Over the years, periods of economic hardship have drastically changed consumer spending habits. The Great Depression led to the rise of larger stores as consumers eschewed repeated visits to the butcher, the baker, the candlestick maker and everyone in between. The recession of the early 1990s was followed by the rise of big-box stores as consumers became far more cost conscious. And this pandemic will also witness another huge shift.
One result of this economic meltdown: With unemployment soaring over 20 percent and 26 million jobs lost, it’s not clear how our purchasing decisions will change in the long term. But a recent survey from EY gives us a clue about how many of us will spend our money once we emerge from this pandemic and the economic wreckage accompanying it.
The big takeaway from EY’s research is that over 40 percent of consumers surveyed across five markets expect their shopping habits to change drastically. About a third said they would be willing to pay more for local brands. Roughly a quarter said they will pay more to patronize brands they can “trust,” while a similar percentage said they'll open their wallets wider for “ethical” brands.
EY’s conclusion is that this pandemic is transforming how we live in ways that are “unthinkable,” but then again, if you’ve dared to look at your Facebook feed to see how your distant relatives and high-school classmates have responded to this chaos (as well as your real friends, of course), this shift isn’t really surprising.
Your aunt showed exasperation at the fact her credit card was charged for products she ordered online that may not come for weeks, if at all. A cousin three time zones away was dismayed that meatpacking plants have become COVID-19 hotspots as workers claimed they were kept in the dark and had no information. And that fellow you barely remember from high-school algebra class is ranting about yet another national restaurant chain that somehow finagled millions of dollars in the first round of the Paycheck Protection Program debacle.
Flippant examples aside, this EY study suggests what we here at TriplePundit have been reminding our readers during this pandemic all along: Long after we have a vaccine and can get closer to some semblance of normalcy, we will remember the brands that stepped up, as well as the brands that stepped in it. And as for business leaders who wanted to rush back to reopening the economy while countless people suffered? Any brands associated with them will struggle to devise a strategy that doesn’t come across as some form of duck and cover.
I believe much of this shift will be driven by psychology more than any marketing messaging: For those of us taking social distancing seriously and have experienced the world only through our laptops and packages delivered to our doors, we will be quick to indulge in that feeling of community again. We’ll spend money at local restaurants and small shops out of gratitude as they went above and beyond the call of duty during this crisis. And we’ll shun the brands that, fair or not, bear any ties to what currently seems like a dystopian nightmare with no end in sight.
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Image credit: Logan Weaver/Unsplash
Leon Kaye has written for 3p since 2010 and become executive editor in 2018. His previous work includes writing for the Guardian as well as other online and print publications. In addition, he's worked in sales executive roles within technology and financial research companies, as well as for a public relations firm, for which he consulted with one of the globe’s leading sustainability initiatives. Currently living in Central California, he’s traveled to 70-plus countries and has lived and worked in South Korea, the United Arab Emirates and Uruguay.
Leon’s an alum of Fresno State, the University of Maryland, Baltimore County and the University of Southern California's Marshall Business School. He enjoys traveling abroad as well as exploring California’s Central Coast and the Sierra Nevadas.
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