Covid-19 has changed a lot of things for some of us, including how we dress for work and a new – or freely embraced – love of facial hair.
Your home, your rules right? Yes, but your work-from-home rules are also connected to something bigger: how the coronavirus has upended our spending habits.
Lindsay Drucker Mann, head of Consumer Retail Equity Capital Markets within Goldman Sachs’ Investment Banking Division, said during a recent interview that activities you’d expect to drop off, like buying cruise tickets, are among the things we’re doing less of. But interestingly, we’re also spending less on things like razor blades, deodorant and cosmetics.
She said the changes have been so deep over the last few months that “some of these categories have been running down 10, 20 or 30%, so pretty significant.”
But this is no “run-of-the-mill” recession trend. Drucker Mann said we’re unexpectedly buying things like RVs and campers, items that “are especially surprising in light of the recession and the overall economic dynamics.”
So where else is our money going? We’re putting our money where we spend our time. Spotify data, according to the World Economic Forum, says our weekend listening habit is now essentially a 7-days-a-week lifestyle. In a June CreditCards.com survey, 37% of people said they were providing more generous tips than usual.
And, buying local also appears to have become a pandemic trend; in May, 39% of consumers told research firm Deloitte that they planned to buy more locally sourced items even if it costs more.
We’re also giving to charities. A Community Foundation survey that tracked data from more than 30 regional charitable accounts found grants to charities jumped 80% ($203.1 million) between March and May compared to 2019. Similarly, Candid, a watchdog that tracks charitable giving, found that individual contributions accounted for almost $1.5 billion of charitable grants given to organizations around the world as of mid-April.
So are these changes for good? We don’t know, but as this McKinsey report points out, customers have been open to making purchases in new ways. Grocery delivery being one of these may not be a surprise, but McKinsey also noted buying items online and then picking them up in stores has also taken off. The report also said customers are expected to keep using both services even if Covid-19 is no longer a concern.
Although predictions are just that – who knows, maybe picking out groceries will seem like something from the 1800s – Goldman Sachs’ Drucker Mann said the consensus is that the pandemic has fundamentally changed consumer behavior.
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