The pandemic has changed our shopping habits, but how? A recent study by the consulting firm McKinsey & Co. shows some obvious—and not-so-obvious—changes in consumer behavior due to the Covid-19 economy.
Let us start with the obvious. The report says that physical distancing and stay-at-home mandates have nudged more people to shop online. Growth in online shopping has been especially strong in over-the-counter medicines, groceries and household supplies, and personal care products. But even discretionary categories like skin care and makeup, apparel and jewelry are experiencing a shift away from in-store purchases. (The report notes that some consumer areas, like entertainment at home, consumer electronics and books/magazines/newspapers have grown, but were already predominately online purchases anyway, at 80% (now 84%), 66% (now 72%) and 64% (now 71%) respectively.
Also, people are requiring more “hygiene transparency” in their shopping habits—which means they favor stores and restaurants that post their cleaning priorities and whether they require masks for customers. Interestingly, 79% of consumers intend to continue or increase their use of self-checkout in retail stores. People are also eating more at home, and spending more time indoors than they did, which has boosted at-home fitness purchases and home cooking activities.
Less obvious: the online shopping trend seems to be strongest among people who have over $100,000 in income, and when broken out by generational cohort, the millennials appear to be leading the way. People with under $50,000 in income are actually doing LESS online shopping, perhaps because they have less money to spend overall.
The article says that brands need to ensure strong availability (the product is there in the online store when you want to buy it) and also convey value. The McKinsey report also says that consumers want value for their money. But when, in the history of commerce, pandemic or no, were these things not true?
This article was written by an independent writer for Brewster Financial Planning LLC and is not intended as individualized legal or investment advice