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How COVID-19 has affected spending habits.

By Jereme Sanborn on
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Shifting priorities based on needs.

Take a mysterious, potentially fatal disease, combine it with fear and enforced isolation, and what you are left with are profound changes in the manner in which consumers behave. During this unprecedented time, when the way people once shopped could now be dangerous, it is no wonder that customers now approach payments with an updated, more health-conscious point of view.

One unfortunate effect of the COVID-19 pandemic has been mass job loss. As a result of these layoffs, many consumers are now forced to economize, buying only necessities, while putting off the purchase of luxuries and other discretionary items. There has also been a marked tendency for customers to purchase large quantities of products such as bathroom tissue, over-the-counter medications, and pet food. This, of course, in an effort to keep from running out if there are ever breakages in the supply chain.

One survey showed that a sizable number of consumers (40 percent) have made permanent changes in how and where they spend their dollars. As a result, more than one-third of these frugal individuals have chosen to put their convictions into practice by purchasing less expensive products and brands. More than one-fifth of those have taken it one step further: Electing to take extra time to learn about other products and options before they make their purchases.

Changes to individual shopping categories.

In an age when many people are staying home most or all of the time, the internet has proven to be a vital ally when it comes to getting necessary shopping done. To meet the sudden upsurge, numerous sellers have stepped up to the plate, enabling their customers to have all manner of products delivered directly to their doors. In particular, Americans have embraced ecommerce sites for obtaining their groceries, household items, and even their beverages.

In addition, the nation appears to be focusing much more on items related to self-care and personal health. We are also gravitating toward stores that demonstrate a commitment to enhanced cleaning measures, social distancing, and physical barriers. The business owners who go the extra mile to protect the health and safety of their customers and staff during these difficult times seem certain to gain the long-lasting respect of shoppers and employees alike. For companies attempting to break even or make a wafer-thin profit, this loyalty might mean the difference between survival and bankruptcy.

Certain industries are falling into the red.

For many Americans, it was not until government-imposed restrictions went into effect that their shopping behaviors were radically altered. However, at least three-quarters of the consumers who changed their activities in compliance with the health crisis will only be ready to resume some semblance of their previous lives when a COVID-19 vaccine is developed and/or when strong medical guidance convinces them that the time is right. With Americans confined primarily to their homes and unable to travel freely both nationally and internationally as they once did, it stands to reason that a myriad of sectors have felt some rather serious financial ramifications. In addition to the hospitality and travel industries, numerous restaurants may never be able to rebound from the months of enforced closure and limited service that the pandemic has caused.

An absence of customer loyalty.

In normal times, business owners strive to earn the repeated business of consumers. They use strategies such as in-store promotions and frequently feature sales and rewards aimed at customers who visit or order regularly.

Now that the coronavirus has changed people’s buying habits, retailers have been forced to quickly pivot their customer incentive strategies. Since what was once effective now no longer works, merchants are shifting toward adopting online marketing campaigns and rewarding site visitors who complete purchases with incentives to make a second product buy in the near future.

As the virus continues to affect national and international supply chains and limits consumer choice, two-thirds of customers are electing to be more flexible when it comes to the brands of products they will accept. Although they may not get exactly what they want, they are rewarded by affordability, access to similar items, and the convenience that comes with getting something close to what they had originally preferred sooner, instead of having to wait a longer period of time for their original choice.

An increase in online purchases and deliveries.

Seemingly overnight, online and mobile have become the consumer shopping methods of choice. Using a computer or smartphone to order items and arrange for contactless delivery promotes health and safety and allays fears of catching the virus. It even allows consumers to search multiple sites to find the products they need.

Thanks to the availability of ecommerce options, Americans now have more control over when or if they leave their homes. At least at this point during our battle against COVID-19, many people have decided to restrict outside trips to only the most essential. Others are opting to stay local for the most part, only exiting their home space for occasional shopping trips, or special family events.

Perhaps the most disturbing characteristic of the broad effects of the pandemic has been the general uncertainty it has wrought. On the most basic level, none of us knows when or if we or someone we love is (or will become) infected. We don’t know if or when we are contagious for COVID-19, how to determine our own safety, and when we can resume regular activities. For business owners in particular, the stakes are frighteningly high, leaving entrepreneurs guessing at a seemingly infinite number of variables.

While many questions remain, one thing seems clear: The COVID-19 pandemic will forever change the way we learn, work, socialize, and shop. The merchants who succeed during this challenging time will be those who are nimble enough to rapidly respond to changes, while listening to the wants and concerns of their customers.

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