How the Pandemic is Affecting Personal Finances
Abby is PMG’s senior managing editor, where she leads the company’s editorial program and manages the PMG Blog and Insights Hub. As a writer, editor, and marketing communications strategist with nearly a decade of experience, Abby's work in showcasing PMG’s unique expertise through POVs, research reports, and thought leadership regularly informs business strategy and media investments for some of the most iconic brands in the world. Named among the AAF Dallas 32 Under 32, her expertise in advertising, media strategy, and consumer trends has been featured in Ad Age, Business Insider, and Digiday.
Happy Thursday. Two more days until the weekend. You can do this.
In today’s briefing, we’re reviewing consumer insights across verticals and how the pandemic, economic recovery, as well as the Black Lives Matter movement, have shaped consumer sentiment these past few weeks.
Dining & QSR
Entertainment & Media
Hospitality & Travel
As concern of a second wave of infections grows in many first-to-open states, content mentioning COVID-19 increased by 3% this week, the first increase since the week of March 16th. The number of articles published about a second wave and the number of commenters on the subject has been rising steadily since the start of March, and last week saw the highest numbers for both metrics, with article numbers jumping higher than ever, according to Brandwatch.
In the most recent Axios-Ipsos Coronavirus Index, eight in ten Americans “worry about a second virus wave” with large majorities claiming they’d “resume social distancing, dial back shopping, and keep kids out of school.” Following new hospitalizations and growing case counts, this renewed sense of risk is reviving protective measures and reducing interest in ‘normal’ activities.
A topic of contention: Are we still in the first wave, or is this the second wave already? That’s the question of the week for health and government officials, and no one’s reached a consensus (yet).
As for what the effects of a second wave would look like, look no further than Beijing, China. From the Morning Brew, “As a cluster of new coronavirus cases emerges in Beijing, Chinese officials are trying to avoid déjà vu.” As a result,
70% of flights departing from Beijing’s two airports were canceled Wednesday.
Schools, entertainment venues, and some bars were shut down.
Retail stores and restaurants are once again requiring customers to wear masks.
And this isn’t for a large outbreak. The government discovered 31 new cases — a tiny cluster — on Tuesday that was linked to a major wholesale food market. More than 100 new cases have been identified over the past week.
This week’s US cases map from The COVID Tracking Project.
Source: Axios x The COVID Tracking Project
Black Lives Matter protest organizers across the nation are looking to commemorate Juneteenth this weekend, the holiday marking the official end of slavery, as calls for policy changes grow louder. Many brands are expected to pause campaigns in honor of the holiday and social movement. At least 340 companies have announced they will make Juneteenth a company-wide holiday moving forward.
From eMarketer, “new research from Snap and the Boston Consulting Group shows that Gen Z (defined as those ages 16 to 23) and Millenials (ages 24 to 40) have shifted their media consumption and spending habits more towards digital channels during the pandemic, which will stay at higher levels after the pandemic. The findings are based on averages across the US, Canada, UK, and France.”
A few highlights,
Online shopping: 32% of young consumers said they increased their online spending, compared to 23% for older generations.
Video streaming: 73% said they increased their time on video streaming, compared to 61% for older generations.
Social media: 64% said they increased their time on social media, compared to 40% for older generations.
Gaming: 61% have reportedly increased their time gaming, compared to 33% for older generations.
With the first day of summer just days away, people are busy planning for home improvements to upgrade their spaces amid anticipated prolonged periods at home. According to Pinterest, the platform is reporting a 76% increase in searches for “outdoor jacuzzi,” a 3.8x increase in “koi pond backyard,” and a 76% jump in “contemporary garden” searches compared to this time last year.
The desire to return to in-store shopping is growing as the dependency on online shopping throughout the lockdown likely contributed to an eagerness to shop in-store after reopenings. According to Global Web Index, over half of all internet users say they intend to return to shops immediately, having risen from just over 40% in March’s study.
In my own excursions, I can attest that home goods in-store shopping is booming. Just about every aisle of the local Target’s home goods section was completely cleared out. And don’t get me started on the dwindling selections at Cost Plus World Market or Anthropologie. Everything from linen shower curtains to orthopedic kitchen rugs was sold out.
As summer camps cancel and there are fewer vacation getaways planned, parents are looking for creative ways to spend more time outdoors with the family. In its weekly update, Pinterest revealed a 107% increase in searches for “outdoor movie nights,” an 85% jump in “backyard camping,” a 63% rise in searches for “hammocks,” as well as 8.5x increase in “outdoor cooking area” searches, all compared to this time last year.
Regardless of this summer shopping surge, according to eMarketer’s new forecasts on US retail sales, total retail sales will drop by 10.5% this year, with ecommerce remaining a bright spot as it’s expected to rise 18% this year with more Americans relying on the convenience of ecommerce for necessities. For historical context, this anticipated 10.5% drop is steeper than the 8.2% decline experienced in 2008 after the Great Recession.
Related: An update on the #PullUpForChange movement and its impact on the retail and beauty industries.
In other news, the secondhand market is working to prevent looted items from protests earlier this month from being resold on their ecommerce sites. To do this, HauteTrader’s founder launched a #BloodFashionChallenge asking competitors, including Poshmark, eBay, ThredUp, Rebag, and others over social media, to stand with her against the sale of stolen merchandise on these popular online marketplaces.
As beauty routines continue to evolve, there’s a renewed focus on wellness and minimalist skincare. According to Pinterest, searches for seasonal makeup and nail looks are also trending high, including a 22.5x increase in searches for “creative eye makeup” and a 6.2x increase in searches for “bright summer acrylic nails” compared to this time last year. In a surprising move this week, Kanye West filed trademarks for a new Yeezy beauty and wellness line.
Walmart, Walgreens, and CVS all announced they would no longer lock up beauty products marketed to Black consumers, a practice common for decades across many retailers. Johnson & Johnson announced a multi-shade Band-Aid product to be coming out next year, and Quaker Oats acknowledged the contentious origins of its 130-year old Aunt Jemima brand and will be retiring the brand image this year. Mars Food will reportedly evolve its Uncle Ben’s brand while Conagra does the same for Mrs. Butterworth’s. This morning, B&G Foods announced it would review its Cream of Wheat brand packaging as well. This week, PepsiCo said it would place more than $400M into initiatives over the next five years that elevate Black communities, as well as increase Black representation at the company.
And in case you missed it, Shopify has been busy joining forces with a variety of retailers and platforms to fuel its ecommerce offering to compete against Amazon. Now, Shopify has partnered with Walmart to bring 1,200 new third-party vendors to Walmart’s online marketplace, bolstering the platforms’ offerings in the fight for ecommerce dominance.
Based on the latest Brandwatch survey results, restaurants with outside seating are expecting to fare better than indoor-only competitors. While a reported 36% of people feel safe dining outside, only 26% of people feel comfortable enough to do so inside. Bars are in even worse shape, with just 22% of consumers saying they feel safe visiting a local watering hole.
Earlier this week, the Commerce Department announced that US retail sales rose 17.7% in May, recovering some of the ground lost during two months of brick-and-mortar store closures. Interestingly, all categories increased in May, including a ~44% rise in the sales of motor vehicles and an almost 30% jump in restaurant receipts. These figures suggest the economy is rebounding faster than anticipated, though it’s unclear if these figures will continue to climb with unemployment remaining at record highs and other economic figures signaling a prolonged downturn.
As of this morning, 1.5M workers filed for unemployment benefits last week, with 20.5M people receiving continued benefits. According to The Wall Street Journal, “Americans have skipped payments on more than 100M student loans, auto loans, and other forms of debt since the coronavirus hit the US, the latest sign of the toll the pandemic is taking on people’s finances.”
Free trading via apps like Robinhood, combined with a volatile stock market have sparked a “surge in small-investor activity with online brokers widely seeing record volumes. Robinhood added net three million funded accounts from January through April. Robinhood doesn’t charge commissions, but does earn money from trading through rebates from wholesale market-makers. That generated over $90M for Robinhood in the first quarter, according to recently filed disclosures.”
Also, from the WSJ, “three months into lockdowns, renters in San Francisco, the US’s most expensive housing market, are realizing they have more negotiating leverage and are getting reductions on new leases,” an early signal for how the lockdowns will affect the real estate market. As such, lenders are reportedly increasingly pulling back on home-equity lending, with Wells Fargo and JPMorgan saying that they will no longer accept new applications, citing uncertainty over the economy.
Kim Kardashian landed a podcast deal with Spotify, in an op-ed for USAToday, Mark Zuckerberg announced Facebook would help boost voter registration and turnout through a variety of new measures, and Republican Senators are preparing legislation that could require major online platforms like Facebook and Google to stop selling certain targeted ads. From the Facebook announcement, some US users can now opt-out of seeing issue, electoral, or political ads from candidates and political action committees on Facebook and Instagram. The feature is expected to roll out more broadly over the next few weeks.
In its most recent survey, the Knight Foundation found that eight in ten Americans “don’t trust social media platforms to moderate content and make the right decisions about what people can post on their sites.” Survey results largely differed along partisan lines, with most respondents indicating that social media companies aren’t doing enough to remove harmful content.
From Byer’s Market, “Jack Dorsey has rolled out a new Twitter feature that lets users record and tweet up to 140 seconds of audio, an experiment that could transform how public figures, journalists, and the general public use the social media service.”
From eMarketer, “Hulu screened the pilot episode of its new show Love, Victor live on Twitter Tuesday evening, a first for both companies. Hulu used Twitter’s new conversations setting, which allows brands to control which accounts are allowed to respond to a certain thread: As the show aired, an official thread on Twitter included the show’s cast members tweeting alongside the episode. If the collaboration ends up being successful, it could mean more cross-platform social watching experiments, which present advertisers with new marketing opportunities.”
The NBA also went back to work this week with players returning to their home markets, where they will be subject to constant COVID-19 testing, required wearables to ensure proper social distancing, and more. And baseball may be coming back after all with the League proposing a 60-game season at full prorated pay to the MLB Players Association. TBD on if everyone will agree to play ball.
With summer knocking on the door, US consumers’ appetite for travel is growing; however, concerns about infection and existing foreign travel restrictions will keep most US travelers closer to home. According to eMarketer, domestic travel — particularly car trips — will be the most popular form of leisure travel this year, reducing digital travel sales in 2020 with domestic trips costing less than international travel. Speaking of flying, airlines, including American, United, and Delta, may soon ban passengers who refuse to wear a mask after a few heated encounters with passengers who refuse to mask up aboard flights.
In a Brandwatch survey, respondents show what activities beyond the home they feel safest doing.
Likely as a result, mentions of “staycations” on social media have risen by 11% from March to May 2020 compared to the average mentions in that period in the three years prior, according to Brandwatch. As of now, there are over 45K mentions of staycations being a safer alternative to traditional vacations during this time. Google Trends shows that same interest as well with worldwide search interest for “staycations” at a five-year high.
Back in the office, Big Tech antitrust and social issue developments are taking center stage this week over the future of online speech and the Section 230 legal protections. Just in the past 48 hours, the Department of Justice proposed a rollback of legal protections in an effort to make tech companies more responsible in how they police their content. The CEOs of Amazon, Google, and others also expressed their willingness to testify before Congress about any alleged anti-competitive practices. This news came shortly after the European Union announced it would be opening up antitrust investigations into the Apple App Store and Apple Pay practices.
The latest concerning tech: “The NAACP and the Anti-Defamation League are pushing advertisers to stop spending on Facebook for the month of July due to their concerns that the social media giant isn’t doing enough to prevent racism and violence on its platform,” according to The Information. Meanwhile, Google pledged over $175M to Black businesses, saying it would diversify leadership to include more Black representation.
Earlier this week, many thought the US was under cyberattack as several popular sites went down. It turns out that the outage was exclusive to T-Mobile customers as the company was reconfiguring network settings nationwide. Also from _The Inf_ormation, “subscription-based enterprise software companies are proving as susceptible to the pandemic downturn as ad-based tech firms like Google and Twitter.”
Some notable highlights:
Oracle this week reported sales in the May quarter fell slightly partly because customers in retail, hospitality, transportation are putting off planned purchases.
Slack reported earlier this month that it had allowed customers with COVID-related issues to defer payments.
Salesforce also had reported that its new business was hurt by customers delaying or reducing what they are buying.
Adobe said last week that some business bookings among its enterprise customers were delayed.
In the B2B space, tech vendor Demandbase is acquiring ABM platform Engagio, which could allow B2B marketers to more easily execute an account-based approach to customer journeys. With offices planning for reopening in many states, tech leaders are reportedly expecting IT budget freezes to subside over the next several weeks as new IT priorities in mobile security, internal communications, and collaboration tools take priority.
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That’s everything for now. We hope you have a restful weekend.