Disruption in consumer spending

The Age Of Disruption – Covid-19 Consumer Spending 

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March 12, 2020 by Christian Thomson

At times running a business can feel like sailing a ship through uncharted oceans….at night….with just enough fuel….and then there are the tough times. 

Like potentially the coming months, no matter what business you’re in there will probably be a direct or indirect impact from the Covid-19 virus. 

However, with disruption comes opportunity, and the savvy sailor (business owner) will understand that the coming months could create an incredible moment to gain more market share as consumers adapt their buying habits and competitors run scared and scale back their marketing efforts.

The new coronavirus (Covid-19) is spreading rapidly. At the time of publishing more than 114,500 people are known to be infected and over 4,000 deaths have been recorded. But that’s nothing compared with the flu, also called influenza. In the U.S. alone, the flu has caused an estimated 34 million illnesses, 350,000 hospitalizations and 20,000 deaths this season, according to the Centers for Disease Control and Prevention (CDC). 

Yet we are constantly being bombarded by the media about the risks, and negative effects of Covid-19, which in turn is increasing the hysteria and disrupting the way consumers spend.

As with any negative action, there is a positive reaction. With more “social distancing” happening, customers are turning online to buy everything from groceries to home supplies, clothing, health products and much more. 

Ecommerce

Pradeep Elankumaran, co-founder and CEO of online grocer Farmstead, told Retail Dive in an email that delivery volume rose more than 30% this week over normal levels, “most likely due to coronavirus concerns” as more people work from home and avoid crowds.

Home Contractor Business

The second opportunity is for businesses that focus on key areas around home renovation, home maintenance, gardening, leisure – whereby consumers are avoiding international travel in favor of spending more time at home. 

Health and Wellness

The third is the health and wellness sector; it’s common knowledge that the healthier you are the less likely you are to suffer from the Covid-19 virus. Online fitness classes, health products, sports equipment and much more all-seeing a bigger demand in recent weeks.   

Staycations

Many people have canceled flights and overseas travel, and are looking to vacation closer to home. With spring just around the corner, smart accommodation providers should be focusing on their national and local clientele. This also applies to local activity providers, restaurants and bars.

In conclusion, people still need to live (rent, mortgage, food, clothing, transport, education) and will simply adjust their spending (home renovations v’s oversea travel). As with many of the other virus outbreaks local, national and international economies bounce back. In fact, China which has seen a decline in virus cases in recent days is having an economic bounce-back (Source: CNBC). The companies that double down on digital marketing, customer service will come out stronger – companies that get scared and retreat will fail. 

Which side of history would you like your company to be on?