Half of consumers say pandemic has permanently altered spending habits

13 April 2021 Consulting.us 3 min. read
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Half of consumers (48%) globally say the Covid-19 pandemic has permanently changed their consumption habits, according to a recent report from AlixPartners. The consulting firm in January polled more than 7,000 consumers in nine countries, with a focus on sorting consumers into segments based on their pandemic-related anxieties.

Approximately 43% of US consumers told AlixPartners that the pandemic has permanently altered their buying behavior. Consumers in Saudi Arabia were least affected, at 40%, while Japanese consumers reported the highest level of permanent behavior change, at 60%.

The AlixPartners report focused on a new methodology that segments consumers on their anxiety surrounding health (mental and physical) and finances. The cohorts were: “Most Anxious” (highly concerned about both health and finances); “Health Concerned” (more concerned about health than finances); “Budget Constrained” (more concerned about finances than health); and “Least Anxious” (little concerned, relatively, about health or finances).

Health Concerned and Most Anxious consumers were, unsurprisingly, likeliest to experience permanent and significant changes in consumer behavior.

Half of consumers say pandemic has permanently altered spending habits

David Garfield, global leader of the consumer products practice at AlixPartners, said, “Although there is growing hope around the world that consumers will eventually rebound from the pandemic, our new modelling approach reveals that significant numbers will experience long-lasting changes in their buying behaviors – changes that will lead to massive challenges for many companies as well as intriguing new opportunities for others.”

The US had the largest cohort of Most Anxious consumers, at 44% of respondents. The next highest country was France, at 38%, followed by Saudi Arabia, at 37%. Japan (31%), China (31%), and Switzerland (28%) had the smallest Most Anxious cohorts.

Approximately 28% of US consumers reported being extremely or very concerned about their physical and mental health. Younger consumers were likeliest to be concerned about their mental health, at 34% of 18-to-24-year-olds and 30% of 25-to-34-year-olds. Younger segments, which have been hit harder by pandemic unemployment, also had high rates of financial concern, at 34% of 18-to-34-year-olds.

Half of consumers say pandemic has permanently altered spending habits

“As the world prepares to emerge from the pandemic, companies should pay attention to the Most Anxious consumer cohort, as it both skews younger and is showing significant interest in new consumption patterns,” Garfield said.

As most analysts have highlighted, the pandemic has accelerated the consumer shift to ecommerce. The AlixPartners report found that, of the half of consumers who have noted a permanent change in consumption, 37% plan to do more online shopping for clothing and shoes, while 20% plan to do more apparel shopping in-store. Chinese consumers were most enthusiastic, with 70% planning to do more online shopping for apparel, compared to American consumers at 29% on the low end.

However, AlixPartners highlights that a significant portion of consumers still find ecommerce lacking. Though 26% of permanently affected consumers plan to do more grocery shopping online post-pandemic, 27% plan to do more in-store grocery shopping. And though a quarter of permanently changed consumers plan to eat more meals at home, 27% expect to dine more in-person.