By John Terhune
BU News Service
Consumer spending will surge when the world finally emerges from the threat of Covid-19, marketing researchers predicted at a virtual talk at CES on Tuesday, but they said that the pandemic’s widespread impact on public attitudes and shopping habits will prove lasting.
In a session titled “Eat, Drink, Pay, Play: Will We Ever be the Same?,” John Gerzema, CEO of the Harris Poll, and Cheryl Guerin, EVP North America Marketing & Communications at Mastercard Worldwide, shared data from a study on American consumers with attendees of this year’s virtual CES, the consumer electronics show normally held in Las Vegas.
“The biggest enemy of consumption this year was saving,” said Gerzema, who noted that 51% of study participants reported they had increased their savings during the pandemic. But the savings dam could soon break, as pent-up consumers are looking forward to spending freely in 2021, he said.
Guerin agreed, calling the phenomenon “revenge spending.” After isolating through much of 2020 to avoid the virus, Americans are itching to reconnect with the outside world by attending live sports, concerts, and events, as well as traveling, she said. Many are interested in splurging on a luxury purchase after a largely miserable year.
“Over half (of consumers) are looking to buy something just to treat themselves,” said Guerin, who reported that Chinese buyers demonstrated similar behavior after long periods of lockdown.
But even when spending rebounds, consumer behavior won’t return to pre-pandemic norms, said Guerin. Instead, many will continue to seek out the “non-contact lifestyle” they have adopted to protect themselves from the virus, she said, referring to online shopping and touchless payment options.
“Consumers are willing to switch to brands that are offering these safer experiences,” Guerin said.
Necessity forced the last online shopping holdouts to rely on the internet during the pandemic, according to Guerin, who said 43% of people are taking fewer trips to the store. Public safety concerns sped the trend of consumers integrating their lives with the internet, said Guerin, who noted that Americans bought groceries, used fitness apps, and streamed entertainment online in 2020.
Those changes are likely here to stay; while many people report that they miss buying products in person, 74% of consumers say they plan to continue the new shopping behavior they’ve adopted during the pandemic, said Guerin.
The continued adoption of online retail and contactless payments could have an impact on buyers’ wallets – literally – as consumers rely less on physical currency.
“Cash is going to be the biggest loser here,” said Guerin. “People think cash is dirty.”