The coronavirus pandemic is changing a lot about the world. Without the ability to enjoy the lifestyle to which they were accustomed, people have been forced to find creative ways to go about their day-to-day lives.
Suddenly, a trip to the grocery store meant longer wait times and the risk of exposure. Schedules went from jam-packed to completely open. Families started spending all their time together at home. Consumers started to learn more do-it-yourself tasks they would not have otherwise. They bought more health and wellness products, continuing an already growing trend in online consumer shopping habits and behavior. They also became more conscious of what they were buying, looking to save money and cut back on waste. Here is how this shift in mindset continues to shape the economy and consumer preferences:
With more time spent at home than usual, consumers are embracing a DIY approach in everything from online education and home decor to patio gardens and homemade wellness products. Consumers might choose to take the DIY route for many reasons, including hesitancy to venture into public places like stores and having more time on their hands with many in-person events canceled.
Now that the home serves as office, school, and living quarters, many people are investing time and money into optimizing their living spaces. Thanks to this nesting tendency, home improvement stores had an excellent start to 2020 compared with 2019, despite the economy on the whole constricting. One home remodeling platform, Houzz, reported a 58% increase in project leads in June, with the most requests for outdoor spaces.
Online and convenience buying increased as people switched to ordering more groceries, household products, and clothing online. Even though consumers became more mindful about their spending on day-to-day products, they were still willing to pay for the convenience and safety of delivery services and other contactless shopping options.
Many of these trends will stick around even after the pandemic has passed. For example, according to McKinsey & Co., 3-6% of China’s new online market share is “sticky,” or likely to remain unchanged, due to older generations who were forced to become more comfortable with digital channels. And among new users of these digital channels in the U.S., 75% said they plan to continue using them even after a return to the next “normal.”
Consider industries like delivery services and e-commerce. Although these industries were growing popular before the pandemic, these services have taken off as consumers moved to more contactless solutions. Many consumers who started getting their groceries delivered during this time, for example, might be less likely to return to the in-person conventional grocery shopping in the future. Another example is financial services, where online and mobile banking use has also increased due to the shift to digital.
In the current state of things, existing companies are thinking just as creatively as new ones in response to consumer needs. For example, at the onset of the pandemic, many consumers rushed to buy cleaning and sanitary supplies — and meanwhile were skipping out on eating at restaurants. In response to the changing habits, one Seattle distillery and restaurant transformed its distillery facility to produce private-label hand sanitizer during the pandemic to stay afloat.
But other creative thinkers are solving problems made apparent by COVID-19. One team, Medlynk, won an MIT-sponsored COVID-19 challenge by creating a model to track the burn-through rate and delivery of medical supplies to most-in-need hospitals. Winning ideas like this — which are extremely relevant and helpful now but also have a market in the future — gives the economy the boost it needs to bounce back.
For entrepreneurs, these changes in customer behavior present a number of opportunities. There is no better breeding ground for innovation than in times of economic uncertainty when businesses have to fight to show their inherent grit. They are forced to think of creative solutions to old problems and demonstrate their resilience — qualities that the world of entrepreneurship may reward. Just as programmable digital computers and superglue were both created out of necessity during World War II, the inventor’s determination and creative problem-solving ability is what made the products so successful.
As consumers shift the ways they think and buy, entrepreneurs have the opportunity to connect with them. Building a new business is about making the customer comfortable and having the flexibility to respond to changing consumer behavior and needs. How can a product or service support a DIY-inclined consumer? Is there a health and wellness angle that hasn’t been considered?
These rising consumer trends — a DIY and nesting mentality, a higher level of comfort with digital platforms, and evolving demands requiring innovative solutions — will continue to shape the economy as consumers spend more online and adjust to our new “normal.”
This article does not constitute legal, accounting or other professional advice. Although the information contained herein is intended to be accurate, Cathay Bank does not assume liability for loss or damage due to reliance on such information.