Mandatory shutdowns and closures of workplaces, retail stores and restaurants have served up a new way of life for many Americans over the past month.
Questions about when these measures will be lifted loom large in the minds of many consumers, who have altered their purchasing behaviors radically even since March.
According to a new study from Prosper Insights and Analytics, which collected data from shoppers earlier this month, 79 percent are deeply concerned about the coronavirus—a massive jump from March, when only about 45 percent said the same.
Views on the economy have also taken a drastic turn in recent weeks, analysts said.
Only about one-third of consumers are confident in the economy, according to April numbers, while more than half expressed confidence in March. The vast majority (86 percent) said the coronavirus was having an impact on the economy this month, compared with about 52 percent in March.
That decline in consumer confidence is impacting spending at retail in a marked way.
Nearly three-quarters (72 percent) of concerned parties are shopping less in stores this month, while in March, just about one-quarter (about 24 percent) said the same.
Some of that traffic is moving online, with 37 percent of concerned consumers turning to e-commerce this month versus just about 18 percent last month.
About half of all consumers agree that their purchasing behaviors will change in the future—and the most prominent group of shoppers offering these insights are women shoppers ages 35-44.
Highlighting those budding changes, buy now, pay later platforms like Klarna have seen an uptick in users in recent weeks. In a statement Thursday, the payment provider said that its monthly active U.S. users surpassed 1.1 million in March, and its daily active users hit a year-to-date high on April 2.
However, in analyzing user data from the week of April 4, Klarna said shoppers have shifted some of their spending on apparel and footwear to beauty and leisure items.
That week, the apparel, footwear and accessories category lost 11 percent of all purchases among Gen Zers, as well as 9 percent and 10 percent of millennial and Gen X wallet share, respectively.
Conversely, health and beauty is booming, especially with young shoppers. Gen Z increased its spending on the category by 20 percent during the week of April 4, while millennials and Gen Xers both spent marginally more on makeup, skincare and other necessities for bodily health.
Klarna’s users also increased spending on leisure, sport and hobby items week over week. Gen Xers proved most apt to shift spending, with 10 percent more of them looking to puzzles, crafts and other hobbies for at-home entertainment. Gen Zers and millennials saw 6 percent and 5 percent bumps, respectively.
The home and garden category’s share of all Klarna app-enabled purchases grew slightly among Gen Xers and millennials week over week and was roughly flat among Gen Zers.
Klarna-enabled purchases on marketplaces (which include sites such as Amazon.com, Walmart.com, Target.com and eBay.com) rose among all three age groups in the week ended April 4. Among Klarna users, Gen Zers’ share of spending on marketplaces was up 5 percent week over week, while millennials’ share was up 4 percent and Gen Xers’ share was up slightly.
Gen Z Klarna users slightly increased their share of spending on electronics week over week in the week ended April 4, while millennials’ and Gen Xers’ share of spending on the category was roughly flat versus the prior week.
For online retailers with the right assortment, COVID-19-induced isolation could prove a good time to capture consumers’ attentions.
Computer Generated Solutions (CGS), an applications and outsourcing services platform, released data on Thursday showing that consumers are still enthusiastically purchasing non-essential items like apparel.
What’s more, they’re willing to adjust expectations on fulfillment times as long as companies communicate any disruptions—and reward their loyalty.
While Americans are extremely focused on health and safety, they’re still finding ways to enjoy their downtime—like augmenting their wardrobes. Nearly half of surveyed shoppers (49 percent) said they were purchasing everyday clothing during the pandemic.
They’re not upset if those purchases arrive later than they normally would, CGS said, because of production delays, reduced staff, or shipping disruptions.
More than half (53 percent) said that they haven’t noticed any such inconveniences in their purchasing experiences to date. More than one-third of shoppers said they had experienced delays, but that the retailers and brands had communicated with them about those issues.
“As long as companies are being proactive to remedy delays and make customers aware of the longer resolution timeline, consumers are less likely to feel any significant service disruptions,” CGS analysts said.
Programs and promotions that spur loyalty are also a must-have, they said. Ninety percent of consumers said free shipping and product discounts would win them over and prompt them to buy during the pandemic.
This strategy could prove especially important for small and local retailers, which have been forced to give up their physical traffic due to store closures.
Currently, 69 percent of shoppers said they were using Amazon and other marketplace sites for their non-essential purchases. With the right promotions and free shipping, smaller businesses could pull market share from the tech giant.
Just 10 percent of consumers said they were shopping directly on brand websites or at local stores, while only 13 percent are shopping department store websites.
“While so much of the retail and wholesale industry has been upended, consumers are continuing to purchase clothing for their everyday lives,” Paul Magel, president of business applications at CGS, said in a statement. “The survey confirms that the abrupt change to work from home and social distancing requires a different type of wardrobe—less spending on luxury items and accessories.”
Analysts advised that rewarding customers through “promotions, membership benefits and individual perks” could be a way to spur sales during these difficult times, and win over a loyal base for months to come.