COVID-19 Month-Over-Month Survey Comparison: Consumer Trends and Their Impact on Retail Supply Chains
Blue Yonder is committed to helping its customers face the unexpected. To provide insights into the COVID-19 coronavirus pandemic and its impact on supply chains around the world, we are delivering a blog series to help anyone looking for support and advice. Our experts, who have spent years in the supply chain industry, share their insights.
Now well into the second month since the World Health Organization (WHO) declared COVID-19 a pandemic, the world continues to search for ways to adapt to the significant changes in daily life. In the U.S., consumer behavior has been a barometer for larger trends affecting industries such as retail and manufacturing, as well as the overall economy. Here at Blue Yonder, we’re keeping a close eye on consumer sentiment to continue to glean impactful insights on what lies ahead.
Building on our survey from last month, Blue Yonder surveyed another group of 1,000 U.S. consumers between April 17-18, 2020, to see if there were any notable shifts in consumer perceptions/shopping habits month-over-month. Not surprisingly, the results show that overall consumer spending has decreased while online shopping sees steady growth; however, there are also notable takeaways for grocery delivery services based on additional questions that were added this month. Read on for the full results:
Consumers are spending even less:
- 68% of consumers say they are spending less because of the pandemic in April, which is up from 49% in March–a 39% increase
- With another 35% of consumers saying they are spending significantly less, compared to 22% in March–a 59% increase
- However, 21% of consumers spent more on medical face masks in April, compared to only 9% of consumers last month–a 133% increase
It is no surprise that COVID-19 is continuing to impact consumer spending habits negatively. But the exponential growth in consumers that are spending less and significantly less in just one month’s time is staggering. Similar to last month (59%), most respondents (61%) spending less in April are doing so because they are still avoiding going out in public, preventing them from buying things in-person.
This is a direct correlation to the massive growth seen in consumers spending more on medical face masks this month. On April 3, the Centers for Disease Control and Prevention (CDC) recommended that everyone wear cloth face coverings in public settings where other social distancing measures are difficult to maintain, including grocery stores and pharmacies, further communicating the growing uncertainty and seriousness of the spread of the virus.
It is interesting to note that the use of face masks and similar face coverings is not so much to protect the individual, but more to protect others from those that are contagious but asymptomatic. The theory being that if you are sick and don’t know it, wearing a mask will limit the amount of virus you are inadvertently spreading when out in public.
This has a direct impact on the psychology of shoppers—providing a relative sense of empathy by protecting others and making the occasional sojourn outside the house at least moderately acceptable. This is born out in the data:
Online shopping is growing, but in-store grocery shopping is still preferred:
- 74% of consumers did more shopping online as opposed to in-store in April because of COVID-19, compared to last month’s 57%–a 30% increase
- 69% of consumers continue to shop in-store for their groceries in April, which is similar to the March finding (68%)
Even before the pandemic, retail segments including tech, apparel, grocery and home goods had seen significant shifts from brick-and-mortar to online. While consumers adopt more regular online shopping habits, their preference to purchase groceries in-store during the COVID-19 crisis has not changed since the beginning of the nationwide quarantine.
For other traditional retail segments, if we see the easing of lockdowns in the next month in much of the country, there will hopefully be pent-up demand that will show itself in “feel good” purchases, like new outfits. If this is the case, we will see deep discounts from retailers at a level that allows them to cover the cost of goods and flip inventory to cash.
However, if lockdowns persist into the summer or there is a second wave of cases that lead back to current restrictions, retailers will lose an entire season that will fully cement the end for some weaker players.
Regardless of how long the lockdowns continue, retailers using AI/ML demand forecasting engines will be able to quickly pick up further cross-channel shifts to online purchasing. Granular AI/ML demand solutions that work at the item/location/day level will see how much demand is moving back to in-person shopping and how much is staying in e-commerce channels.
Grocery delivery is working out supply chain kinks:
- 38% of consumers have attempted to have their groceries delivered during the COVID-19 crisis
- 68% of this group successfully had their groceries delivered
- Instacart (43%), Amazon Fresh/Whole Foods (39%) and Walmart Delivery (36%) were the top delivery services, according to respondents
- However, 54% of respondents experienced a delayed grocery delivery order, with 28% stating their delivery was delayed by more than three days
- 39% of consumers say they are either likely or very likely to use grocery delivery services in the future
As grocery delivery continues to trend upward and attract new customers given the current crisis, it is crucial for initial experiences to be positive if customers are to become repeat users of these services. The majority of consumers (69%) that still prefer shopping in store for their groceries and who are still willing to take on the associated risks should be alarming to grocery delivery service providers and a telltale sign that their supply chains are imperfect. In a world where the expectation of “now” has been the new normal, consumers will continue to head to in-store locations if they cannot secure a grocery delivery window (67%) for their weekly shopping needs.