RALEIGH – Consumers are rapidly adjusting buying plans while also embracing online shopping as the impact of the coronavirus spreads rapidly across the economy.
Many people are putting off plans to buy a new house or car as worries about income increase. That’s bad news for businesses since the Federal Reserve notes that consumer spending makes up 68 percent of the nation’s gross domestic product.
And as more retail outlets close or curtail hours, consumers are still going to be shopping – but online. E-commerce has already been growing with its marketshare of retail sales projected to reach more than 12 percent this year, up from 10 percent in 2018 and nearly double the share just six years ago. (Amazon on Tuesday announced plans to hire another 100,000 people to meet growing demand.)
So says a new survey from SFW, an ad and marketing agency and research firm with offices in Raleigh and Greensboro. Survey findings of some 1,600 consumers as of March 13 is vastly different from March 6, SFW said in publishing the new findings on Tuesday.
- Thirty-seven percent of those surveyed say they have been impacted by the virus – more than double.
- Worries about household income have soared to 43 percent from 26 percent.
- Sixty percent now expect a “major outbreak” compared to 50 percent in the earlier poll.
- And 71 percent are taking steps to better protect themselves, up from 64 percent.
However, more people say the businesses they work for is dealing with the crisis. Some 37 percent say their employers have a plan, a jump from the earlier 25 percent response.
Some of the changes in consumer sentiment are quite different:
- Only 41 percent of people planning to buy a new home this year plan to proceed, down from 67 percent.
- Millennials’ home buying plans fell more than 50 percent – down to 35 percent from 73 percent.
- Among those planning to buy a new car, just 36 percent are moving ahead; that’s down 13 percentage points.
- The percentage of people planning to make home furnishings has dropped to 35 percent from 51 percent
Online shopping is becoming a more popular option as a growing number of people are growing more concerned about getting essentials.
The percentage of people willing to use e-commerce grew to 58 percent, up 20 percent.
At the same time, the percentage of people worried about being able to buy necessities surged to 58 percent from 41 percent.
“In just one week, the huge swings – both down and up – in the stock market, the implementation of international travel bans, the postponement or cancellation of major sporting events and leagues, and the declaration of a national state of emergency all came together to significantly change consumers’ attitudes toward the disease and the economy,” said Ged King, chief executive officer for SFW.
“We’re seeing positive changes in the acceptance of social distancing. We are also seeing an increase in people that might delay a major purchase, but still expect to complete them in the next 12 months. The bright spot is e-commerce. Barring distribution challenges, it is an opportunity for brands to help consumers.”