QUICK READ: The polls on consumer behavior as a result of the pandemic don’t make sense. What consumers say in polls and what they actually do are two different things and I believe they are ready to spend again because buying makes them happy.
According to the sixth EY Future Consumer Index, people are more worried about their health, families and futures than they were in October 2020, when the last Index was published. Many expect life to get harder, not easier. People’s concerns and what they value will continue to evolve, including:
- 63% of consumers said price will drive their purchasing choices three years from now;
- 69% of consumers believe brands must positively change the world; and
- 62% of consumers would share personal data for healthier product recommendations.
So, where to start. Sure, some purchases are driven by price, but there are a ton of product choices that are NOT driven by price. Apple’s newest iPhone, for example, has set records in sales even though. The 5G modem in the phone is slow. At Costco, flat-screen TVs are selling very well, and the higher-priced models are often sold out. Price may drive a purchase decision for peanut butter and salads but not for a lot of other products.
Brands must change the world? Of course, but that’s not going o come between them and their pleasures. We all want brands to be socially responsible, but consumers will not hold brands accountable unless they clearly demonstrate stupidity like My Pillow and Goya.
Healthier product recommendations? OK…Millennials are on track to be the unhealthiest generation in our history. Our nation is has a problem with obesity, and it costs us billions in healthcare costs. Consumers want a McDonalds Quarter Pounder without the fat and calories, but that’s not going to happen.
Nielsen recently wrote “many U.S. consumers began expressing an eagerness to start spending again late last year, and now it seems as though brands and advertisers are starting to catch up. The good news for those brands is that a growing number of consumers believe 2021 will be the year that they will be able to resume their normal activities, and the vast majority of those activities involve spending money”.
Given that many consumers put certain large purchases on hold last year, we expect reemergence to be coupled with shifting spending patterns for larger purchases. For example, nearly half of adults 35-49 and 45% of adults 18-34 made a purchase of $500 or more last year, but those purchases were heavily centered around technology, household equipment, home improvements, and clothing. With COVID restrictions easing, 40% of adults 18 and older say a new or used vehicle is in their future, and 20% say they intend to buy a new home in the next 12 months.Nielsen
Polls are answered based on how consumers want others to see them not on reality. I’ve already seen traffic at retailers increasing and the people shopping at Costco yesterday were spending money like they printed it themselves.
Coke, Delta, and UPS have all taken a stand against the new voting laws in Georgia, which is a no-brainer but are consumers going to give up their favorite brands because they have remained silent? I don’t think so.
Brands need to focus on delivering on the brand promise, which is customer satisfaction. Listen to consumers on social media, strengthen supply chains, drive sell-through with POP displays, and use FSIs. Hard good brands need to focus on customer service that rivals Apple and Amazon. That’s what will drive sales.