COVID-19 Crisis: Early April Consumer Insights Across Verticals

Similar to the rest of the world out there, we’re sure your days are probably running together by now. But luckily, we are officially halfway through this week. If you didn’t catch the premiere of The Bachelor spinoff ‘Listen to Your Heart’ on Monday night, do yourself a favor and watch a couple of clips for a good mid-week laugh. 

We hear it’s supposed to be the most dramatic season yet. Now onto the briefing. 

In comparison to last week, consumer concern is up an additional 7%, according to the most recent Coresight US survey. Because the majority of people are concerned about themselves and others getting sick, almost 50% are making more online purchases instead of going to the store for essential household goods.

It is interesting, however, that the percentages of food and health products purchased have decreased week over week, which is likely due to consumer stockpiling at the onset of quarantine. This development comes at a pivotal time as Amazon just announced it would allow some sellers to begin shipping nonessential items from Amazon distribution centers once again.

These days, it seems that everyone is tapping on influencers’ shoulders in one way or another, and the World Health Organization is the latest to do so. The WHO recently enlisted a virtual influencer, CGI Instagram star Knox Frost with over 1M followers, to solicit donations to coronavirus relief funds and share informative PSAs. The organization’s decision to leverage a virtual influencer is a first for the philanthropy space.

Although Knox Frost is technically not real in a human sense, his social posts lean into authentic issues like anxiety, loneliness, and mental health, which will allow the WHO to connect with the sometimes tough-to-reach Gen Z and millennial audiences.

Lastly, to fill the seemingly endless hours at home, cord-cutting and opting to binge-watch internet streaming is the new normal, aside from baking Chrissy Teigan’s infamous banana bread, of course. Since the COVID-19 outbreak, U.S. consumers have reportedly spent over 50% more time streaming video and watching movies at home, while 44% of people are watching more news on live TV and browsing social media.

Of these streaming platforms, 74% of users are watching more Netflix, which can be partially attributed to the show’s latest hit, ‘Tiger King.’ The show drew a staggering 34.3M viewers in its first ten days and has been the #1 show on the service for the past two weeks. For cultural context, it’s only second in viewership to the 3rd season of ‘Stranger Things.’

Let’s take a closer look at insights across industry verticals:

Retail brands are pivoting more and more towards charitable efforts, including donating to COVID-19 relief funds, supporting struggling small businesses, and manufacturing protective gear for healthcare workers. Denim brands such as AG and Levi’s have committed $3M and $1M, respectively, to support communities impacted by COVID-19, such as the COVID-19 LA County Response Fund. Neighborhood Goods, a traditional department store, has launched a retail platform called the Commons, which aims to help small retail brands during the pandemic by allowing them to showcase their products onsite at no cost. Finally, fashion brands, such as Buck Mason, Hedley and Bennett, Katie May, and LA apparel, to name a few, are now producing masks and donating to workers or selling to consumers with the proceeds going to COVID-19 support funds or laid-off employees.

While the entire retail industry continues to struggle amidst sustained store closures (according to Vogue, U.S. retailers saw overall traffic plummet 98% during the last week of March), certain retail categories such as activewear, leisurewear, and underwear have actually seen an uptick in sales during quarantine. In addition to the major athleisure players — namely Lululemon and Nike, smaller brands have also seen increased sales.

Mindd, an underwear and bra startup, has seen a staggering 800% increase in website traffic. Full-service retailers, such as Nordstrom and Neiman Marcus, are adapting to these consumption trends by creating quarantine-specific landing pages catered to cozy, home-bound items such as joggers, skincare, candles, and accent pillows.

In other fashion news, Net-a-Porter, a luxury e-commerce brand, is pioneering a new trend in e-commerce by partnering with multiple Chinese fashion designers to create avatar skins for the new virtual game by Nintendo, Animal Crossing: New Horizons. Net-a-Porter is one of the first fashion brands to dive into the virtual-gaming space, and it will likely serve as a model for other brands looking to sell “virtually-first” and boost brand exposure to a Gen Z audience. Finally, IG Live continues to surge in popularity, with viewership up 80% last month. 

In the wake of store closings, retail brands across the categories have hopped aboard the trend, leveraging IG Live as a replacement for canceled fashion shows and music festivals. Some examples include Revolve partnering with fitness influencers to stream live daily at-home workouts, Chanel commissioning Belgian singer Angele to serenade viewers, and Rihanna hosting the Fenty Social Club with live DJ sets and performances. 

As tutorials and DIY content have taken the beauty industry by storm, IGTV and IG Live are driving increased engagement levels. Time spent on Instagram and Facebook Live has risen by 70% since the outbreak began, and IGTV engagements have increased 39-59% in March and April compared to November and December in 2019. Brands that were previously dormant on the platform, including Glossier, KKW Beauty, and MAC cosmetics, to name a few, are now sharing more and more high-quality content as engagement levels spike. 

According to Pinterest, the platform is also seeing a significant lift in ideas for ‘spa day at home’ (+105%) and ‘DIY manicure at home’ (+49%). And interestingly, just because consumers are staying home does not mean they are refraining from playing with their makeup. The platform saw a 2x increase in ‘fun makeup looks’ and a 3x increase in ‘glow up checklist ’ last week.

As we continue to see week after week, beauty brands are quickly adapting customer strategies to determine how to best position products, events, and social content. Annual staples like trade shows, events, and product launches are quickly transitioning to online-only, including multiple brands releasing hand sanitizers to sell directly to consumers, as opposed to only offering manufacturing services for charitable purposes. Additionally, beauty and wellness brands are beginning to advertise immune-boosting supplements and vitamins as more consumers are concerned about staying healthy — taking a proactive versus reactive approach to personal health and wellness. Other brands are building and supporting online communities by building playlists, promoting at-home essentials, hosting virtual happy hours and product demonstrations, or even launching a hotline for at-home beauty help. 

Travel-related brands continue to pivot marketing strategies and advertising messaging in any way possible. With fewer customers driving cars, auto insurers are now advertising refund programs. For instance, State Farm is promoting its Good Neighbor Relief Program, which will refund up to $2B to its auto insurance customers. In the same vein, automobile brands have revamped messaging to promote shelter-in-place rulings. Fiat Chrysler Automobiles launched the #StayOffTheRoad digital campaign, encompassing a variety of subsidiary brands such as Jeep, Dodge, and Ram, encouraging consumers to limit car travel and #StayHome.

Environmentalists are now predicting that the COVID-19 crisis will likely have a mixed impact on the environment. In good news, traffic levels are estimated to be down 35% compared to last year, resulting in decreased air pollution and a nearly 50% drop in carbon monoxide. And as travel and overseas manufacturing remain halted, greenhouse gas emissions and air travel pollution will continue to drop. The caveat to this reduction in traffic and pollution, however, is that the pandemic has generated a massive increase in global waste, with a spike in medical waste, single-use plastics, and other protective gear. 

In other news, the pandemic may actually result in more affordable housing. While big hotel brands and short-term rentals like Airbnb have seen a flood of cancellations, this sudden travel downturn may create a surge in units available for traditional housing/apartment rentals, potentially lowering rental prices across the world.

NBCUniversal’s consumer-first streaming service, Peacock, is slated to launch today. The new streaming network, exclusively available to Comcast subscribers, will feature sponsors such as Capital One, L’Oréal USA, Target, and Verizon — all of which purchased ad deals ranging from $15- $25M. Peacock will incorporate several unique ad models, including ShoppableTV, which allows viewers to buy items directly from shows they are watching as well as 60-second ad breaks called prime pods.

As shelter in place extends further into the late spring, the sports industry is doing its very best to innovate, but still suffering notable losses. Most dramatically being ESPN, which has seen a 57% drop in ratings since March 31st, and a 70% drop for the first week of April. Despite its attempts to find alternative programming, such as streaming live events, replaying classic sports games, and airing famous sports documentaries, the network is now asking its 100 highest-paid employees to take 15% pay cuts. In other countries, such as Japan and Belgium, sports leagues have resumed, but with a new twist: filling stadiums with mannequins and dummies dressed in jerseys to boost home-team morale.

In other entertainment news, SNL returned this past Saturday with its first “WFH” episode, featuring at-home video clips taken by the show’s biggest stars. The NBA’s live-streamed HORSE challenge aired on Sunday, featuring NBA mega-stars Trae Young, Cris Paul, and Zach LaVine. While the event did raise over $200K for coronavirus relief funds, it was actually seen as a flop amongst viewers, due to poor video quality, audio glitches, and lower-than-anticipated competition. 

According to a Coresight US survey, one in ten adults says they have now lost their jobs. Young adults are one of the age groups hit hardest by the catastrophic number of layoffs and furloughs, with about 15% of the 18–29 and 30–44 age groups saying they have already lost their jobs. Though, only 6.7% of 45–60-year-olds say they have lost their job since the pandemic crisis.

While the number of unemployed workers in the U.S. will likely continue to climb (currently over 16M have filed for unemployment benefits), over one-third of renters in the U.S. did not pay any part of their rent this month, an 18% increase from this time last year. This dip is a clear reflection of the sky-high unemployment figures, which is speculated to hit 15% by the end of the month. As a result, young adults are resorting to open discussions on social media about how to strategically take money out of a 401K to pay rent and other bills.

Unfortunately, as these numbers grow, users are increasingly pessimistic about the labor market. According to a survey conducted by the Federal Reserve in March, 50.9% of consumers expect unemployment to be worse a year from now, an increase from February’s 34.2%. 

While B2B purchasing may be down, research and learning are not. According to B2B CEO Michael Brenner, daily B2B keyword searches are down an average of 35% across more than a dozen B2B sectors. As a result, to keep their prospective leads interested and connected, many B2B marketers are publishing more educational content during the downtime. Common themes include how best to leverage video for outbound sales, move service teams to work from home at scale, and content on how to deliver value in a time of uncertainty. Other companies, such as Adobe and Paypal, are also offering their services to help businesses.

B2B tech software buyers are a notable exception; however, as they will most likely experience increased levels of spend as the majority of the nation continues to work remotely. An email survey conducted by TrustRadius found at least 40% of software buyers expect to spend more upfront to make sure employees are best equipped to work from home for extended periods of time, with 30% of decision-makers purchasing video conferencing software and 15% investing in security software.

As Zoom faces scrutiny for its lack of reliable security, the platform was most recently sued for allegedly disclosing a user’s personal information to Facebook illegally. As such, Google’s products are taking off. Google Cloud CEO Thomas Kurian said last week that the service is adding an impressive 2M users to its chat service per day.

The platform racked up two billion minutes of video calls during March and was growing 60% day over day. Reportedly, daily usage is 25 times higher than it was in January. Google Classroom is also experiencing a surge in growth as it has become the number one education app on Apple’s iOS and Google’s Android platforms. In light of this growth, video conferencing ad spend was 3X higher this past quarter compared to any other quarter in 2019.