Americans’ Shopping Habits Evolve as the Pandemic Progresses

By Lindsay Frankel
Inside Subprime: September 17, 2020

As the coronavirus pandemic unfolds, Americans’ shopping behavior continues to shift. It started with efforts to stock up on groceries and supplies as stay-at-home orders were issued throughout the country. Sales of cleaning products, hand sanitizers, and certain foods skyrocketed in the early days of coronavirus news, according to Nielsen

In April, Americans began receiving stimulus checks in amounts up to $1,200 for each individual and $2,400 for married couples. While most Americans used the money to pay bills, buy essentials, pay down debt, or save for the future, many also splurged on electronics, video games, bikes, and new apparel. But that increase in spending died down once Americans ran out of relief money. 

Now, as we approach six months from the first stay-at-home order, Americans’ shopping habits are changing once again, and a few consumer trends have emerged. 

People Are Buying Locally-Sourced Goods

Prior to the pandemic, Americans were already beginning to see the value in locally-sourced products, and it’s a trend that has picked up speed. 56 percent of consumers report that they’re shopping in local neighborhood stores more often and buying more locally-sourced goods, according to a survey from Accenture. And the majority of Americans plan to continue both those trends, with 79 percent reporting they’ll continue to visit local stores and 84 percent planning to buy locally-sourced products long-term. 

This trend is partially explained by more people working from home and staying in their neighborhoods, but it’s also a sign of an effort among consumers to support suffering local businesses. 

People Are Diverting Their Vacation Savings to Luxury Goods

Two thirds of Americans have reported that they’ll wait to travel for at least three months after the pandemic comes to an end, according to The Harris Poll. Those who aren’t strapped for cash are finding new ways of treating themselves from the comfort of their own homes; expensive wines, artisan foods, and luxury skincare products have all become popular. 

Americans spent an average of $3,526 on dining out and $3,050 on entertainment in 2019, according to the Bureau of Labor Statistics. Since many Americans are opting to stay at home, those funds are freed up to use on other things. 

People Are No Longer Buying in Bulk

Costco saw a $1.5 billion sales jump in March due to consumers stocking up on items for their pantry. But the average shopping basket size has been on the decline in recent months. It’s still 11 percent larger than it was in 2019, but that’s far from its peak when the virus started. 

Nielsen Intelligence Leader Scott McKenzie said companies may respond with smaller sized packages, especially as cash-strapped consumers struggle to afford bulk products. 

People Are Adopting a “Do-it-Yourself” Lifestyle

More Americans are cooking at home, cutting and styling their own hair, and working on home improvement projects. Nielsen reports that in June, there was at least a 19 percent increase in sales on electric razors, pet grooming products, hair dye, and food preparation items. DIY meal kits are becoming popular as well; Hello Fresh saw their sales increase 122 percent in the second quarter of 2020 from the prior year. 

“Companies that can intelligently drive the discovery and learning of DIY behaviors, will succeed in empathizing with current consumer interest in creative, cost-conscious and safe consumption,” the Nielsen report reads. 

People Are Shopping Online

E-commerce sales are increasing in all product categories, according to research from McKinsey & Company. During the pandemic, most categories have experienced growth in their online customer base of more than 10 percent. And more people expect to continue shopping online, even after the pandemic has subsided. In particular, people plan to buy more groceries, alcohol, household supplies, personal care products, furniture and appliances, and over-the-counter medicine online. 

Many Americans are also relying on curbside pickup, delivery, and drive-through services more than before. While this is an attempt to adapt to the pandemic, it’s likely that the trend will continue. 

People Are Spending More Mindfully

Though the unemployment rate is steadily returning to normal, many Americans have experienced income cuts or job loss that will impact their annual income for 2020. Combine that with fear and uncertainty over the economic outcomes of the pandemic, and you’ve got a recipe for more cautious spending behavior. 

The McKinsey survey found that 40 percent of Americans are becoming more mindful of their spending, 31 percent are opting for cheaper products, and 21 percent are doing their research before making a purchase. 

In addition, there’s been a shift to essential spending, with spending on most categories declining as spending on groceries, household supplies, and home entertainment increases. 

People Are Expensing Food and Alcohol

Expense management company Emburse found that at the beginning of the pandemic, employees were expensing office supplies and electronics. Now, as companies make an effort to be more generous towards their remote workers, employees are expensing lunches and alcohol for virtual employee meetups. Between January and March, employees expensed an average transaction of $35.61 when ordering delivery from Uber Eats, GrubHub, Postmates, and Doordash. By May, the figure grew to $55.37. 

Will These Trends Stick?

It’s likely that many of the changes in shopping behavior will continue even after the virus is under control. Some of these consumer trends were already beginning before the pandemic, and others will stick around because people have grown accustomed to them. 

These new shopping behaviors are safer for Americans, both with regards to the pandemic and Americans’ financial lives. On the other hand, consumer spending drives the economy, and restrictive spending hurts its recovery. Many businesses will need to evolve to meet the new needs of customers in order to stay afloat. 

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