are hiring up to 50,000 workers in the coming weeks. CVS Health will fill thousands of jobs across the country. And companies like Amazon (adding 100,000 jobs), Kroger, and Trader Joe's are also hiring. Most retailers seem to have increased their sales advertising.
- In some home goods categories, online purchasing is as high as 30-40% of total purchasing. Expect this to increase because the more consumers are stuck home. The more they are online searching for recipes, cleaning solutions, etc., the more they will be exposed to product ads on Facebook, YouTube, Instagram, etc. with direct links to manufacturers’ online stores. If you aren’t using these vehicles to sell direct you are missing an important opportunity.
We don’t see this as a time to cut and run. We see it as a time to invest in maintaining your market position by supplying consumers and retailers with the goods consumers are demanding now. This is the time to buy market share through all your activities. And despite all that is happening, this is also the time to keep an eye on tomorrow. The demand for new products is never ending and your pipeline won’t benefit from a gap. Let us help you keep your pipeline going with lots of great new product ideas!
We will share survey updates as they become available. Please don’t hesitate to contact us if we can be of service in these difficult times!