A study conducted by SFW, a brand growth company based in Raleigh and Greensboro, N.C., demonstrates just how quickly consumer attitudes and sentiment can change when it comes to coronavirus, or COVID-19.
In just one week, the level of concern over coronavirus increased substantially, which may greatly impact how consumers shop and spend over the remainder of the year. SFW fielded a national benchmark survey on March 6, 2020, with a follow-up wave fielded on March 13. Nearly 1,600 consumers participated in the surveys.
“In just one week, the huge swings—both down and up—in the stock market, the implementation of international travel bans, the postponement or cancellation of major sporting events and leagues and the declaration of a national state of emergency all came together to significantly change consumers’ attitudes toward the disease and the economy,” said Ged King, chief executive officer for SFW. “We’re seeing positive changes in the acceptance of social distancing. We are also seeing an increase in people that might delay a major purchase, but still expect to complete them in the next 12 months. The bright spot is e-commerce. Barring distribution challenges, it is an opportunity for brands to help consumers.”
Highlights of the report include the following:
The level of concern over coronavirus has increased sharply as more people report that they have been impacted by the virus.
With coronavirus dominating the news, there has been a 25% increase in familiarity (from 64% to 80%) in the past week. The increased familiarity with the virus appears to have fueled concerns over the impact that it will have in the coming year.
- The percent of people saying that they have been impacted by coronavirus more than doubled, with 37% reporting that they have been impacted compared to 16% the previous week.
- Last week, 49% were concerned about the coronavirus impacting their life in the coming year, a figure which rose to 63% in just one week.
- 43% believe their household income will be negatively impacted by coronavirus, up from 26% the previous week – an increase of 70%.
Coronavirus will disrupt consumers’ willingness to make major purchases, which will have ramifications at retail.
The events that unfolded over the past week appear to have tempered consumers’ willingness to commit to major expenses, demonstrated by a substantial decrease in the number of consumers saying they will proceed as planned in making major home and auto purchases in the coming year.
- Among those planning to buy a new home this year, 41% say they will proceed as planned, which is down from 67%. This decrease is led by Millennials, whose intent to proceed with a new home purchase as planned declined to 35% from 73%.
- Planned spending on major home improvement purchases decreased to 35% from 49%, with boomers declining to 22% from 54%.
- New home furnishings purchases decreased to 35% from 51%, with the steepest decline coming from Gen Xers, which decreased to 36% from 61%.
- Among those planning to buy a car this year, 36% will likely proceed as planned, which is down from 49%. Boomers again led the decline, dropping to 23% from 55% a week ago.
Coronavirus will likely fuel online shopping.
As additional retailers announce store closures of two weeks or more, consumers are growing more concerned about their ability to get the basic household items that would carry them through a protracted quarantine. As a result, more consumers will turn to online shopping to meet their needs.
- 58% are concerned about the potential availability of basic household items (e.g., food, water, paper products, personal hygiene products) resulting from coronavirus, which is up from 41% from the previous week.
- 56% of consumers say they will shop online more because of coronavirus, up from 47% a week ago, an increase of 20%.
Consumers believe an outbreak is coming, yet employers may not be ready for it.
The study found that 71% of consumers are confident that taking extra steps to protect themselves (e.g., avoiding crowds, washing hands more frequently) will minimize the likelihood that they will get coronavirus. This is an improvement from the 64% reported in the previous week. While confident in their own ability to protect themselves, there are concerns about the population at large.
- 60% of consumers say that it is likely that there will be a major outbreak of coronavirus in the U.S., which is up from the 50% reported in the previous week.
- However, only 37% say that their employer has a plan for a coronavirus outbreak, which is up from the 25% reported in the previous week.
“SFW will continue to track consumer sentiment over coronavirus, as well as the impact it may have on the way we shop for and buy products,” King added. “The daily announcements of new cases and new restrictions are having a big impact on consumer attitudes and potential spending—it remains an extremely fluid situation.”