We are living in a different world than we were before Jan. 30, when the World Health Organization declared the coronavirus an international public health emergency. In fact, we are living in a world that is different from what it was 48 hours ago or 24 hours ago.
Accordingly, a change in consumer psychology – fear and anxiety brought on by the rapid spread of COVID-19 – is causing a run on pantry and household staples, cleaning supplies, and medicines.
Right now we are all walking around with this heightened state of mortality salience and that creates a sense of existential anxiety. While the effects are harder to predict, it does tend to make people more likely to spend in ways that support their core values and support their self-esteem or to spend in ways that they feel says something important about who they are.
In the short term, this uncertainty is a barrier to discretionary shopping in general, as well as a barrier to shopping in stores.
Longer term, it may predispose people to make choices that are based on their underlying sense of identity. So, for example, people may be more likely to choose environmentally-conscious brands in the future, a trend that we already see in our culture. And it may predispose them to indulge in more luxury purchases as significant to their self-esteem – a trend that was phasing out pre-COVID-19.
Right now consumers are in the throes of deep emotional, irrational fears. They are seeking comforting experiences that will bring them a sense of control which in turn will make them more comfortable. Buying things or having the sense of agency that comes from making consumption choices, is one way they can regain a feeling of control and greater comfort.
So they hoard household supplies, not because there is any evidence that they will actually need them, but the very act of buying them gives them comfort.
Consumption plays an important role in the lifestyle of American consumers. That won’t go away. But retailers and marketers are well advised to plan for potential long-term changes that this crisis may bring to their underlying psychology and the values that underpin their purchasing decisions.
In 2020 e-commerce is expected to represent 12% of total retail sales, however, a change in consumer behavior in the first quarter of this year due to the coronavirus can impact the future quarters for 2020 and have a profound impact on holiday sales. As the consumer’s comfort with online shopping becomes higher and technology is more intuitive and ubiquitous, the digital side of the retail business may be stepped up at a faster rate than previous projections. To bring consumers back to stores, retailers should increase cleanliness, consider cross-promoting high-demand items and make them easy to find (quickly) on shelves.