Consumer Behavior During COVID-19 — Part 1

There’s no doubt that consumer behavior has shifted rapidly due to the spread of COVID-19.

Federal guidelines from March 16, 2020 include recommendations to stay home, avoid restaurants and bars (opt for pickup or delivery instead), avoid gatherings of 10 or more people, limit travel, work from home if possible, avoid contact with older or at-risk people and practice good hygiene. State and local governments have also issued more specific instructions—many communities have closed schools and implemented shelter-in-place rules. All in all, more people are staying home and avoiding public spaces, so they are looking for home-based alternatives to daily routines and spending more time online.

We are now witnessing a decrease in overall consumer spending, while at the same time seeing an increase in online purchases, especially within certain product categories. According to Business Insider, in a survey conducted at the end of February, 40% of Millennials stated that they are cutting back on spending, but 30% are shopping online more often. Millennials have shown the biggest change in behavior as it relates to the pandemic, but their overall trajectory tracks with other age groups— spending is down, but when people spend, it’s increasingly online. The growth of eCommerce was already a steady reality, but the trend has accelerated rapidly in the current environment, as it becomes the only viable channel of revenue for many sellers.

So what can sellers expect for the foreseeable future? How are changes in behavior influencing the product categories that are selling right now? As usual, if you focus on your customers, you can’t go wrong. We cover some of the categories that are in demand right now, and will have more for you in upcoming posts on our blog.

More people eating at home means Home & Kitchen essentials are still in demand, like cookware, spices, meat thermometers, and mixers.

This has been one of the biggest shifts in the current environment. Restaurant services are mostly limited to pickup and delivery, and with more people in lockdown, home cooking is on the rise while meal kits increase in popularity, too.

According to NPR, people who don’t know how to cook are starting to get tired of their basic nourishment. But thanks to grocery delivery, more people will be able to get the specific ingredients they need to make more interesting meals. Downloads of the Instacart delivery app increased by 218% in the month of March, along with 160% for Walmart and 124% for Shipt, based on data from Statistica.

This trend makes sense—people want to stay safe and avoid getting sick in public, and they also don’t want to make a trip to the store only to discover that the items they wanted are out of stock. Getting groceries delivered makes meal-planning and recipe use much easier.

Once consumers adjust to the new reality, we do expect that supplies of goods will stabilize. Nick Vyas, director for USC Marshall’s master’s program in global supply chain management, expects to “see the impact through the third quarter before the supply chain stabilizes and normalizes.” However, some of these current consumer behaviors will likely be habit-forming, especially behaviors like grocery delivery, which was already trending up before the pandemic.

A look at the Movers & Shakers on Amazon shows that items like vegetable seeds, meat thermometers, electric cookers, baking sheets, and mixing bowls are moving up in sales rank for the Home & Kitchen category.

With bars shutting down for now, we also expect to see people get a little creative with the cocktail recipes at home. Virtual happy hours and Zoom gatherings are filling in the void, to help maintain a sense of connection. In some ways, we’ve grown closer to the people we care about despite the distance. We know, because we’ve hosted a few virtual happy hours with our Feedonomics team!

People are spending more time online and in front of screens, which means home entertainment products and electronics are in demand, as well as lounge wear and comfort items for the living room.

YouTube recently announced that it will show videos in Standard Definition by default, to account for increased bandwidth demands, so we know more people are spending time online and consuming video. So make sure you’re opting your ads into YouTube to reach this growing audience, especially now that Google is allowing Shopping Ads to show on YouTube, Gmail, and Display as well.

Opt your Shopping Ads into YouTube, Gmail, and Discover to make sure you’re reaching a growing audience.

Techcrunch recently published an article about the increase in screen time according to Nielsen data. Historically, in times of crisis, TV usage goes way up.

Naturally some of this activity can be attributed to watching the news more, but new subscriptions to Netflix also went up; Netflix was one of the companies that did relatively well during the 2008 recession. Couple the increase in streaming subscriptions with the closing of movie theaters across the country, and you have a need for comfortable home entertainment.

A look at Amazon’s Movers & Shakers for the Electronics category shows an increase in sales rank for televisions, WiFi extenders and routers, laptops, sound bars and gaming accessories, among other things. Cell phone stands and chargers are also in demand.

Online gaming has also surged. Steam, Microsoft, Sony, and Nintendo have seen record numbers for online gaming. Gaming increasingly functions as a means of socializing with friends while people stay home, and it provides a venue for competition at a time when sports leagues are on hiatus. We can see that gaming monitors and headsets are increasing their sales rank, and by extension, we expect that home gaming setups will continue to improve with chairs, keyboards, mice, and sound systems.

We’re also seeing slippers and slides, comfortable pants, shorts and t-shirts continue to sell.

People who are able to work from home are looking to improve or set up their home offices. This has an impact across a range of product categories, from electronics to decor to coffee machines.

There are many more people are working from home now than a month ago. This is something that we expect to see even after the COVID-19 environment stabilizes. Many companies will seek to future-proof their workforce to prepare for events like this, and other companies will develop remote employee workflows today that they will continue to use as they grow.

Pinterest sent us a message sharing some of the trending searches on their platform. They highlighted a “170% increase in ‘working from home’ searches in the last two weeks,” signalling that people are looking for ways to organize their spaces and create a productive environment.

Source: Pinterest

Home office furniture is one category that we’d expect to do well, especially when people start looking to upgrade some of their equipment after spending a few weeks working at a setup that might have been previously passable for short stretches of time. As people adjust to the new routines, we believe that they’ll start looking to optimize their environments for the long haul.

Do people need room dividers? Sound-blocking solutions? There are new opportunities to market to the parent with a kid at home, the worker who prefers to move around throughout the day, and the salesperson with a headset from 2005. Workers will definitely look to stock up on supplies that they had in the office. Basic things like pens, paper, tape, notepads, and printer ink will be used with greater frequency. How’s the coffee situation? What’s the new routine?

Productivity tips and product suggestions will guide a lot of remote workers who are getting used to the lifestyle. Space can be at a premium, so workers often need a dedicated space to boost productivity, but also the flexibility and creature comforts to break up the monotony.

Monitors and headsets are moving up the sales ranking on Amazon’s Movers & Shakers Electronics category. Remote workers may also use some self-care products at home that they would have been shy to use in the office. These include things like blue light filtering glasses, neck and back braces, massage cushions, and other items that make working at a desk more comfortable.

More family time and kids home from school creates an increased demand for educational products, toys, games, crafts, electronics, and books.

As of March 26, 46 states have closed their schools. The kids are home, public spaces are closed, and we’re trapped with the same few people every day (that’s a joke, of course it has been a treat to get some extra time with the people we love)! To stay occupied, people are looking for new interactive experiences for the whole family.

Board games and puzzles are selling out. It’s nice to see the return of some round-the-table family classics. Parents are looking for other things that can keep their children stimulated and entertained while also reducing the guilt of increased screen time. Sidewalk chalk and crafting supplies are popular, as are art supplies and yard games. Imagine summer vacation, but without the help of summer camp and friend’s houses to keep the kids busy. That’s what many parents are looking at right now, but with an additional desire to educate their children while they miss school.

According to Google Trends, searches for “homeschooling” topics are higher right now than they’ve been at any point over the past year, even higher than they were in mid-August, when many homeschoolers were preparing for another semester.

Pinterest also highlighted a major increase in searches for homeschool pins, and we see that things that educational tablets, workbooks, and STEM games and toys are doing well on Amazon. Similar to office supplies, we expect school supplies sales to ramp up, as well.

Source: Pinterest

Facilitating a learning environment is similar to creating a work office. People want to create some dedicated time or space for school work, while still keeping it comfortable enough to be fun and flexible.

We will be back with a second installment of this topic to examine other product categories that are in demand right now!

Keep an eye on our blog for more posts like this in the near-future. A greater portion of commerce is now happening online, so having a highly optimized data feed will help sellers stand out from the pack. As always, Feedonomics is ready to help you with best-in-class service and kickass technology! Feed On!