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Consumer Sentiment Evolves As COVID-19 and Protests Continue

13 MINUTE READ | June 25, 2020

Consumer Sentiment Evolves As COVID-19 and Protests Continue

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Angela Seits, Strategy & Insights Managing Director

Angela Seits has written this article. More details coming soon.

Consumer Sentiment Evolves As COVID-19 and Protests Continue

In today’s briefing, we’re reviewing consumer insights across verticals and how threats of a second wave of the pandemic, economic turmoil, and the momentum of the Black Lives Matter movement have shaped consumer sentiment and behavior this past week.

As states have begun to partially reopen their economies over the last few weeks, the virus has begun spreading across the southern and western U.S. Texas Governor Greg Abbott announced today that the state will pause any further reopening due to record increases in COVID-19 cases and hospitalizations. According to a CNBC tracker, cases are growing by at least 5% in 26 states across the U.S, threatening the arrival of a second wave. Interestingly, concerns over the outbreak appear to have subsided, despite continued public health risks.

Because of this surge in the Sunbelt, a few states, such as Maine and Louisiana, have put their reopening plans on hold, and many businesses have been forced to rethink their re-opening strategies. And as coronavirus hot spots rage across the country, unemployment claims surpassed 1.5 million this week. Accordingly, consumers have begun to re-evaluate their return to “normal” life. 

The burden of the virus continues to fall inequitably upon certain communities, with recent data revealing deep disparities by race, most dramatically for Black and Indigenous Americans. In addition to health concerns, the economic impact of the virus is also reshaping communities—data from YouGov Direct indicates that 62% of LGBQT+ Americans are concerned that places specifically for the queer community won’t be able to re-open after COVID.

At about 104 days since the U.S. declared a national state of emergency, we’ve reached a pivotal moment where the public health crisis and its economic impact comes into collision with calls for social justice and action against racial discrimination. When asked this week whether local and state governments should prioritize protests or the coronavirus, a majority of Americans say both equally.

Although many stores have reopened across the U.S, the recent surge in confirmed cases has renewed safety concerns among consumers and many are evaluating individual stores’ safety precautions before deciding to shop there. 

According to the Brandwatch Daily Bulletin, when deciding whether or not to visit a store, the most prominent measure of consumer consideration when shopping is whether the store requires all shoppers to wear masks. The next two most important measures are social distancing signage and enforcement, and instituting capacity limits.

As concern for in-store shopping heightens, e-commerce continues to shift. Specifically, the pandemic has caused a major boom in the online fashion resale market. Depop, the Gen Z-based fashion resale site and a dark-horse competitor to Poshmark and TheRealReal has seen a 300% increase in items sold since January, compared to the same period last year. While most retailers continue to bolster their e-commerce offerings, TJ Maxx is actually doing the exact opposite. In fact, the discount chain store has stopped taking online orders as the added expense of shipping and returns is not conducive for the retailer.

In the early days of the pandemic, athleisure revenue soared, as shoppers sought out casual and comfy clothes for staying at-home. However, according to WITHIN Retail Pulse, shopping patterns are returning close to normal as summer kicks off, while denim posts its second-straight +20% revenue day.

Criticism of performative #BLM efforts

Following the death of George Floyd on May 25th, the mass international protests that followed suit and the continued momentum of the Black Lives Matter movement on the streets and online, fashion retailers have been quick to align themselves with the movement, publicly denouncing racism, discrimination, and violence via posts on their social media accounts. 

However, despite their expressions of solidarity, many members of the Black community have been critical of retailers’ lackluster and performative efforts. Claims of hypocrisy have dominated social media and consumers are demanding that brands do more than post their alignment with the movement, signifying a call for action and real change in the fashion industry.

News from NewFronts

The Digital Content NewFronts, an annual marketing showcase held by the Interactive Advertising Bureau (IAB), began this Monday via live-stream presentations. Based off of TV upfronts, the NewFronts allow key digital media players to market new programming, ad formats and capabilities to brands, marketers and agencies. Some highlights from the past few days include:

  • Hulu made its first NewFront presentation as part of Walt Disney, introducing GatewayGo, a new transactional ad format that will allow viewers to interact with a commercial and then take action on a second screen, (e.g., make a purchase or access unique offers).

  • Roku, the video streaming platform, kicked off the NewFront showcase by highlighting its new premium advertising tier, Roku Reserve. This tier guarantees a brand’s commercials will run in only top-shelf video programs, rivaling competitor offerings such as YouTube Select and Facebook Reserve.

  • Snapchat’s presentation discussed the platform’s pivotal role in the racial justice landscape and emphasized its ongoing efforts to promote diversity in shows and news. Furthermore, the platform proudly acknowledged its young and progressive audience, promising to ensure the generation of 13-24 years olds is appropriately informed.

Streaming goes data-driven

In the ever-evolving streaming world, music streaming services are launching unique new features to provide increased data and measurement tools for users. Spotify is testing a new feature called In App Offers, aimed at eliminating repetition in audio ads. The feature allows consumers to claim promotions directly within the Spotify app and will provide marketers with improved measurement and targeting tools, similar to that of display advertising.

Pandora is following in its footsteps. The streaming service, owned by SiriusXM, launched new tools that provide podcast hosts with more data on their audiences, making the streaming service more competitive with Apple and Spotify. This move comes just a day after SiriusXM acquired the podcast management platform, Simplecast, further expanding Pandora’s monetization capabilities.

At-home celebrations continue

Although many of the typical summer entertainment and activities are cancelled this year, consumers are still searching for ways to recreate the festivity at home and celebrate the summer season in smaller groups. This week, Pinterest saw a surge in themed-party searches, with a 2x increase in searches for “tropical birthday” and “pool games for adults.”  Pinners are also searching for ways to recreate the magic of summer concerts at home, generating a 4x increase in searches for “record player setup,” as well as creating at-home movie nights in lieu of moving theater outings (5x increase in searches for “movie theater rooms”).

Some big news for tech’s key players

Apple announced new privacy changes to its iOS 14 software that will have significant implications for how advertisers and media buyers target and measure consumers on its devices. The changes, announced at Apple’s Worldwide Developers Conference, will make it more difficult to track iOS users across apps and websites as well as make it more challenging for marketers to determine which tactics contribute to sales or conversions. This move signifies a major shift for the entire industry as it will disrupt how digital advertisers operate.

For the first time in over a decade, Google U.S. ad revenues will fall 5.3% this year, while its competitors Facebook and Amazon experience continued growth. Google’s revenue decline is primarily due to a significant drop in consumer demand for travel services and therefore the pullback of travel advertiser spending, which has historically contributed significantly to Google’s bottom line. 

Amazon, on the other hand, is still seeing strong demand for its online products and because it does not cater specifically to the travel industry, it has remained largely resilient the past few months. Facebook is predicted to grow its U.S. digital ad revenues by nearly 5 percent this year, with Instagram fueling much of that growth. However, it remains unclear how the existing  Facebook ad boycott will affect its revenues, if at all, as Facebook has historically come out unscathed following previous scandals. 

Finally, after a 15 years partnership, Apple has confirmed it will move away from Intel, and instead design its own processors for all new Mac computers. The full transition from Intel to Apple chips will likely take around two years, signifying the increasing power and independence of the tech company within its competitive landscape.

Other tech tidbits

  • As companies in the U.S. continue to reopen, many are investing in a range of new technologies to improve cleanliness and sanitation in the workplace. According to M/A/R/C research, 58% of companies are investing in smart personal hygiene devices, 36% in smartphone tracking and 36% in contactless sensors. Furthermore, when surveyed about the leading trends that will impact businesses during post-coronavirus recovery, 32% of U.S directors believed “acceleration of digital transformation” will be one of the most impactful trends.

  • According to an Omnisend study, despite a boom in email opens during COVID-19 period, there has not been a spike in clicks. It seems that while consumers remained interested in shopping during quarantine and open to receiving brand communications, they were more likely to browse emails than actually act upon them. However, this need-based consumer sentiment has begun to shift, as conversions are up 31%, signaling a shift to a COVID-19 related intent-based shopping mindset.

Unemployment claims are high, but slowing down

U.S unemployment claims topped 1 million for the 14th week as 1.5 million workers filed new claims for state unemployment insurance last week. This number brings the total to 19.5 million, down from the peak point of lockdown, when unemployment hit 25 million. 

Finances remain top-of-mind for consumers, especially with the results of economic fallout becoming more apparent and no additional round of stimulus checks in sight. According to the Brandwatch Daily Bulletin, mentions of money management between March and May 2020 were up 36% compared to the same period in the last three years. Mentions began rising at the start of the lockdown and remain high, as consumers are still actively seeking advice about money, with 424K mentions of mortgages, 124K mentions of savings and 109K mentions of investing.

Rising workforce confidence

In the wake of the pandemic’s first wave, employers are beginning to re-evaluate their hiring practices. Some businesses are seeking to re-hire their top employees who were laid off or furloughed, while others are looking to hire new talent in new ways such as drive-up job fairs and virtual interviews.

According to LinkedIn’s Workforce Confidence index, U.S. workers’ outlook on their jobs, finances and careers has finally begun to improve. This shift in opinion has been driven partially by freelancers and contractors, who are being increasingly hired by employers on a project-basis instead of them rehiring full time employees. Some other key findings from the Index include:

  • Professions in the Plains and Rocky Mountain regions had the most significant jump in confidence the past month.

  • Attitudes on return to work vary greatly between industries. Workers in retail, construction, manufacturing and travel show the highest likelihood of either being back on site or willing to return to work.

  • Small business employees are more eager than their larger-company counterparts to get back to the workplace.

As the European Union and United Kingdom announce plans to open their borders for tourism, it appears American travelers will be excluded according to draft lists seen by The New York Times. New polling from Morning Consult shows that much of the public is concerned about the potential health risks. In the countries polled, Italians were most receptive to allowing in tourists and the British were the least.

In the US, New York, New Jersey, and Connecticut will require visitors from coronavirus hotspots to quarantine for 14 days upon entering their states.

The Trump administration announced it will be suspending some employment-based visas for foreigners to protect American workers as the economy recovers from the pandemic. The suspension will stay in place through the end of the year and will not immediately impact workers already in the U.S.

Disney has postponed the scheduled reopening of Disneyland in wake of growing concern from employees over the rising number of confirmed cases in California. The park has remained closed since March, and had previously announced it planned to re-open on July 17th. Updated plans will be announced after state officials provide theme park re-opening guidelines after July 4th. Following in Disneyland’s footsteps, many of the Walt Disney World employees have begun petitions to delay the July 11th planned re-opening of the Florida park as well.

As many consumers remain hesitant to return to public transportation of any kind, interest in cycling and scooters on social media has reached a 3-year high, according to the BrandWatch Daily Bulletin. This sudden surge in scooter and cycling mentions aligns with Google Trends data, which reported that search interest in bicycles hit a five-year high in May. As people head back into the office and return to varying degrees of normalcy, these search trends suggest that more consumers will opt for a bike or scooter to get around, to improve their mental and physical health, and to avoid crowded, public methods of transportation.

Traditionally, CPG brands lean into summer events and messaging around summer gatherings. However, amidst fears of a second wave, many have pivoted their messaging to encourage socially-distant  fun this summer. Dos Equis, the Heineken-owned beer brand, is one of the many brands that’s tapped into at-home alternatives to experiential advertising in order to generate buzz. As part of its summer campaign, Dos Equis created a six-foot long cooler, inviting anyone who purchases the beer on June 26th to enter the cooler giveaway. This giveaway follows a larger trend this summer, as CPG brands seek to create experiences they can send straight to consumers’ homes.

Lockdown has definitely altered consumer spending and eating habits as consumers have shifted priorities from “want” to “need” focused buying. The pandemic has not only increased consumer spending on essentials, it has also accelerated e-commerce as online grocery shopping becomes a priority channel for major grocery brands.

Along with shopping habits, eating habits have also been altered by the pandemic, and according to the Brandwatch Daily Bulletin, creating homemade pizza from scratch has become quite a quarantine fad. In comparison with March to May 2019, social mentions of “home made” alongside pizza are up 450% this year. However, this doesn’t mean consumers no longer  have an appetite for takeout.

In fact, Brandwatch reports that people are most likely to talk about takeout pizza on Friday, as a quick meal after a long week; whereas, they’re most likely to discuss making homemade pizza on Saturday, as a fun, weekend activity.

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