consumer behavior

Stepping into the unknown.

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 againfrom 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.

concern about coronavirus is increasing again

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.

concern about employment based on education

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.

changed in meals

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.

online groceries for pick-up

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.

spending money during pandemic

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?

purchasing post-coronavirus

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?

products purchasing more of

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.

country grade

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…

feelings towards opening up economy

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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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Do you have a question you want to ask, or do you want to share feedback with us? Contact us at info@groupsolver.com.

Giving up on a quick return to normal.

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!

weeks increased to 16

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.

average length of pandemic has increase as well

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.

feelings about opening the economy

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.

foods indulging in during covid-19

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?

other foods 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?

changes in stores amidst 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.

country's grade to covid-19 response

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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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Do you have a question you want to ask, or do you want to share feedback with us? Contact us at info@groupsolver.com.

What’s next?

What’s next?

We are getting used to this new normal, but what will the new new normal be like when the economy reopens and life tries to go back to usual? That’s the trillion-dollar question.

Currently, federal and state governments are faced with important decisions on how to reopen the economy. Some believe that reopening the economy will bring things quickly back to the way they were, a v-shaped recovery. But consumers are showing in this survey that they may not be on the same page. Our respondents are continuing to believe that things will take around 3 months before the effects of COVID will go away. They are now also saying that they don’t plan on purchasing unnecessary items or indulging in luxuries once things get back to normal. Instead, they will keep their pantries stocked in anticipation of another crisis. Consumers may not be in panic mode now, but they certainly have their guard up.

It’s been an eye-opening journey working on our pulse checks to deliver a glimpse into U.S. shoppers’ minds. Yet again, we appreciate the opportunity to collaborate with Mary Cooper and Carrie Shea from IRI Growth Consulting on this report.

Pulse check on April 24: Waiting to see what happens next.

Rasto Ivanic, GroupSolver: Well, week seven! I think we are all kind of getting to the point where we’ve been doing this long enough and we are maybe able to draw some conclusions. We stabilized around 80% of people who have adjusted their shopping behavior. In terms of concern level, there has been a slight dip. It didn’t really go down, it’s flat. Now we are standing in front of the next major step, which is opening up the economy. What do we think is going to happen?

Carrie Shea, IRI: It’s going to be very interesting to see in the coming weeks, as certain geographies open, does the level of consumer concern go up or down? Does being out and about make people feel that things are getting back to normal and they’re less worried? Or if there is a spike in COVID infections again in communities that have opened, do we see concern go up again? People are becoming used to the new normal. But the new normal is still an average concern of almost an 8 out of 10. It’s still very high!

Mary Cooper, IRI: I think there’s going to be differences amongst various regions, geographies and among age cohorts. How people look at it is going to be different now and as we move ahead. There are some people who are kind of ‘over’ the shock of this and settling into the new norm. Some people are going to go back to business as usual and other people are not going to go back so quickly.

RI: What I am afraid is that if we think this ‘new normal’ is hard, then the new ‘new normal’ is going to be even harder when we open up a little bit and start venturing out. The new ‘new normal’ will require us to make yet another mental adjustment and compared to ‘shelter in place’ which is a pretty simple state of mind, being out and about with the risk of infection still around it will be an order of magnitude more taxing mentally.

CS: I agree. Consumers are going to have multiple decisions to go out or not go out every day and you won’t know which of them might have exposed you to the virus. People are going to not only have to keep careful track of everyone they’ve been in contact with, but also they will constantly worry about if they got exposed!

concern about covid-19 has peaked

RI: One of the things we haven’t seen change much has been the primary purpose for shopping for either near-term consumption versus pantry stocking. But one interesting thing that came out when we asked what kind of purchases consumers will be doing more of is a lot about non-perishable items and stocking the pantry. It’s very likely that this will be one of the new behaviors we will observe when all of this is over.

MC: We also saw it more amongst youthful cohorts. They are going to be stocking a few more things at home so they are not caught on the spot like this in the future.

Please list products or services you think you will be buying more after COVID-19 than you did before COVID-19 crisis.

products buying more after covid-19

CS: I suspect multiple stores searching is still being driven by out-of-stocks. In the beginning of the COVID lock down, it was mostly toilet paper and cleaning supplies that were out of stock. Now it’s pork-related and certain meat categories. What’s out-of-stock is varying by region and by retailers. I think we are still going to see a lot of people having to make multiple stops to get what they need.

MC: We also heard from a number of our clients that there are supply chain issues. So, they may not be able to get certain ingredients or certain packaging. They may be having a hard time making the product because they are unable to get a core ingredient or item to make their product.

grocery shopping actions in response to pandemic

RI: One thing that worries me is this: in the week when everybody is talking about reopening the economy, many of us are perhaps starting to get hopeful, the new cases are going down, our respondents still expect that the crisis will take another 12 weeks to end! It is the same expectation 4 weeks in a row. People don’t seem to be believing that this is going to end soon. Then, when we combine it with consumers telling us that they are likely to avoid unnecessary purchases, travel, eating out, fast food when it does end, it feels like the population is hunkering down for the long run.

Please list products or services you think you will be buying less after COVID-19 than you did before COVID-19 crisis.

things buying less after covid-19

CS: I think it’s a really good point. Every week that passes the consumer is still telling us it will be another 12 weeks. I think the consumer expectations of the crisis timeline keeps moving out as the cumulative deaths go up. I am intrigued that 15% of people think this crisis will be going on for another 50 weeks or more. We’ve heard some of the doctors saying that this could last for a year and a half, maybe longer. I guess some consumers are listening to those warnings and managing their expectations that this new normal will last for a long time.

MC: Some of the restrictions also keep changing. You’re also seeing some industry shifts like Disney being closed until the end of the year. Their response depends on what impacts their personal world.

weeks until going back to normal

RI: The one positive news for the retail sector is that a lot of grocery stores have made a positive impression so far on our consumers with their reaction to COVID-19. In this survey, we asked which brands’ COVID-19 responses stand out to consumers. It warms my heart that the ‘forgotten’ part of the economy that we have been taking for granted such as Walmart, Target, and Kroger made the list.

CS: For many people, the grocery store is the only place they are coming in contact with non-family members. Shopping is becoming a little bit of a social outlet, although with very strange new behaviors. When a consumer ventures out to a grocery store and goes through the checkout, even though the person checking them out is behind plexiglass, there’s someone there that consumers appreciate, because they showed up to work and are taking risks by working.

brands making positive impression

RI: I think we are at a fascinating junction in our COVID-19 fight. Wall Street is making a bet that as soon as we open-up, everything goes back to normal and things pick up really quickly. On the other hand, consumers are telling us now, in this moment, that they are expecting more than 12 weeks and are saying that they won’t buy unnecessary products. Eventually the rubber will meet the road. That is the trillion-dollar question: what will buyers actually do when we touch down and put those wheels on the tarmac? That is the biggest unknown that will drive everything for the foreseeable future and will determine the pace and shape of our recovery.

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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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Do you have a question you want to ask, or do you want to share feedback with us? Contact us at info@groupsolver.com.