WI and IA Shopping Behaviors

Part
01
of four
Part
01

Consumer Attitudes and Behaviors: US

The Coronavirus pandemic has profoundly affected American consumers, with 89-91% indicating that the virus has impacted their shopping behavior. During the summer of 2020, in response to the COVID-19 pandemic, US consumers attitudes and shopping behaviors are expected to change in the following ways: changes in food spending, increased e-commerce, increase in sales for "new essentials", and new consumer expectations for shopping in-stores.

Food Spending Shifts

  • In response to the Coronavirus and the supply-chain stresses that it has caused, many consumers are turning to local producers for their food needs.
  • This trend is expected to continue throughout the summer, as consumers postpone travel outside their local areas. Instead, consumers are expected to visit local farmers markets and farm stands instead as part of their more local travel and summer activities.
  • There is also expected to be an increase in consumer interest in U-pick harvesting options, as they feel they are safer and more cost effective.
  • Lastly, consumers are eating out less during the Coronavirus outbreak due to forced restaurant closures in most areas. While it is still unclear when restaurants will reopen, experts do believe that consumers will not return to eating out with the same frequency as prior to the pandemic right away. As such, it is reasonable to believe that consumers will eat out less during the summer of 2020. A consumer IPSOS poll found that 18% of consumers will eat out less than they did prior to COVID-19 even after the lockdown ends, at least for a few months. Another 38% indicated that they will eat out at the same level, but only once they are sure it is safe, which may be well after when the lockdown ends.
  • One survey by Resonate found that 25% of Americans do not anticipate dining in a restaurant until 2021, while fewer than 33% expect to dine at a restaurant during or prior to the summer of 2020.

Increased Ecommerce

  • Ecommerce has increased during the Coronavirus outbreak, with 43% of ecommerce merchants reporting increasing sales during the COVID-19 outbreak. This is because "52% of consumers are avoiding crowds and 32% are leaving their house less often because of coronavirus." Additionally, order value for ecommerce merchants has increased.
  • Experts predict that this trend towards online shopping will continue indefinitely. However, in the short terms, while many consumers are still out of work due to the virus, some smaller online retailers selling discretionary items may see a decrease in sales.
  • Some experts go as far as to predict that the Coronavirus-accelerated consumer shift towards ecommerce will lead to the closure of many brick-and-mortar stores and especially malls and shopping centers. While this trend was already occurring pre-Covid-19, the Coronavirus outbreak is expected to accelerate it.
  • According to an IPSOS consumer survey, 37% of consumers indicate they "will wait until I’m sure it is safe" before they begin using malls and shopping centers post-Coronavirus, even if this means waiting until after the lockdown periods have passed. 18% indicate they will use shopping malls less, at least for a couple months, and 7% indicate they will never return to pre-Covid-19 levels of use.
  • According to another survey completed by First Insight, "only 33% of consumers feel safe shopping in a mall" and only 45% feel safe at a big box store like Walmart or Target, even with Coronavirus restrictions lifting in some states.
  • Based on the consumer surveys and expert predictions, it is likely that in the summer of 2020 ecommerce will continue to excel while in-store shopping is diminished.

New Essentials

  • There has been an overall decline in consumer spending during the Coronavirus outbreak.
  • Due to COVID-19, some retail segments — deemed the "new essentials" — are seeing increased sales during the outbreak. These categories include electronics, home improvement, housewares and garden, office supplies, toys and hobbies and sporting goods. Experts expect this trend of "new essentials" will continue.
  • Apparel has seen a drastic decline during the Coronavirus outbreak, with clothing sales dropping 50-60%. While this decline is not expected to remain as drastic once stores begin to reopen (i.e. summer 2020), experts still predict a decline in apparel sales, as many of the events that spur new clothing purchases like weddings or trips are canceled. However, some apparel segments are doing quite well, specifically lounge wear, basics, and slip-on shoes.
  • Many consumers have also been forced to try new brands during the COVID-19 outbreak. According to the Ipsos Coronavirus Consumer Tracker, 78% of consumers that tried a new brand or product during the Coronavirus outbreak will continue to use that brand/product after the virus ends.
  • As consumers do return to normal, experts predict that they will still focus on essential purchases until the economy recovers from the impact of the virus and the unemployed are able to return to work.

Consumer Expectations

  • As consumers return to stores, they have different expectations than pre-COVID-19. According to an IPSOS poll, 37% of consumers would want nonessential stores to require everyone to wear masks once they reopen, in order to feel safe. 36% desire social distancing in-stores and the same percentage desire limits on how many people can enter the store at one time.
  • Consumers also desire more frequent cleaning, including extra-deep cleaning, contactless transactions and/or mandatory glove wearing, and increased employee training.
  • Consumers are also watching closely how brands are responding to the Coronavirus outbreak, and for 68% of Americans, this will impact their shopping choices in the future. Consumers want brands to appear empathetic in response to the crisis.
  • RetailMeNot shopping and trends expert Sara Skirboll states: "As the situation starts to stabilize, shopping in-store will likely forever be changed with potentially different payment methods that don't involve touch screens or cash, less physical contact with people and hand-sanitizing stations in most physical locations. All of these changes might ultimately affect the in-store shopping experience and may push shoppers towards online retailers."

Research Strategy

No publications were found that focused specifically on COVID-19's impact on consumer sentiment during summer 2020. However, the research team was able to find consumer sentiment shifts due to COVID-19 that will likely continue in the future and/or once Covid-19 imposed lock downs have been lifted. These have been presented above, as summer 2020 is still in the future.
Part
02
of four
Part
02

Consumer Attitudes and Behaviors: Wisconsin

In Wisconsin, consumer confidence has decreased due to the pandemic, but as the state reopens, consumers are beginning to slowly return to stores. With that, consumer spending may increase but is not expected to reach pre-pandemic levels immediately as the state reopens. Consumer shopping behaviors have shifted, as more people shop online and look to support local businesses.

Consumer Confidence

  • In Wisconsin, consumer confidence decreased beginning in mid-March, and as of the first week of May, was still low, with only a very slight increase reported the first week of May.
  • Consumers in Wisconsin are still concerned about reopening too soon, but the percentage of Wisconsinites feeling this way is decreasing, giving credence to the hypothesis that consumer confidence in the state will increase steadily in the near future.
  • As bars and restaurants reopen in some parts of the state, customers are returning rapidly. However, in other areas, businesses feel it is too soon to reopen, indicating that consumer confidence in the state is returning to pre-pandemic levels, but not right away.
  • As the state reopens, consumers in Wisconsin are returning to stores. For retail stores, foot traffic had decreased 44% the week of April 12, but by the first week of May was only down 22%. This indicates that as the state reopens, consumers are returning to shopping slowly.
  • This follows the national trend for "open states", where "26% of consumers...have started to visit local businesses and spend money."

Decreasing Spending

  • Business owners in Wisconsin are reporting consumers spending less and being unable to afford regular payments for services due to job losses resulting from COVID-19. Consumers are also cutting back on spending due to uncertainty about the future.
  • For example, Kohls department stores, which is based in Wisconsin, reported a 43.5% decrease in sales in the first three months of 2020, due to consumers shopping less during the Coronavirus.
  • This follows the national trend, as 77% of Americans report spending less money during the COVID-19 outbreak.
  • During the Coronavirus outbreak, total sales in Wisconsin decreased 15%.
  • Nationally, experts state that consumers will likely continue to spend less even as states reopen.

Change in Shopping Behaviors

  • Consumers in Wisconsin are turning to ecommerce shopping during the Coronavirus outbreak. According to Hart Posen, Professor of Management and Human Resources at UW-Madison, believes that the virus will cause "substantial changes [in shopping habits] after it’s over."
  • Stores in Wisconsin have shifted to ecommerce offerings and seen "big spike[s] in the percentage of...orders that are done online."
  • While total store sales decreased in Wisconsin during the pandemic, ecommerce sales saw an increase of 20%.
  • This mirrors the national trend towards ecommerce, which is expected to continue as states reopen. One study found that "45% of consumers say they have permanently changed their shopping habits to spend more online" as a result of the Coronavirus outbreak.
  • Some consumers are shifting their spending towards local purchases, especially food purchases. Experts state: "some people may be looking to buy local during this pandemic to support their local economy."

Research Strategy

The research team attempted to find insights specific to Wisconsin on how the Coronavirus outbreak has affected those from Wisconsin and their shopping habits. While some information was found, it was not enough to provide a fully robust picture of the change in consumer attitudes during the pandemic in the state, and almost no information was available on how those in Wisconsin plan to shop during the summer of 2020. The research team also looked for information on consumer attitudes in the Midwest during the Coronavirus outbreak, as well as national data that provided state-by-state breakdowns (such as this index of consumer confidence). As such, the research team combined Wisconsin-specific insights with national trends to provide a full picture of what will most likely happen in Wisconsin in the summer of 2020 in regard to consumer spending and shopping habits.
Part
03
of four
Part
03

Consumer Attitudes and Behaviors: Iowa

In Iowa, consumer confidence is beginning to slowing increase and consumer spending is also slowly increasing as stores and restaurants re-open. However, business owners and experts predict that there will be long-standing shifts in consumer behavior brought on by the Coronavirus, for example, an increase in ecommerce.

Consumer Confidence

  • Consumer confidence in Iowa has been steadily declining since the beginning of March, reaching its lowest level the week of April 15th.
  • Beginning the week of May 1st, consumer confidence in Iowa began to slowly rebound, however, confidence levels still remain much lower than they were prior to the beginning of the Coronavirus outbreak in the US (beginning of March 2020).
  • It is reasonable to assume that with the reopening of the state already underway, consumers confidence will continue to increase.
  • As Iowa reopens, consumers are slowing returning, adding to the hypothesis that consumer confidence in the state will increase throughout the summer.
  • According to Peter Orazem, a professor of economics at Iowa State University, the return in consumer confidence will take a long time. He states: "parts of the economy that are face-to-face retail, I think, [are] going to be in for a long stretch before people are going to feel comfortable going to those places again."

Decreased Spending

  • Consumer spending decreased in Iowa during the Coronavirus outbreak, with many stores in Cedar Rapids and Iowa City reporting sales declines of 50-90% since the outbreak began.
  • Nationally, the apparel industry took the largest hit, and Iowa seems to reflect this shift, with stores like The Village in Washington, Iowa reporting a sales decline of 90% since the outbreak.
  • Some stores in Iowa report that during re-opening they have seen "near normal" spending and shopping habits, however, others report much lower sales.
  • Based on expert predictions for the US as a whole, it is likely that consumer spending will gradually increase. One expert states: "even though there will be pent-up savings, demand and desire for experiences, it may take a while before people feel comfortable acting on it."

Change in Shopping Behaviors

  • Many stores in Iowa have shifted to an ecommerce model only, and while consumers are making purchases, sales are not nearly as much as they were prior to the Covid-19 outbreak. Ecommerce sales are not replacing all in-store sales.
  • The owners of Moss, "a plant, gift and décor shop with locations in both Cedar Rapids and Iowa City," expect this trend towards ecommerce to continue for the foreseeable future, as consumers have "become used to the convenience of shopping from home and curbside delivery."
  • Stores have also shifted to contactless shopping experiences, in-store consumer limits, increased cleaning, and other changes to make customers feel safer, which may continue as the state reopens, which is likely to last into the summer of 2020.
  • Some stores in Iowa report seeing a shift towards local spending by consumers, such as Moss.
  • Iowans are spending more at liquor stores, as more people are staying at home to drink instead of going to bars and restaurants.

Research Strategy

The research team attempted to find insights specific to Iowa on how the Coronavirus outbreak has affected Iowans and their shopping habits. While some information was found, it was not enough to provide a fully robust picture of the change in consumer attitudes during the pandemic in the state, and almost no information was available on how Iowans plan to shop during the summer of 2020. The research team also looked for information on consumer attitudes in the Midwest during the Coronavirus outbreak, as well as national data that provided state-by-state breakdowns (such as this index of consumer confidence). As such, the research team combined Iowa-specific insights with national trends to provide a full picture of what will most likely happen in Iowa in the summer of 2020 in regard to consumer spending and shopping habits.
Part
04
of four
Part
04

5G: Consumer Perceptions and Understanding

In the US, a majority of consumers are aware of 5G, however, they may not fully understand what it is or the benefits of it. Consumers are, however, planning to purchase 5G once it becomes widely available.

Awareness

  • Nearly two-thirds of consumers are aware of 5G.
  • Males are slightly more likely to be aware of 5G than females. Additionally, younger consumers see 5G as vastly more appealing than older consumers.
  • 89% of American consumers were aware of 5G smartphones at the end of 2019, up from 73% of consumers at the beginning of that year.

Understanding

  • Consumers are still, however, confused with 5G, as a User Experience Strategies (UXS) group survey found that nearly one fifth of US consumers thought they had 5G when they did not.
  • In the US, only "32.8% of consumers said they understand the benefits of 5G very clearly."
  • Between 5-12% of consumers in the US and the UK are concerned that they will not be able to understand the benefits of 5G.

Plans to Purchase

  • According to Deloitte, "sixty-two percent of consumers say they will likely replace their home internet with 5G Wi-Fi service, if it delivers speeds equivalent to those of fiber" and "sixty-seven percent of consumers said that when 5G is available, they would be more likely to buy a 5G-compatible smartphone."
  • In the US, consumers are willing to pay 20% more for 5G data plans than 4G.
  • One fifth of US consumers do not see a need for 5G or wish to wait until the benefits of 5G are proven before they purchase a 5G device.
  • By the end of 2019, 65% of US consumers were interested in purchasing a 5G smartphone.

Expectations

  • Consumers are most interested in faster data speeds for faster downloads, increased reliability, better priced data plans, better coverage both inside and outdoors, and decreased buffering times that 5G has to offer.
  • Consumers want new features with their 5G plans, including the ability to stream 5G video that can replace cable TV, 5G hot spots in crowded places, new AR/VR experiences (especially for sports), and eventually 5G uses for automobiles like self-driving cars.
  • Younger consumers (Gen Z) plan to do more mobile gaming with 5G.
  • For smart-home users, many are looking to 5G to increase the connectivity within their home.

Trepidations/Concerns

  • Consumers are concerned about the price of 5G smartphones, as well as being unclear about what the new 5G technology will do for them directly.
  • Of those who are aware of 5G, about 25% are concerned about the health implications of 5G technology like potential radiation and phone-addiction.
  • Consumers are also concerned about potential security risks of 5G, the development of AI, and environmental consequences.
Sources
Sources

From Part 01