Will Waning COVID-19 Worry Translate Into Higher Retail Sales?
In February 2020, we started surveying consumers just as COVID-19 became part of the conversation in the U.S. When we began, we had no idea that the pandemic would continue to be a factor in our lives more than a year later. This longitudinal study has proven to give some intriguing insights into what consumers are thinking which very well may continue for the next 12  18 months. Our studies focused on how the pandemic was changing consumer shopping habits and behaviors. The good news is that in April 2021, the survey found that 32 percent fewer respondents said that they were either worried or somewhat worried about the Coronavirus than they were a year earlier. Overall, only 59 percent remained worried, compared with a high of 87 percent who felt that way in April, 2020. We did find, however, that consumers are not quite ready to begin spending at pre-pandemic levels. Six in ten respondents continue to cut back on spending from pre-pandemic levels, just a slight increase from a year earlier. This data point is important because it indicates that people are still concerned about their jobs, inflation, and other factors which is not good news for discretionary purchases. Similarly, three out of four consumers surveyed said that their purchase decisions continue to be affected by the aftereffects of the pandemic. Retailers like Lululemon, which reported $1.2B in sales for the first quarter of 2021, may be seeing very encouraging green shoots, but for most retailers, it seems that they would be foolish to believe that everything will magically revert to 2019 levels. Our data indicates that consumers are still very much concerned with how the pandemic continues to affect their personal finances and overall feeling of safety while shopping. Not surprisingly, we found that there were gains made in the perception of in-store shopping safety. This is positive news for brick-and-mortar retailers who long for increased foot traffic. Half of the respondents said that they still were not ready to start trying on clothes in dressing rooms, which has improved from last years 58 percent. Overall, there was a nearly 10 percent improvement in consumers admitting to being less concerned than they were last year when working with a sales associate in-store. Trying on shoes has also shown improvement with 47 percent saying they feel unsafe trying on shoes, compared to last years 53 percent of consumers who did not feel safe trying on shoes. We discovered that one of the biggest challenges will continue to be the beauty counter. With a business that has been built on the experience of trying tester products at the counter before buying, this industry will need to transform how its beauty advisors interact with customers to close the sale. The significant majority of consumers69 percent still feel unsafe trying on cosmetics from a public tester. That number remains unchanged from the height of the pandemic, indicating a seismic shift for the beauty industry. Most of these numbers should continue to improve as people begin to resume their normal lives. However, these numbers do point to a new normal that all businesses will need to address, especially around spending and purchase decision-making. In order for all retailers to regain their appeal, listening to the Voice of the Customer to understand their mindset will become even more critical as we begin to navigate the post-pandemic landscape.