Through out the lockdown in November and December, we shared daily insights from our consumer study, where we spoke with over 2000 people from across the UK, with the purpose to understand how consumers were feeling and behaving during the current climate.

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2020 isn’t done with us quite yet

As pointed out in our last blog post, there seems to be some hesitancy within the consumer insight industry in predicting the future of2021. We share this uncertainty, especially with new lockdowns across Europe.

However, this means that the findings from our consumer study are as relevant as they were in 2020. We’ve therefore summarised or most interesting findings and predictions below.

Irrational, but still rational

The first article we shared, Customers are people too, was a reminder to self, and others, that consumers are people too. They’re just like you and me, living through the same uncertainties, hopes and fears.

Consumers can also sometimes be irrational. When we experience lack of control, our natural response is to wrest it back, which was the cause of the empty shelves and hoarding during the first lockdown in 2020. But by the time the second lockdown arrived, there was toilet paper for everyone, indicating that we’d gained a sense of control of the “new normal”.

Running out of patience

Despite a vaccination rolling out, the speed of the mutated virus and economic uncertainty is still shaking consumers’ need for predictability and a feeling of security.

The vaccination brings hope for the future, but the waiting is likely to accelerate our impatience for the world the get back to (anew/the next) normal.

Protective and proactive

Judging by the respondents in our survey, it appears that we’ve embraced rational and proactive measures in the fight against the virus. As described in the article, FromSick-‘Care’ to Holistic Well-being, the general consumer response toCOVID-19 was to both limit the chances of catching the virus and to become fitter and healthier, in the process buying more products/services to help attain this goal. 

This was also evident in terms of the new subscriptions we made in the last 12 months (article: Subscription serves the need for agility). These divided between subscriptions to essential purchase-providers that helped us limit the chances of contracting the virus and those we hoped would improve our overall wellbeing.

HolisticWellbeing

Health and wellbeing have been a subject on everyone’s lips in 2020. But, as discussed in the article FromSick-‘Care’ to Holistic Well-being, wellbeing is not just connected to being physically healthy or healthier. Holistic health is also connected to feeling good, with preventive healthcare in mind or not. According to our survey, wellness is therefore more about your personal self, than just making healthy choices.

In line with being more protective rather than proactive, most respondents pursued wellbeing it in the same ways they did before. Yet, as pointed out in the article Time is key for prioritising wellness, it was evident that the pursue of well-being is connected to having time to prioritising wellness activities, whether that being “feel good” rituals or adapting healthier routines into our life.

For brands in the wellness category it’s time to start thinking about your target audience that might have had the intention along, but that just haven’t been able to find the time to prioritise it.

A looming, but invisible health crisis in2021?

Mental health is also an important aspect of “holistic well-being”. Especially in 2021.

Despite the launch of a vaccination programme that brings light at the end of the tunnel, mental health could become more of a concern. Increasing frustration, loneliness, financial concerns, and loss of work are building up as pressures for many of us. As several countries face further lockdowns, mental strain is set to increase through the start of 2021. So, positioning offerings and messaging that are in line with the mental health-conscious segment will be key in 2021.

Rationalised on spending

In Mind the scrutiny of the Contentedly CompromisedConsumer, we discussed how the consumer, based on rational choices, have re-appraised, made changes and are now relatively stable about what they are buying.

Our findings showed that consumers have reduced their spending to what they’ve considered as essential purchases. ‘Non-essentials’ are to some extent still justifiable, especially if they contribute to a personal “feel-good” factor.

Yet, these non-essentials must work harder to make the basket. In the article We need a reminder of the joy of giving, we reported that gifting was an expenditure most consumers had reduced in 2020.

People are being smart with their money, and will take advantage of any price moves and offers, as long as they don’t jeopardise their sensible decisions. If value is genuine, tangible and has immediate impact, that is your best chance to ensure purchase conversion.

Underlying Latent Demand – and its growing

TheCOVID consumer is (still) ‘in’ a compromised state, and will be for a while yet– vaccination and fear of empty(er) shelves due to Brexit are topics of concern.While they wait, many are saving.

But this is not purgatory. Even under Covid-19, the festive season was a source of relief from the bigger ‘crisis’ and many of us therefore treated ourselves with a little Christmas break.

Christmas Break

According to Mintel, the joint hopes of a vaccine and the end of lockdown boosted our sense of escape and acceptance of indulgence over the holidays. Their December report showed that the proportion of people who said they were cutting back on non-essential spending fell to 33% (the lowest level since they started tracking this metric back in April). 

But as Boxing Day arrived, this bubble burst and the willingness to shop was hit hard, suggesting that the thrill of discount spending had waned (for the time being at least). According to retail experts Springboard, UK shoppers spent £1 bn less than on last year’s Boxing Day(dropping to an estimated £2.7 bn), whilst Barclaycard claimed that the average online spend had dropped from £186 last year to £162 (sky.news).

Big expenditure spending coming up

A so-called "revenge spending" phenomenon took place in China, the US, and even Europe during 2020, as some consumers diverted money to luxury items that they would have otherwise have splurged on overseas vacations and restaurant dining.

Will this continue in 2021 as overall consumer confidence relies on successful vaccinations? Revenge spending is unlikely to grow as we plan for summer vacations, but may continue for celebrations like birthdays, weddings and anniversaries.

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The underlying spending demand also becomes evidence in consumers’ intentions and desires to plan ahead. In the article Looking forward: Big Ticket Expenditure, we reported back on how consumers were planning to spend their money. When the respondents were asked about planned ‘big ticket’ purchase within the next12 months, booking a new holiday was the most coveted (30%). Interestingly enough, this desire, increased in line with older generation. (ReadingRecommendation: read more about how to accommodate for eager travellers in the article To travel or not to travel… That’s not the question!)

Our survey also revealed that most consumers still view a car as an essential-purchase that provides a higher level of safety and freedom compared to other means of transportation – it was therefore no surprise that many consumers were planning to purchasing a new car within the next 12 months.As pointed out in “The role of the car has changed since living with Covid-19”, the car is still considered an essential purchase, even among the younger customer segments.

Cars as a third space

Based on data from 2020, Pinterest predicts that people will be looking for ways to make their cars more comfortable and serviceable, as local and national travel will see an uplift in 2021. Furthermore, Pinterest actually expect that cars will become more than just the escape route this year. Cars will become the escape space that consumers use for everything from date night to survival vehicles, transforming cars to a the new “third space” (forbes.com).

Re-position your product range and your target audience

Given that many consumers will re-consider their choices and finances, there is the opportunity for brands to attract new customer segments, though it remains critically important to continue to remain recognisably relevant to existing customers.  

It is also worth noting that while your customers might have had stable spending with you in the past, they could be in a position or a mindset where they want or need to scale back/up for their next purchase.  

Allin all, we’ve learnt that this is a time to show empathy and understanding of your audience. Being consumer centric – or consumer-sensitive – is more important for success than ever.

Brands and Businesses need to re-appraise and re-frame the true and total value their goods and services deliver to their customers. Because essentially, that’s exactly what the consumers are out there doing.

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PS: You can find all of our referred articles on our LinkedIn.