At this point in the COVID-19 outbreak, we’ve become acclimated to constant change: change in our work environments, social habits and daily routines. It seems like the far-reaching impact of COVID-19 has touched every facet of our lives, including our spending habits.
Shifts in consumer spending patterns
Our recently surveyed 451 Alliance members have made clear the effect that COVID-19 has been having on their spending habits. Nearly one out of three of our 451 Alliance members expect they would be spending more over the next 90 days than in the previous year. In sharp contrast, more than half (55%) expect they will be spending less over the next 90 days than in the previous year.
The impact of COVID-19 becomes even more evident when looking at respondents’ explanations for their decrease in spending: 67% of respondents said they will be spending less due to staying home more. In addition to staying home, saving more money (38%), decreased income or unemployment (30%) and decreased returns on investments (21%) were among the other top responses.
When consumers do choose to spend their money, they’re spending it in different ways: nearly four out of five respondents (79%) stated that they have shifted some (54%) or most (25%) of their in-store spending to online shopping.
What might these changes in spending habits mean?
Up until now, they’ve seemed like temporary changes in the face of an immediate threat; however, now that we’re in the final quarter of the year, this behavioral change could lead to irreversible economic transformation.
Many organizations are interacting with consumers exclusively through their digital presence due to COVID-19. The speed at which organizations have had to accelerate their digital initiatives has put even less emphasis on sustaining traditional brick-and-mortar stores, something that was already taking place before COVID-19.
Streaming services and food delivery services – A match made in heaven
We can see the importance of digital platforms across industries: consumers are spending more on takeout and delivery platforms than eating in restaurants, and streaming video services are more popular than ever while movie theaters remain shuttered.
With such a shift in consumer behavior, these organizations’ digital platforms are ripe for innovation. As this spending behavioral shift persists, expect more organizations to invest heavily in enriching the consumer experience in this area.
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