Giving up on a quick return to normal.
Even as the threat of COVID-19 still lingers, we are starting to think about its the long-term implications on the future of retail.
We are past just fearing the virus. Most of us continue to be concerned and taking precautions as a routine matter of fact. What is becoming most pressing now is figuring out the future. Will we continue to live and shop as before? How will our shopping experience change?
With two months-worth of pulse checks under our belts, we find that consumers are adjusted to the new normal and are starting to project the changes they are seeing as a response to COVID into their future shopping expectations. More specifically, they hope that fresh foods are prepackaged or individually wrapped, grocers are taking more cleaning precautions, and information about origins and handling of food on grocery shelves is readily available to us.
We are also finding that our respondents are tough graders of our nation’s response to the crisis. Less than 20% of them are ready to ease all or most restrictions, and the overall grade to our response to COVID-19 is just above a “C” grade.
With the help of Carrie Shea and Mary Cooper from IRI Growth Consulting, we are pleased to deliver our 8th report. We value the work we have been doing to better understand the minds of consumers, and we hope you do too.
Pulse check on May 1: Losing faith in quick recovery.
Rasto Ivanic, GroupSolver: To me, the big story for this week was the jump of the median expectation of COVID duration. It feels like the expectation has been permanently set at 12 weeks and this week we jumped to 16! I think the median number has been hiding the real trend. People seem to think in monthly increments (4 weeks, 8 weeks, 12 weeks, 16 weeks) and the median has been centered around 3 months even though if you look at the average over time, it has been going up consistently. This is the first time that the median has jumped from 3 months to 4 months. That’s, to me, surprising since there’s clearly some positive energy out there from people with the economy opening up. If anything, I was expecting this number to go down!
Carrie Shea, IRI: The forecast of new cases continues to go up and the forecast of deaths is continuing to go up. I think it’s reflective of the fact that the economy is opening up and people are starting to process the fact that the sooner we open up, the longer it might take us to return to normal.
RI: Because of the economy opening-up, we decided to ask respondents if they were in favor of it or not. I think pessimism around how long the crisis will last is reflected in this chart too. 30% said they are not ready for restrictions to be relaxed and another 30% said most of the restrictions should stay in place. There’s only 18% of people who said they were ready.
CS: There is a theory that we need to have 70% of people infected in order to have herd immunity. Some believe the sooner we get there, the better the long-term economy could rebound. It’s possible that that’s why there’s pressure to open the economy, despite the short-term hit to worker well-being.
RI: Perhaps that’s the idea, but what we are hearing here is how all the theorizing is translating to the mindset of your average U.S. consumer. It just doesn’t appear that the average consumer is buying that herd immunity is a solution, at least not at this point.
RI: One new topic we explored was about indulgence during this time of stress. I was really surprised that only about 50% of people have been indulging in foods! How do you read this?
CS: I’m not surprised by chocolate being one of the key indulgences, along with cookies. That makes sense to me. Non-chocolate candy I was a bit surprised about…perhaps that may be triggered more by seasonality and holiday events. I thought it was interesting that 23% were buying a larger size than usual, which maybe is related to the fact that consumers are only going to the store about once a week or every other week.
Mary Cooper, IRI: Some people may be indulging differently. They might be enjoying salty snacks or more savory food items.
RI: I am still really surprised, that only 48% stated that they indulged in some sort of treat or food. To me that number is really low…
CS: It might be reflective of those who have become unemployed or those worried about becoming unemployed. They may be trying to conserve their food budgets.
RI: The other theory could be about stress eating. Maybe they are eating more of indulgent food, but they don’t see it as treats. Rather, it’s a way of coping with the stress.
CS: And it could be also people trying to eat healthier to get their immune system stronger. Perhaps people are trying to eat less sugar.
What other foods have you indulged in?
RI: Thinking again about the future, we asked about changes shoppers would like to see in grocery stores. There are pretty clear themes such as creating barriers, cleaning more often, and individually wrapping the food. People don’t want to see open food bars in stores anymore. It’s very logical. Also, not surprisingly, we are also curious about where our food is coming from and how it’s been handled.
CS: I think this also has big implications for the deli section of the store because it’s hard to social distance in line at the deli counter and it’s not contactless shopping. I think available, pre-packaged fresh deli cuts is what consumers can expect in the future. Possibly some type of COVID certification program where grocers can say “We are COVID-certified. We go through this protocol in the store in general, at checkout, and deli”. This way consumers would feel confident that their retailer is doing everything they can to minimize COVID spread.
MC: Not only does it feel like there is going to be more prepacked meat or cheeses, but we could see some of the self-service salad, soup, and hot food bars transition to being behind a counter and an employee will be serving you instead. People might also want some of the produce and fresh baked goods better packaged up, as well. Some other things we see are people bringing their own shopping bags being discouraged. Offering of prepared food samples in stores has also gone away.
What changes in their store presentation and packaging would you want to see as a result of your experience with COVID-19?
RI: That’s a shame — food sampling is one of my favorite ways of discovering new foods. I’m also wondering about the second-degree impact of prepackaged foods like deli meats. Maybe it’s only my individual perception, but to me something pre-wrapped doesn’t seem as fresh. When it’s not prepackaged you can smell the freshness. That will all go away. Will this even feel like a fresh food experience or something like the prepackaged food you get at the airport?
CS: And fresh bread too! Smell is a very important part of the shopping experience.
MC: Another thing which may evolve is some of the secondary packaging may come back. Think of a six-pack with the ring holders. Alternatively, if those bottles are in a cardboard package, then people can just remove the packaging without having to wipe down each individual bottle.
RI: One other interesting thing is an opportunity for sustainable packaging. Will this lead to some innovation that caters to our conscious generation of consumers who are also very concerned about the virus? I guess we will have to see.
CS: Another thing that surprised me was the question about rating our country’s response. The discrepancy between Republicans and Democrats didn’t surprise me. What surprised me was that the overall rating was quite low. I would’ve expected the Republican score to be higher, and I would have expected a wider disparity amongst people with kids. I think it’s such a fascinating finding.
RI: For sure. I agree that I wasn’t expecting that low scores either. It is probably reflective of the worry about the future. I think people need to see real success before they start feeling good about what we have done.
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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