Two months have passed since the COVID-19 pandemic came into full effect in America, and the state of affairs is still changing every day. To see how consumer attitudes and behaviors have changed since our first study, Scorpion launched a second survey with 1,050 new respondents to gain further insights into how people across the country have adjusted to life with lockdown orders in place.
How have attitudes and behaviors changed?
The outlook on the COVID-19 crisis resolving soon has gotten less optimistic. Back in early April, 73% of respondents in our first study thought the pandemic would resolve itself within 6 months. This figure has dropped to 49% in our latest survey, indicating a slight majority of consumers are erring on the conservative side and preparing for the longer-case scenario.
However, consumers seem to be adjusting to a new normal, demonstrating less anxiety and concern compared to surveyed respondents back in early April. Fears of contracting the virus have dropped from 36% to 31%. Worries over obtaining groceries and other supplies have decreased from 10% to 6.5%. And concerns over unemployment and ability to pay bills have dropped slightly from 8.2% to 7.4% and 15.3% to 14.2%, respectively.
With more consumers getting used to staying and working from home, Internet usage has seen a substantial uptick over the past several weeks. Compared to April, respondents using the Internet 5 or more hours a day have increased in number from 54% to 59%, with those using the Internet 7 or more hours a day jumping from 29% to 36%.
As overall Internet usage has gone up, several online activities have also seen a significant increase from their already heavy use in April:
- Streaming services: 47.1% will use more (37.8% net gain), driven by 18-44 y.o. men
- Mobile browsing: 45.6% will use more (37.7% net gain), driven by 25-44 y.o.s
- Social media: 44.2% will use more (34.0% net gain), driven by 25-44 y.o. men
- Online shopping: 44.0% will use more (32.8% net gain), driven by 35-54 y.o.s
- Online DIY content: 42.8% will use more (36.3% net gain), driven by 25-34 y.o.s
- Online gaming: 31.1% will use more (21.4% net gain), driven by 25-34 y.o. men
- Virtual workouts: 30.3% will use more (20.5% net gain), driven by 18-34 y.o.s
The segment of people working from home has increased their usage of these services the most — by about 18-20% in most of the categories discussed above. Broadcast media consumption is anticipated to increase for 32% of respondents (net gain of 20.7%), heavily driven by males across all age groups. Meanwhile, desktop browsing usage will increase by 38.3% (net gain of 28.3%), again driven by the WFH cohort (slightly higher among 18- to 44-year-olds). The activities with the highest increases among seniors are shopping (29.5%) and social media use (25.7%).
How has spending changed?
With so many regions still shut down and uncertainty lingering, consumers are still postponing social gatherings as well as many typical expenses. Leading the way are medical or dental procedures, with 43% of respondents stating that they’ve postponed healthcare because of the crisis. Next in line are travel (34%), home improvements or repairs (26%), automotive repairs (12%), and large purchases (11%).
What are consumers doing with the money they’re not spending? A large percentage of respondents showed a continued propensity to save: 44% of respondents indicated they would be saving more over the next 6 months. Saving rates were highest among young adults (50% of 25- to 44-year-olds). Furthermore, 78% of savers expected to be employed in 6 months and another 18% indicated it is somewhat likely they will be employed, suggesting these two groups form an economically stable cohort moving forward.
This savings spree has huge revenue implications for commerce, as respondents have indicated that they are ready to get back out and engage with businesses. As soon as COVID-19 is resolved, respondents said they would partake in the following activities immediately or within 3 months:
- Going to the mall: 58% of respondents
- Visiting a movie theater: 44% of respondents
- Eating at a restaurant: 63% of respondents
- Going to the gym or fitness classes: 56% of respondents
- Attending school or sending kids to school: 60% of respondents
- Hiring someone to work in your home: 60% of respondents
Brand Names or Independent Businesses?
While there has been a groundswell of support for small and independent businesses who have been hurting during the pandemic, big brands have seen a surprising amount of engagement as well. More than half (57%) of respondents indicated that they’ve been channeling more business to brand names (highest among 18- to 54-year-old males), citing convenience, the ability to order online, and lower pricing as their motivating factors.
Meanwhile, the 43% who have favored independent brands in the past month also cite convenience and pricing as motivators, but are also driven by a more sentimental third factor: a preference to support small businesses. The tendency to support smaller brands is highest among women, and interestingly, increases with age. Of the groups we surveyed, 45- to 54-year-old women (56%) showed the strongest support for small businesses. of
Other notable findings:
- 62% of people who are are employed for salary/wages prefer big brands
- Self-employed respondents are split evenly between the two options
- 65% of respondents who are working from home (WHF) prefer big brands, while those who still work on-site are split 50/50, suggesting that the WFH segment is accessing big brands online more regularly and that people who are already out of the house for work anyway are more likely to drop into small businesses.
How can businesses stay relevant and top-of-mind?
Increased Internet use since the onset of the COVID-19 hasn’t dulled respondents’ receptiveness to online ads. When asked what they would do after seeing an ad that grabs their attention:
- 33% would click on the ad
- 17% would make it a point to research the company at a later point in time
- 33% may click on the ad depending on their mood at the time
This means that as many as 83% of consumers would process or engage with an ad, compared to just 17% who would ignore it. These brand impressions are significant — 63% of those surveyed said they would either click on an ad from a business they recognize or do more research on them when looking for a product or service. This is a stark contrast to the 24% of respondents who click on top search results regardless of familiarity and the 12% who avoid companies that advertise.
Brands can stay relevant and top-of-mind by not only investing in high-intent digital advertising, such as paid search, but also in brand awareness campaigns across a variety of platforms and channels. After all, respondents found that platforms historically geared towards brand discovery — Facebook (28%), YouTube (19%), and Instagram (14%) — actually delivered relevant ads at a rate that matched or exceeded high-intent platforms, such as Google (16%).
Looking deeper, some underlying trends are apparent:
- Instagram ads are most relevant to 18- to 24-year-olds (both sexes), followed by 25- to 34-year-old females
- Facebook dominates with 35- to 44-year-olds and skews female with older age brackets
- Google is steady across the board with no significant variance
- YouTube skews heavier to males 25-54
Another major advantage of these brand discovery channels is that costs have generally been much lower than paid search. Using brand awareness campaigns in conjunction with paid search also often increases advertising effectiveness by helping brands stand out to consumers when they search for products and services and are ready to buy.
What types of ads are consumers responding to?
Addressing COVID-19 directly in marketing messages has produced a mixed bag of results for brands. Of the people we surveyed, 53.1% said they feel oversaturated with COVID-19 messaging. This is most apparent among 18- to 44-year-olds (58%) and residents of the Midwest (60%). However, a deeper dive reveals ad content and employment status play a big role in how consumers respond to pandemic-related messages.
When asked about the messaging tones they respond to, 58.5% of respondents said they prefer ads that aim to improve morale. Interestingly, this sentiment is highest among respondents who are employed (61%). By comparison, respondents who would rather hear about discounted products and services comprise a large portion of those who are self-employed (52%) and unemployed (47%).
Ultimately, 62.4% of respondents agree COVID-19 ads show that companies take time to care, so marketers would be wise to confront the issue. In doing so, they need to identify how their core audiences are being impacted by COVID-19 and tailor advertising content accordingly.
Beyond the marketing industry, companies from big pharma to tech are doing their part to help various communities through grants, donations, and collaboration. From a human standpoint, this is extremely galvanizing, but from a business perspective, consumers are also taking notice. Asked to choose from a range of options, respondents indicated that after COVID-19 was resolved, they would be most likely to support businesses that:
- Treated their employees responsibly
- Helped the community
- Did not raise prices
What does all this mean for brands?
This second wave of our consumer trends survey has confirmed an earlier hypothesis made in our first study: despite the turmoil caused by the COVID-19 crisis, brands have a golden opportunity to capture the attention and pent-up dollars of consumers now and in the near future. As mentioned in earlier segments of this study, this favorable window is due to a perfect storm of factors:
- Consumers who are spending even larger portions of their days online (59% are online for more than 5 hours a day) favor brands over independent businesses for their lower prices, convenience, and online ordering.
- These same consumers (25- to 44-year-olds) are highly employed, putting off spending, and saving up more. They will form an economically stable segment of the population looking to have pent-up needs met once shutdowns are lifted.
- Digital marketing and advertising are more accessible than ever before, due to the variety of online channels available and the overall lower cost stemming from small businesses suspending their campaigns. These factors make it easier for brands to stay in front of their target consumers online.
- Brand recall is a significant reason why consumers choose to click on an online ad and engage with a business, highlighting the importance of brand awareness efforts.
Understandably, times are difficult and budgets are tight for the majority of businesses across the globe. But when compared to small businesses, franchises have a built-up asset in their brand equity and, generally, have more flexibility with their budgets. Those willing to invest in staying in front of their customers where they spend the most time—online—have the chance to get ahead of their competitors, perhaps permanently, as business starts to pick back up again.
The data in this post is from a study conducted by Robert Tran, Director of Market Research at Scorpion.