2020 is Not What I Imagined.
Most consumers in our country have entered week five of the COVID-19 reality and things are not getting easier. No one could have imagined even a few months ago a year turning out like this one.
If you had asked any American consumer last year what they would expect in the year 2020, nobody could have expected the year we have already had — a global pandemic and a looming recession the likes we have not seen in generations. Alas, the new reality is here and all of us are trying to make some sense of it.
To help us understand what is going on, we have been working closely with Carrie Shea and Mary Cooper, from IRI Growth Consulting, to deliver pulse check reports on the current sentiment and concerns of the American consumer. This week, we see concern regarding COVID-19 continuing to increase, but it appears to be nearing a plateau. Concerns are starting to shift from worries about one’s own personal safety to worries about the larger community and the economy overall.
Pulse check on April 9: Fearful, but slowly adapting to the new reality.
Rasto Ivanic, GroupSolver: Looking at the trends, on average, the concern is flattening out. But we are still seeing the “extremely concerned” numbers creeping up. Carrie, you have hypothesized that this may be geographically dependent.
Carrie Shea, IRI: My hypothesis would be that as the virus has moved more towards the center of the country and into smaller towns and away from the coasts, more people are feeling the concern as it gets closer to their doorsteps. I suspect that is what is driving the “extremely concerned” number to go up versus last week.
Mary Cooper, IRI: I think that the wearing of masks is kind of a physical, daily reminder of the severity of COVID-19. When you see people walking around without masks, you can almost forget what is happening. But when people are being mandated to wear masks it heightens the awareness. It is just such an unusual behavior in the United States. It is a visual reminder to people that this is highly unusual and concerning.
CS: I think the wearing of the mask is going to create a seriousness to human interactions, because you are unable to see the facial expressions. Face masks might mask human emotions and connectivity.
MC: It’s a very symbolic visual. This pandemic is something we can’t see, so the mask sort of becomes the symbol of what it is visually changing.
RI: We also had an uptick in being extremely concerned about unemployment and a down-tick about those who were not at all concerned. We talked about this binomial distribution of worry about employment. Looking at the data from last week, the reports about possible end to the quarantine were a bit too optimistic. Perhaps, people are starting to see the longer-term impact on the economy.
MC: Two things come to mind when thinking about this concern: 1) one out of ten people in the United States has a career within the travel, hospitality, or restaurant business. That’s a lot of people losing jobs or getting furloughed. 2) There are other people with concern because the long-term impact is starting to show when we see what is happening with Major League Baseball, cancelling Wimbledon, summer festivals closing, and so on.
RI: I think there is one more important point to make. For the last three weeks, we’ve been asking people how long they think it is going to last before things get back to normal. And for the last three weeks, the median answer has been 12 weeks. You’d expect that this number would go down a little bit over time. But people are not appearing to be quite sure that this is going to be over any time soon. This can in part explain why people are being more worried about unemployment and long-term economic factors.
CS: Recent news in terms of the re-infection rate or the re-occurrence rate in South Korea in particular is alarming. There seems to be a number of folks who had a negative test and were re-tested weeks later and re-tested positive again. So as this news circulates, I think people will begin to get concerned that until we have a vaccine or until we have a cure that we can count on, there may just be waves and waves of COVID-19 in the future.
RI: Just like we are unable to build immunity for a cold, this is the same type of situation. You can get the same cold for a few weeks in a row. That certainly can change the whole game if this becomes more evident.
RI: Maybe we can talk about something a little bit more positive. People are starting to get delivery and take-out more! I would call this a trend now. That’s good news.
MC: I thought this was particularly interesting because you would expect that online grocery purchasing would be more accelerated. When we look at the qualitative insights, it showed that some people just really like to pick their own groceries. The other trend that I thought was positive is an uptick of people taking out some meals because people still want to support their local businesses. Some people are also tired of cooking. They feel stretched — trying to work and take care of kids in this new environment. They still need some way to take the pressure off so there are definitely some people who want take-out food. To see that decline start to inch back up is a positive movement.
RI: We asked people who are not taking delivery: what would have to change for you to start ordering takeout or delivery again? Look at the answers. There’s still a lot about the assurance of contactless delivery, that the virus is nonexistent, or there is a drastic decline in cases. There seems to be a segment of population that says, “I am staying home unless you convince me that I will not get the virus by going near a restaurant.”
RI: Now those who are continuing to support local businesses, they comment on it being comfort food and that it is a small treat to go out. It’s like something of a reward to yourself, almost like a forbidden fruit.
MC: This is a little bit of a luxury in the U.S. We are able to still go out and get takeaway food. Not all countries are able to that. For example, in New Zealand all takeaway is shut down as well. Their limitations are even greater. Given that we are in this global world where there is communication with all these different countries, we are fortunate that we are still able to do some of these things. For legislators, it’s hard to get that balance right. You want to allow people their freedoms. But there are some people that are really upset about people not following the rules, so they are asking for more rules. It’s this balance of trying to get all that right. People are looking for any little thing that they can to indulge, like being able to take out food. I think that’s why some premium foods are also doing well. It’s a treat that they can have at this point in time.
MC: As another indulgence, people are snacking more as well, it seems to be the number one growth category.
RI: I want to go back to this one topic we discussed last time when we were talking about online deliveries. We were discussing about how we were expecting for this to be a growing service. Yet, we keep seeing that online buying is not moving. So, we asked people who bought at least some groceries online why they do that. We also asked people who buy 0% of groceries online why they don’t. The main reason for not buying groceries online is still the preference to choose for themselves. But interestingly, those who do buy groceries online immediately list the benefit of social distancing as top reasons. However, that doesn’t seem to be driving people who aren’t online grocery shopping already to sign-up.
CS: Consumers that try to order online are experiencing long lead times for delivery. Brick and mortar stores have not caught up with their click and collect capability and online retailers have not caught up with their inventory management and delivery services. Demand is outstripping supply in the virtual world. I do believe, as e-commerce and digital supply chain capability catch ups, we will see consumer adoption of click and collect and e-commerce online deliveries pick up.
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Carrie Shea is a managing partner at IRI Growth Consulting with a wealth of experience in growth consulting and consumer insights. Mary Cooper is a senior principal at IRI Growth Consulting with a focus on CPG and Retail. Rasto Ivanic is a founder and CEO of GroupSolver.
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Do you have a question you want to ask, or do you want to share feedback with us? Contact us at info@groupsolver.com.
