A man wearing a face mask and rubber gloves carries a box of vegetables away from a line of parked cars. A sign on the box reads "STAY HOME. WE DELIVER."
Food delivery may be less of a go-to in the coming months as people get vaccinated and start to shop and dine out again. But other consumer habits may be here to stay. — Getty Images/svetikd

Why it matters:

  • Consumers increasingly rely on friends and digital channels to learn and buy, rather than traditional information sources.
  • They are seeking the best value for products and services as overall consumption decreases.
  • Technology enables all purchases from grocery items to new homes.

The COVID-19 crisis ushered in new norms for everything. In the space of 12 months, people have adopted pandemic parlance from Zooming to social distancing, and the ripple effects of living remote have run through every industry from apparel to hospitality to real estate. Along the way, consumer behaviors changed, potentially for good.

All age groups adopt a ‘millennial mindset’ around digital consumption

“During lockdown, the home has become a multiverse. It’s where we work, eat, play, and connect with our families and friends,” the authors of a McKinsey report wrote. They found that during months of social isolation, consumers were spending more time doing home improvements and creating their own entertainment when live events, concerts and movie theaters were verboten.

The report revealed that 45% of consumers tapped online streaming services to watch films and TV shows, and turned to replicating restaurants and concession stand experiences at home.

The National Confectioners Association (NCA) reports that consumption of premium chocolate, for one, has especially benefited, rising 12.5% since last March, as consumer spending on food and beverages rose 10% overall, according to Unity Marketing. Those increases come amid a 17% rise in online shopping across categories, McKinsey found.

The end of the pandemic may eventually mean a shift away from consuming movies and meals at home, but consumer spending patterns could be permanent. “All age groups have begun to adopt a ‘millennial mindset,’” according to economists and analysts at the Swiss Re Institute. “They rely on friends and digital channels to learn and buy, rather than traditional information sources,” the report’s authors wrote.

[Read here about tools to manage user generated content.]

During lockdown, the home has become a multiverse. It’s where we work, eat, play, and connect with our families and friends.

Victor Fabius, Sajal Kohli, Björn Timelin, and Sofia Moulvad Verane, McKinsey & Company

Ongoing concern with value cuts out the middleman

The rise of remote work had a far-reaching impact on spending as purchases of everything from clothing (which changed from business formal and casual to athleisure) to toilet paper (a pandemic-era treasured commodity) reflected new lifestyle patterns.

NielsenIQ revealed that 80% of shoppers were looking to buy directly from manufacturers, and 71% are still willing to pay more for higher quality fare.

Alison Lock, the director of NielsenIQ Intelligence Unit, told CO— that this trend was driven by a perception of value on the part of consumers. "The majority of consumers believe that by buying directly from manufacturers and effectively cutting out the 'middleman,' they will get better value through pricing and promotions, greater variety of choice and better rewards," she said. Of the nearly 75% of consumers who say they are willing to pay more for higher quality products, Lock noted, “they are willing to make a conscious trade-off on price for a product they believe will better meet their household needs.”

[More here for expert business predictions on pandemic trends that are here to stay.]

Technology enables big-ticket purchases

Stay-at-home orders and remote work created a perfect storm for people to move to a different dwelling. Census data indicates that sales of new homes increased steadily in the second half of 2020 to 12.3% and continues trending upward this year.

Health concerns and social distancing meant that the traditional walk-through of a model home or viewing an existing property got pushed to platforms like Zoom, FaceTime or Skype. Yet Builders Digital Experience (BDX) surveyed more than 8,000 current home shoppers and recent buyers in 43 housing markets and found that 87% of shoppers run into roadblocks like a lack of details about features or pricing.

“As the scale of the pandemic became clear, builders pivoted, deploying a decade of digital transformation in six months,” said Jay McKenzie, a senior director at BDX. McKenzie told CO— that the company upgraded its 20-year-old site NewHomeSource.com. The upgrades and software releases were aimed at “enabling consumers to shop for, design and buy their new home from the comfort of their couch in their current home,” according to McKenzie. Additionally, a report from real estate site Redfin found that 63% of 1,900 recent homebuyers admitted they purchased just from viewing online when the listing detailed features and other specifics necessary to make such a major decision.

“Increased use of digital tools is blurring the lines between work, lifestyle and social interaction and between domains like mobility, health and finance,” Mahesh H. Puttaiah, senior economist at Swiss Re Institute, wrote in the report. “We expect this to continue in the post-COVID-19 world.”

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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Published April 19, 2021