Tag Archive for: coronavirus

Harder Times Ahead: Updated Economic Forecast and Survey Results on Consumer Finances and Purchasing

As the COVID-19 Pandemic tightens its grip on America, consumer attitudes regarding financial security and social activities continue to change. Here’s the latest information brands need to strategically prepare for both short-term needs and long-term expectations.

Last week’s news headlines were filled with quite a few anxiety-inducing story lines. We have President Trump remarking that things will get worse before they get betterAmerica crossing the 4 million mark on COVID 19 casesan uptick in unemployment, the use of unmarked federal agents to suppress protests in Portland, spawning solidarity protests around the country, and uncertainty about the contents of the next coronavirus relief bill.  The resurgence of COVID-19, protests for social justice, and a political season of unprecedented polarization has gripped American culture, and it’s anyone’s guess as to how the next four months will evolve, let alone our longer-term future.

Given all the uncertainty and stress, it’s more important than ever for marketers to keep a finger on the pulse of important consumer attitudes and behaviors. To support this need, we at Collage have been conducting an intermittent tracking survey of how 18 to 39-year-old Americans, a group we call the New Wave, are responding to this extraordinary time.  We focus on the New Wave not only because this generation’s preferences will determine the fate of growth for countless brands, but also because the New Wave represents the first generation to grow up in a highly diverse environment. Our tracking survey observes how this group of consumers perceives their financial situation to be changing, and what activities they currently feel comfortable doing. Keep reading to see what we learned from our most recent pulse check taken of more than 1,800 New Wave consumers between July 20-23 as compared to a prior survey taken in mid-June.

New Wave Consumers See Harder Times on the Horizon

The clearest finding from our most recent survey is that New Wave consumers, across race and ethnicity, are more likely to expect their financial situation to get worse over the next month, compared to how they felt just a month ago. Similarly, they’re also much less likely to see their finances improving.

The change in expectation that finances will be worse is largest for Black and Hispanic consumers (9 and 7 percentage point shift, respectively). These responses likely reflect an increase in job insecurity given the re-emergence of social distancing and pausing of re-openings around the country, two actions which disproportionately impact the service industry jobs these segments are more likely to have. We expect these segments to be more price-sensitive in the coming months, especially if Congress fails to extend unemployment support in the next Coronavirus bill.

Consumers Remain Hesitant to Engage in Social Activities that Drive the Economy

Another key indicator in likely economic activity is how comfortable people feel engaging in the social activities which drive personal consumption and job creation. The story here is that of little meaningful change: consumer hesitancy to participate in these activities remains low across the board. We’re four months into a worsening pandemic and unsurprisingly we see that most consumers just aren’t comfortable getting back to life “as it was.” The only substantial difference across multicultural segments is that non-Hispanic white consumers tend to be more comfortable engaging in these social activities, while unacculturated Hispanics tend to be less comfortable overall.

Purchase of Consumer Staples Appears to Be on the Rise, at Least in the Short Term

Despite the greater concern with finances and slightly reduced comfort with public places overall, New Wave consumers report they plan to spend more in a few areas, notably food, personal care, and home care. We see some movement in other categories as well, but the real story is lingering overall hesitancy to increase spending on non-essentials. These two findings could represent a tendency towards “stocking up and hunkering down” in anticipation of renewed social-distancing guidelines or catch-up spending on essential goods that may have been deferred during the first few months of the pandemic. Regardless of the cause, the sustainability of the increase in essentials purchasing depends on what happens with the pandemic and the Coronavirus bill over the next few weeks. Learn more in the download above.

Downturn Will Be Deeper than Previously Forecast, But Return to Growth After 2021 Looks Steep

Economic projections of the COVID-19 Recession have become more pessimistic across the last several months. Indeed, the most likely outcomes envisage no return to the long-term growth rate in consumer expenditure before 2025. That said, forecasts suggest that the depth of the downturn will be matched by a very rapid rate of growth for a few years. If history is any guide, that updraft will coincide with increasing employment and consumer confidence even if absolute levels of expenditure are below those preceding the COVID-19 Recession

Lean In to Multiculturals Now to Ensure Mid-term and Long-term Growth 

While much of the current pandemic response is out of our hands, it’s imperative for brands to begin the process of preparing for the eventual recovery and future-proofing their long-term strategy. When growth returns, which it will, marketers must recognize that this traumatic year has only heightened the importance of multicultural consumers. Between household formation, immigration,and a declining white population, the dominance of multicultural expenditure growth and cultural influence in the medium and long term is a foregone conclusion.

There is simply no way that companies can expect to grow over the next decades without capturing these important consumer segments. The first step to doing that is showing up for them when they need you most. We suggest brands take advantage of the opportunity to show up for these segments in this time of crisis. People will remember who lent a helping hand and advocated for their needs, and who did not. People will remember efforts to improve the representation of multicultural consumers and their stories in advertising. When the pandemic ends and Americans again feel comfortable spending and taking advantage of your categories, this may make all the difference in the brands and products they choose.

In the download, you will find a sampling of the latest COVID-19 economic projections and implications for multicultural consumers, incorporating a comparison with forecasts released one quarter ago, and the most recent pulse survey on consumer expectations for financial security and social behaviors.

Discover More Insights

The First Deep-Dive into Consumer Behavior in the Time of COVID-19

We are now more than a month into the new normal of the COVID pandemic. Buying patterns have been massively disrupted, millions have lost their jobs with panic buying affecting many categories while others have nearly collapsed.

When it comes to multicultural segments in particular, a few things stand out.  First, culture is a significant determinant of human behavior in this crisis and therefore understanding cultural variation is critical.  Who is stocking up more or less?  Who is listening to influencers more than news and vice versa?  These are questions brands need answers to.

Second, the growth rate of the multicultural population and expenditure in good times is important, but in bad times, that growth rate is critical.  From our scenario modeling, we have seen there is virtually no chance of brand growth in a downturn without successfully activating multicultural consumers.

And finally, multicultural influence on the general population only increases every day.  For brands, that means that building trust and cultural relevance with these segments creates cross-over effects that drive demand across all segments, especially younger white segments.

To successfully address the challenges and take advantage of the opportunities, brands need to understand how culture is intersecting with the current climate to alter attitudes, behaviors, and receptivity to support and outreach.

With this end in mind, Collage Group fielded a study during the last week of March to provide members insights into the attitudes and behaviors of different cultural groups—racial, ethnic, and generational segments—during this time of crisis and uncertainty.   We covered attitudes, COVID mitigation behaviors, employment and finances, buying patterns, time spend, general behaviors and expected future behaviors.

Read below for four top findings from the research. 

Key takeaways

    1. Most people recognize the seriousness of the disease and don’t need to be scared into action.
    2. Avoid alarmist messaging. Remain fact-based and compassionate. Messaging should recognize that people are doing what they can, but can do even more to ensure success.
    3. Hispanic consumers are overwhelmingly feeling the economic impact. And Millennials—a group that has already experienced significant economic hardships due to student loans and the Great Recession—are bracing for more disappointment.
    4. Tell consumers how your brand will support them during these hard times. Offer coupons, extended free trials, etc.  Let them know that you know they’re struggling. This is the time to build connections and trust that can last for years.
    5. Black consumers are more likely than other groups to have bought more food, beverages, personal goods and household goods since the start of the pandemic.
    6. Understand which segments are changing behavior; who to target right now is as important as how to market.
    7. Everyone is spending more time on social media and streaming platforms, but this amplifies the differences in information people receive.  Note that younger consumers, especially younger multicultural consumers use different channels for getting information, relying more on influencers than the news.
    8. Build a culturally fluent channel strategy.  More than ever, brands need to show up in the places where segments retreat into their preferred media bubbles.

Please contact us to learn how our COVID pandemic research can benefit your brand.

Don’t Miss The Latest Insights

The Coronavirus Crisis Research Initiative

The coronavirus crisis is changing everything in ways we never expected. Read more below to understand our research and review custom options for obtaining detailed reporting and proprietary insights.

The coronavirus crisis has now emerged as a once-a-century transformation in the global economy, with radical impacts on trade-flows, consumer behavior, and spending across every industry. Collage Group members are now in the throes of intensive investigation into consumer response across every category.

Two factors reinforce why this initiative is so important.

Cultural differences impact consumer behavior even more a time of crisis.

Cultural backgrounds significantly influence the neuroloigical “defaults” in human behavior, especially when it comes to health.  Consider the progress of COVID-19 in South Korea vs Italy, both democracies in which multigenerational households are common.  The differences could not be starker. Indeed, the difference in outcomes could not explained without recourse to an understanding of differences in culture.

The multicultural contribution to growth increases in an economic downturn.

Multicultural consumers will continue to drive the majority of spending growth through this crisis.  Indeed, the multicultural contribution to growth has historically increased when the economy shrinks.  Indeed, all our projections indicate the contribution can only increase in the future. As you can see from the chart below extracted from our Big Shift research, multicultural response is even more important at this time than in periods of economic strength.

We cover four components in our coronavirus crisis research:

1. Deep Dive Syndicated and Omnibus Survey

Our main survey goes deep into culture factors that are critical to differences in consumer behavior.   We incorporate cultural attitudes that impact health and response to risks to health, such as social proximity conventions, multigenerational contact, fatalism, compliance with authority and other factors.  The difference between the Italian and Korean situation cited above is probably due to these factors in no small part

We will look at a variety of questions including:

    • How does consumer reaction to the coronavirus vary across race, ethnicity, and generation, gender?
    • How do cultural factors such as social proximity, risk aversion and multigenerational interaction impact behavior and motivations across demographics segments?
    • How are consumers across all segments altering purchasing behavior across and within categories, including stockpiling?
    • How are consumers viewing the future, where will they spend when the crisis passes and what will be the long-term effects on behavior?

2. Tracking Survey

Our tracker goes beyond top-line reporting.  We will look at levels of concern in multiple areas (financial, health, etc) as well as with government and media response. We will also track behavior adoption change which can be used by brands to encourage consumers to “do the right thing” and which may be predictive

3. Revised Spend Projections and Brand Response

We will updating our Annual Population and Expenditure analysis. We will look at a variety of questions including:

    • How are population and spending projections likely to be altered across race, ethnicity, generation, and gender?
    • How will these projections alter the outcomes by category?
    • What are emerging examples of effective marketing during the Coronavirus crisis?

4. Custom Solutions

Questions we are currently address on behalf of members  include:

    • How are consumer behaviors changing with respect to my specific category, brand and consumer segments?
    • How are my marketing efforts being perceived by consumers?
    • How is my size of prize changing?

We’d love to hear from you! Talk to us about the benefits of Collage Group’s methodologies.

Dive into More Insights