Managing Director & Senior Partner
An unusual usual. A new, interim routine. Consumers have changed their daily lives to adapt to lockdown conditions. As we saw in prior weeks, those who can are working from home, forgoing school and childcare, and spending more on essentials and in-home entertainment and less on discretionary items and out-of-home activities and travel. In our most recent research, however, both spending and changes in sentiment appear to be starting to plateau, as consumers settle into an interim normal.
At the time of our most recent survey (April 10–13), lockdowns had been in effect for 20 days or more in most of the developed markets surveyed—although the numbers vary considerably within countries, especially in the United States, where lockdown decisions are made at the state level—and we are seeing the number of new cases reported in many countries begin to level off or decline. (See Exhibit 1.) Most of the countries surveyed have also announced extensions to their lockdown periods of an additional 20 days or more, and many jurisdictions have announced school closures through the end of the academic year, offering consumers some much-needed clarity.
At the same time, many countries have begun making plans to reopen their economies, indicating that an end to the restrictions may be in sight. This development, in conjunction with the slowing pace of new COVID-19 cases, may have contributed to the recent improvements in consumer outlook that we are now observing: fewer consumers across developed markets believe that the worst is yet to come. (See Exhibit 2.) We are also seeing a slight decline or stabilization across most countries in consumers’ concerns about personal finances—an indication that they may be anticipating the end of the lockdown period and the potential restarting of the economy.
The changes to daily life imposed by the lockdowns have been significant, including the delay or cancellation of many common day-to-day activities. For example, numerous consumers have delayed or canceled non-virus-related hospital therapies or visits to their primary-care physician. (See Exhibit 3.) In many cases, these steps probably reflect mandated restrictions on elective procedures in various geographies, as well as heightened concerns over possible exposure to the virus in medical settings.
That said, consumers seem to be adjusting rapidly to the new, interim normal. In our April 10–13 survey, planned spending for the next six months shows relative stability across categories, with no category showing a decline of more than 20% since the March 27–30 survey period—a novelty since we began this longitudinal study six weeks ago. (See Exhibit 4.) Similarly, net planned spending changes across store types over the next month have shrunk—and are even showing a slight positive trajectory.
In the US and the UK, survey figures for planned travel spending over the next six months have stabilized, although comparable figures for France and Italy have continued to trend downward. (See Exhibit 5.) When we asked consumers about their plans for hotel stays, flights, cruise trips, and casino trips, the net average percentage of US respondents who expected to reduce their planned spending on such activities increased only slightly, from 52% in our March 27–30 survey to 54% in our April 10–13 survey. UK respondents showed a net average increase of just 1% over the same interval.
Looking ahead to the end of the lockdowns, consumers across developed markets seem to share fairly consistent views about which indicators will give them the most confidence that the coronavirus is under control. (See Exhibit 6.) Most consumers say that they will consider it under control either when a vaccine is available or when no new cases of COVID-19 occur in their home country. Emergence of an effective medication for treating the illness is also seen as a good indicator that the coronavirus is under control. In Canada and the UK, consumers view the removal of government restrictions as a strong and slightly more effective indicator than do consumers in other countries. Across all geographies, the reopenings of restaurants, shops, and offices are the measures least likely to instill confidence that the virus is no longer out of control.
Predictably, consumers’ willingness to resume activities—even at a minimal level—tends to be closely correlated with their views on when the virus is under control. (See Exhibit 7.) For example, at least half of US consumers in our April 10–13 survey say they will resume some level of activity across all specific categories—including different types of travel and various everyday activities—once current government restrictions are lifted. The same trend is evident in all of the developed markets we surveyed. The numbers increase to around 80% or higher when a vaccine or drugs to treat the virus are assumed to be available. Daily activity categories still attract higher numbers of respondents willing to reengage in them than travel categories do, but those differences fade once we stipulate a future in which the number of new cases has slowed and treatments or a vaccine is available. Interestingly, having the number of new COVID-19 cases slow is more likely to increase the number of respondents willing to resume activities than lifting government restrictions is, even though it scored lower as a measure that would give consumers confidence that the virus is under control. This suggests that a group of consumers may see slowing cases as a strong indicator that they personally are less likely to catch the virus, but not necessarily as a reliable indicator that the virus is under control nationally.
Although the differences in percentage of consumers who plan to resume activities across the categories are generally not significant, except for somewhat higher numbers in daily activities versus travel activities, the differences in level of activity appears to be considerable. Consumers predict that they will return to normal spending levels across daily activities—such as local leisure activities, dining in at restaurants, and shopping at stores—more quickly than they will in travel categories. (See Exhibit 8.)
As companies look ahead, many are considering adopting various health and safety measures to encourage customer reengagement after the lockdowns. Many consumers say that such changes would favorably influence their readiness to resume activities, suggesting that introducing the right health and safety measures could accelerate recovery. (See Exhibit 9.) In fact, 80% of consumers say they would be willing to resume daily activities if certain measures were adopted, whereas only 10% say they are willing to do so now, without those measures in place. Social distancing, the availability of hand sanitizers, and regular antiviral cleaning are the options that most increase consumers’ likelihood of resuming daily activities.
Notably, nearly 60% of consumers say that they are willing to fly as early as next month if certain health and safety measures are in place. (See Exhibit 10.) The measures in question range from antiviral cleaning between flights to requiring protective gear, such as masks for passengers and gloves for flight crew, to mandating proof-of-health certificates from the CDC for all passengers. Consumers also view use of hand sanitizer, temperature checks, and social distancing—including middle seats kept open and extra space enforced in the security lines—as effective measures.
As consumers show signs of having adjusted to a new, interim routine under lockdown, many companies have either ramped down (for example, airlines and hotels) or ramped up (for example, grocery stores and drug stores) to address interim needs, and these efforts appear to be stabilizing. However, as governments devise plans for restarting the economy and begin to contemplate easing restrictions within the next month or so, companies need to have a clear recovery plan in place—one that addresses multiple scenarios—as well as a realistic view of what the new normal in the post-recovery period could look like.
Our next Snapshot will take a look back at our Q4 2019 study of consumer sentiment and spending in the US and consider its insights in light of more recent events. We conducted our 2019 review in November 2019, prior to both Black Friday and COVID-19. Comparisons of that research to our recent post-COVID-19 research will reveal consistencies in consumer behavior across both periods, existing trends that the coronavirus likely accelerated, and potentially new behaviors.
BCG’s COVID-19 Consumer Sentiment Snapshot series is based on data drawn from an online survey of consumers that is conducted every one to two weeks across multiple countries worldwide. Each Snapshot highlights a selection of insights from a comprehensive ongoing study that BCG provides to clients. The survey is produced by the authors, who are members of BCG’s Center for Customer Insight (CCI), in partnership with coding and sampling provider Dynata, the world’s largest first-party data and insights platform. The goal of the research is to provide our clients and businesses around the world with periodic barometer readings of COVID-19-related consumer sentiment and actual and anticipated consumer behavior and spending to inform critical crisis triage activities, as well as rebound planning and decision making. The research does not prompt consumers about the virus when asking many of the key questions, including questions about spending changes in the next six months, in order to avoid biasing the results. A team composed of BCG consultants and experts from CCI completes the survey analytics.
We would like to thank our key country contributors for this article:
We appreciate the generous support provided by the following people in producing this research and associated article series:
We also thank BCG’s Center for Customer Insight (CCI) team globally, Scott Wallace, and Dynata.
Boston Consulting Group’s Center for Customer Insight (CCI) applies a unique, integrated approach that combines quantitative and qualitative consumer research with a deep understanding of business strategy and competitive dynamics. The center works closely with BCG’s various practices to translate its insights into actionable strategies that lead to tangible economic impact for our clients. In the course of its work, the center has amassed a rich set of proprietary data on consumers from around the world, in both emerging and developed markets. The CCI is sponsored by BCG’s Marketing, Sales & Pricing practice and Global Advantage practice. For more information, please visit Center for Customer Insight.
Dynata is the world’s largest first-party data and insights platform. With a reach that encompasses 62 million consumers and business professionals globally, and an extensive library of individual profile attributes collected through surveys, Dynata is the cornerstone for precise, trustworthy quality data. The company has built innovative data services and solutions around its robust first-party data offering to bring the voice of the customer to the entire marketing continuum—from strategy, innovation, and branding to advertising, measurement, and optimization. Dynata serves nearly 6,000 market research, media and advertising agencies, publishers, consulting and investment firms and corporate customers in North America, South America, Europe, and Asia-Pacific. Learn more at www.dynata.com.