COVID-19 Crisis: Consumer Insights Across Verticals

As cities across the U.S. face another week under shelter-in-place guidelines, daytime internet usage continues to surge, and new methods of connecting are popping up across every platform. From live-stream concerts for charity to Instagram’s new “co-watching feature,” brands continue to adapt to the new at-home lifestyle via virtual platforms. Snapchat has even launched a location-sharing leaderboard to gamify social distancing.

Consumers continue to spend time indoors and are searching for home-centric activities and tips and tricks now more than ever. Pinterest has reported a 16x increase in searches for ‘indoor activities,’ a 4x increase in searches for ‘garden projects,’ and a 3x increase in searches similar to ‘indoor date ideas’ compared to previous weeks. In addition to filling time in the present moment, consumers are searching for ways to prepare for short-term celebrations such as Easter, Mother’s Day, and Father’s Day, as 76% of consumers are unlikely to travel within the next three months.

With schools remaining closed, children have contributed to the biggest spike in TV usage, and increased video gaming is the biggest driver of this trend. Last week, kids spent 55% more time playing video games than in previous weeks. Furthermore, brands have rallied to keep kids at home entertained: Instagram fitness stars like Joe Wicks are picking up 1M+ viewers by streaming morning exercise routines for kids from their YouTube channels. Delish.com is hosting virtual cooking classes for parents and kids. Other parents are turning to free, ad-supported classes like Cosmic Yoga, Art Hub for Kids, and GoNoodle. 

In addition to newfound ways to keep busy at home, consumers are looking to the internet for ways to do social good and care for others from afar. Searches for ‘employee gifts’ increased by 4x, and searches for ‘doctor gifts ideas’ and ‘social worker gifts’ by 2x compared to the week prior, according to Pinterest.

As a large majority of retail stores remain closed for the foreseeable future, retailers and marketers are seeking ways to cut costs any way they can. Unfortunately, this will likely translate into a reduced workforce. Out of 130 executives surveyed, 40% expect layoffs due to the crisis. The luxury fashion industry will likely face steep losses as consumers fear for their financial futures and are refraining from purchases deemed non-essential. 

Accordingly, the global fashion and luxury industry could lose between $450-$600B this year, a larger decline than the sector experienced during the 2008 recession. In good news, however, luxury has seen a revenue comeback after a near -40% from its pre-COVID benchmark, thanks to heavy promotionality and an increase in Facebook spend.

Fashion event cancellations continued over the weekend with the cancellation of New York Fashion Week: Resort 2021 and indefinite postponement of New York Fashion Week: Men’s. In lieu of such cancellations, brands are still seeking out new, virtual ways to make up for these losses. Specifically, in order to stay afloat, many newly-launched brands are redirecting attention to IGTV, reducing marketing budgets, and focusing solely on the fall collections.

Amazon has extended the timeframe of its “essential” product limitations but will begin broadening the list of goods it’ll ship on an item-by-item basis. This ambiguity creates a new challenge for sellers, specifically those with shorter product lead times who risk running out of stock. This service is quite a wakeup call for businesses that rely heavily on Amazon, cannot self-fulfill, and have not diversified selling processes. Yet there is a silver lining for consumers as Amazon is not the only online retailer that can fulfill essential shopping needs, and other online retailers such as Thrive Market, FSA Store, Hello Bello, Hardware World, and Chewy have really stepped up to the plate during the pandemic.

As more users shift to social media for product information and recommendations, influencers are playing a key role in helping drive incremental business for beauty brands. They are not only helping drive short-term demand by requesting more products to use in their DIY tutorials on social media, but they are ultimately helping brands grow their customer base long-term for post-quarantine life.

With social media use increasing week over week, TikTok is yet another platform filling consumer content needs, launching its #HappyAtHome series with the hashtag that has received 6.5B views thus far. The series included a night dedicated to lifestyle and beauty topics last week, featuring well-known TikTok stars and beauty influencers. More brands are starting to acknowledge the booming growth of the platform, with E.L.F. launching a dance challenge promoting CDC’s safety guidelines that has since gone viral.

While the list of beauty brands stepping up to do good during the COVID-19 continues to grow, including Orly, Estee Lauder, and L’Oreal, dermatologists and plastic surgeons may be joining the front lines to help treat COVID-19 patients. Multiple states are waiving licensing requirements in response to COVID-19, which has led some dermatologists to already volunteer, with more potentially joining them as the situation progresses. 

With U.S. airlines experiencing a major setback and preparing for a potential travel shutdown, it’s estimated that airlines around the world will issue $35B in ticket refunds in the second quarter of the year. In all, the airline industry is predicted to burn through $61B in cash by the end of June. The situation is looking just as grim abroad, as British Airways suspended all flights from Gatwick Airport, Britain’s second busiest airport. In a final attempt at survival, the airline decided it would be best to continue operating from the main hub at Heathrow. The U.S. State Department has issued a global level 4 travel advisory, the highest advisory level, meaning that Americans that do decide to travel abroad, for whatever reason, risk losing insurance coverage. 

Such travel restrictions have pushed the hotel sector’s investment nose down even further. U.S. hotel investment sales were already down 21% in 2019, and amidst the global health crisis, will continue to plummet. In response to the continued decline of the travel industry, Airbnb is extending the coronavirus cancellation window and set aside $250M to pay hosts back for missed stays through May 31st.

The trend of creating virtual travel experiences continues. R&R Partners agency created a virtual “Las Vegas” experience, with high-quality videos and still images that can be used during any Zoom meeting — specifically the now-trending happy hours, drinking games, and cocktail parties. Recreating cruise vacations is also trending, and one couple went viral, recreating a canceled cruise by leveraging a TV screen of moving ocean footage from their living room. Finally, webcam live-streams of exotic locations around the world are allowing stuck-at-home travel connoisseurs to experience places on the other side of the world. Virtual views of the Bear Cam in Alaska, the Inbal Hotel in Jerusalem, and the Viltbutiken in Sweden, among others, are offering consumers a much-needed escape from reality.

As event cancellations continue, virtual entertainment has skyrocketed. On Sunday evening, Sir Elton John hosted iHeart Media’s Living Room Concert for America, featuring an incredible lineup of artists performing pre-recorded songs from their homes. The event raised nearly $8M for coronavirus relief, attracting 8.7M viewers across FOX channels. Twitch’s 12-hour livestream, Stream Aid 2020, featured competitive gaming action across numerous titles and raised more than $2.7M for the World Health Organization’s COVID-19 Solidarity Response Fund.

The Summer Olympics in Tokyo was officially rescheduled for July 23rd, 2021, the first time in history the Games has been delayed to another year. The IOC issued a few key decisions about the games, however many questions of logistics still remain. What we know so far: thousands of volunteers who had been offered positions will be retained for next year, spectator tickets will remain valid, and full refunds will be issued to those who can no longer attend. Despite controversy, it was announced that the Olympics branding will still say 2020. National U.S. sports leagues have continued to provide new, unique sources of virtual entertainment while the seasons remained paused. For example, the NHL has launched daily live Q&As with players on Twitter and Instagram as well as a bracket for fans to vote on the Greatest Moments of the 2019-2020 NHL season.

Lastly, some good news for binge-watchers: the influx of internet usage will likely have no effect on internet connectivity. Despite many streaming services’ plans to curtail resolution, ISPs are now saying this is not necessary and that the internet can absolutely handle the upticks in traffic.

As stocks and oil prices continue to fall, reaching their lowest level since 2002, the market’s reaction to the virus is a key topic of financial discussion on social media for at least 29% of users. According to a survey conducted by Brandwatch, 62% of respondents were more concerned about the state of economy compared to the 29% of respondents that were concerned about losing personal investments.

And their concern is rightly validated by top executives of brands and retailers, 40% of whom expect layoffs as a result of the virus. Digital publishers are also increasingly making pay cuts and benefit reductions. As a whole, over 80% of those surveyed expect to miss their forecasts for the year.

After the Senate passed the $2T stimulus bill last week, many companies are working hard to get their share of the deal. The Federal Reserve is also continuing to make efforts to offset the economic impact, revealing a new program that will help make dollars available globally. Beginning April 6th, the program will allow foreign central banks to exchange their Treasury securities for dollars in short-term agreements. 

While B2C marketers see a significant impact on demand, B2B marketers are seeing slightly less of an effect on their business according to a survey from Marketing Week:

36% of B2B marketers have felt a drop in demand compared to 43% of B2C marketers.

49% of B2B marketers are concerned with their hiring new employees compared to 58% of B2C marketers that have paused all new hires.

46% of B2B marketers expect to see a delay in spending on planned technology or infrastructure compared to 51% of B2C marketers.

According to the same study, B2B marketers are also less impacted than B2C marketers by the shift to working from home.

51% of B2B marketers say their organization is very proficient at enabling remote working, compared to 34% of B2C marketers.

42% of B2B marketers say their business will not be compromised by remote working, compared to just 27% of B2C marketers.

While Zoom has taken massive strides over the past few weeks for those WFH, there has been an increase in “Zoom bombers” hacking meetings, which led New York Attorney General Leticia James to question the platform’s data privacy and security practices. The office sent Zoom a letter on Monday, inquiring what measures the platform has put in place to detect hackers and handle this increase in volume. The platform assured users that their privacy, security, and trust are a top priority, and they would happily provide the Attorney General with the requested information.