Stepping into the unknown.
Where will COVID-19 take us in a few weeks? Months? The next year?
For the first time over the past few months of running these pulse checks, we can confidently say that there are two pulses: those who are feeling confident and seeing the situation from a glass-half-full perspective versus those who have an elevated, agitated pulse. Some people don’t see much change in their grocery behaviors and even expect their disposable income to increase. Others continue to stock up on food and household items while feeling worried about their finances. The real question is, who has the most reason in this situation? Does it completely depend on individuals, or are we all going to feel the same effects? We are, as we have been in the last two months, stepping into yet another uncharted territory…
This report may mark the amplification of emerging trends, namely an increase in online grocery shopping for both delivery and in-store pickup. Retailers may need to continue to change their business models if they want to remain relevant in the post-COVID world. From this data, we can only hypothesize what could happen next.
We would like to thank Mary Cooper and Carrie Shea once again from IRI Growth Consulting for another exciting discussion. We hope you enjoy theorizing about the future of the U.S. as much as we did.
Pulse check on May 10: Some are gaining confidence and optimism, others are agitated and worried.
Rasto Ivanic, GroupSolver: Let’s talk about what we see this week! Unsurprisingly, we see some of the same trends in level of concern, but we did have an uptick in those numbers. It’s not something that we can call significant after one week, but my feeling is that the longer this crisis lasts, some consumers’ sentiment will trend slightly worse instead of better.
Mary Cooper, IRI: The biggest thing that could help people feel better is if there was a breakthrough with a vaccine. Another thing troubling to consumers is that this COVID-19 crisis keeps going and going, but it isn’t getting better. There is unrest amongst the people — is it time to open or not? When will we have a viable, comfortable solution for everybody moving forward?
Carrie Shea, IRI: We have a health crisis and an economic crisis. They are linked in a way that every time we have an uptick in the economic outlook, we have a downtick in the health area. It’s hard to get both of those situations moving in a positive direction at the same time. It will be consumer confidence and spending that will get us out of this. That can only happen if fear is reduced and economic vitality is increased.
RI: Well, you mentioned consumer confidence. Employment and having some security in income is part of that equation. So, let’s talk about unemployment. We’ve had these numbers pretty stable but this time we broke them down by education level and by gender. You can see that those with post-graduate degrees and bachelor’s degrees are most concerned about unemployment.
CS: Do you think it has to do with their jobs or their ability to consume information?
RI: I think it’s a combination of effects, and the two effects impact different groups of consumers. Cutting this data in another way, we looked at those who are most concerned by income level, and it is people with the highest income and lowest incomes who worry the most. Those with higher education and income levels, maybe they who are consuming most information and think through the possible future impact that worries them. And, at the low-income end of the spectrum, we have those are more likely to work on the front lines and see the effects first-hand on a daily basis, which drives their anxiety.
RI: We do see something else interesting about some of the trends of online delivery: both purchasing online to get delivered and picking up in-store. We talked about this a few times before that maybe people aren’t taking advantage of online purchases because of stockouts and supply chain issues. It looks like it is starting to pick up now.
MC: I think it’s interesting that we are finally catching up with online purchasing. This could be in parallel with supply chain catching up and retailers being able to fulfill their orders. People are not finding it very fun to stand outside in queues to get into stores to shop. It makes consumers more open to online click and collect.
CS: Consumers may be getting word-of-mouth from friends and family that online is working. I think there has also been a degradation in the quality of the produce that is in the store. There’s less of a difference between what you are picking out yourself and what someone else is picking out for you.
RI: We asked a few new questions about how people are feeling too. Why don’t we discus those here?
MC: Yes, it’s interesting how a lot of people are spending or thinking about how they will spend their money. The majority, indicate they are currently consistent with their spending. But if you start looking at the tails there’s going to be people who are thinking they’ll spend less due to the recession. However, some people indicate they are spending more to treat themselves or others. Slightly more indicate they will give more to charitable causes.
RI: So, what do we think people will be buying more or less of when retail starts growing again? Looking at consumer packaged goods, food products is the only category where more people expect to buy more than buying less or staying at the same level. For drinks and household products, more people expect an increase than decrease. But clothing and cosmetics, more people expect a decrease rather than increase. The content of the shopping basket is likely shifting, right?
CS: Well I think this is very interesting! I think the household products makes so much sense. People are going to want to spend more to make sure their family is safe and the home is clean.
Which items are you buying more now than before the COVID-19 crisis?
RI: Should we maybe talk about the grade that consumers are giving the country?
CS: I think just as we can bifurcate the pulse, we should separate the grading into economic and health scores in the future.
RI: I love that idea! The scores haven’t changed much from last time. The only group, besides Republicans which is surely politically driven, are those with kids who still are ranking the response the highest.
CS: For next time, it might be interesting to ask people what balance between worrying about health and economy they think is right. Should we be 80% worried about the health of our country and 20% about the economy? Or vice versa? How do people balance that?
MC: I’d be curious about how much people think we are at the point where we should be making our own decisions versus the government. I know people who speak to both sides.
RI: If I could make a prediction with almost 2/3 of people who are not ready to let go of the restrictions, I’m suspecting that most of us are leaning towards keeping it together in hope that the greater good will win. And let’s not forget, before we know it, this will become more political. The elections are coming 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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