For weeks now, American consumers and businesses – everyone everywhere, really – have been desperate for the answers to three questions:
Answering the first two questions is the single-minded focus of some of the world’s most brilliant researchers, scientists, epidemiologists, doctors, healthcare experts, economists, regulators, governments and policymakers the world over.
Collectively, they are balancing the trade-offs, nearly in real time, between keeping the economy closed and keeping people safe from a highly contagious virus for which there is currently no treatment, nor any vaccine, nor enough large-scale testing to assess its level of spread.
Answering the third question will increasingly become the single-minded focus of the consumers, all of whom must be convinced that those brilliant minds have created a reopening plan that reduces their personal risk of getting sick, or worse.
The New Normal: Health Before Wealth
As the pandemic progresses, the share of consumers who cite the danger of dying as their primary concern continues to increase, as the share who worry about infecting others keeps falling.
Today, consumers report being nearly eight times more concerned about dying from COVID-19 than losing their jobs or their personal fortunes as a result of it.
That’s despite the fact that the risk of losing their jobs and the value of their investments as a result of the virus’ impact is far greater.
It’s not really surprising — after all, people get reemployed, but can’t come back from the dead.
This shift is also perhaps understandable, as more than 25 percent of the consumers we studied reported personally knowing someone who has tested positive — an increase of 16.8 percent from the 7.7 percent on March 17, meaning that the number of people in this group has more than tripled in the last month — and as the death toll in the U.S. continues to rise as more hotspots hit their peaks.
This shift offers important insights into the psyche of U.S. consumers who have changed their behavior quite significantly over the course of the pandemic — by choice, by mandate and by the economic reality of what COVID-19 has wrought. These documented shifts over the last six weeks have helped us more fully understand how consumers have changed their behaviors, and whether they will or won’t break with them once the #stayathome requirements are lifted.
The most recent PYMNTS study, fielded on April 11, provides the fourth benchmark across a national sample of more than 8,000 U.S. consumers about how they work, eat, shop, buy food and engage in leisure activities during the course of the pandemic.
The results of our most recent study show that consumers have new clarity about that timeline to normal – and the reality of life post-COVID.
Or at least they think they do.
Only half of them believe that life as normal will resume for them once the pandemic is over.
Craving Certainty
COVID-19 has created a series of vulnerabilities for consumers — all at the same time — unlike anything in our lifetimes.
It has put the consumer’s personal health at risk, given the highly contagious nature of the virus.
It has put the consumer’s personal finances at risk, given the extreme stock market volatility.
It has put the consumer’s paycheck at risk, given the shutdown of the economy and the business uncertainty that has followed.
According to our latest study, roughly a third of those who are still employed are worried about losing their jobs, across nearly all categories. More than half (51 percent) of all construction workers fear their jobs are at risk, as do 38 percent of financial services employees — that’s up 8.8 percent and 30.7 percent respectively, since March 17. Even healthcare and social services workers (26 percent) now have those concerns.
Those vulnerabilities have consumers seeking certainty, to help them feel their personal risks are mitigated and that resuming their daily activities won’t put them in harm’s way.
For the consumers we studied, that certainty isn’t necessarily provided by the actions the federal and state governments will take to reopen the economy – even though roughly one in five say having federal and state governments giving them the “all-clear” is an important part of restoring their willingness to return to normal.
The certainty also doesn’t come from flattening the curve (22 percent), having a treatment (25 percent), the CDC reporting that conditions are safe (27 percent) or the WHO rescinding COVID-19 as a global pandemic (25 percent). It’s interesting to note that both the CDC and the WHO have lost credibility with the consumers we have studied over the last 10 days.
There is only one thing, consistently, that consumers say will make them comfortable resuming their normal routines.
A vaccine.
Now, nearly half (49 percent) of all consumers we studied report that a vaccine will give them the confidence to resume normal activities — twice as many as we reported on March 17.
Not surprisingly, nearly as many — 45 percent — of consumers now expect the pandemic to last six months or longer, up from 31 percent on March 17.
A vaccine is a proxy for consumers feeling secure leaving their homes and resuming their daily activities. Maybe that will change as more information is revealed about the efficacy of therapeutics or antibody testing that assures them being around people won’t put them at risk of contagion.
So far, however, a vaccine has taken the lead, by a longshot, among what consumers need to feel at ease.
The New Timeline To Normal
That makes the next insight all the more believable.
In just the last 10 days, consumers have added more than a month (33 days) to their personal timelines for getting their daily activities back to pre-COVID levels of normal.
On March 27, the consumers we surveyed said it would take 145 days, up slightly from 138 days on March 17, to emerge from the COVID-19 crisis.
On April 11, that timeline is now, on average, 178 days — or six months. That’s on top of the nearly two months that have passed since the majority of the U.S. has been on lockdown.
Six percent of the consumers say normal will never resume for them — three times more than when we asked on March 17. Another 19 percent said normal will be one to three years away.
Most consumers, it seems, have now accepted the reality that COVID-19 won’t just cause a two- or four-week hunkering-down at home, but will change their behaviors in some way for almost all of 2020.
Like redefining what it means to be a digital native — and where digital activities will largely be done.
Home Is Where The Commerce Is
Over the last six weeks, the very devices that have democratized access to the digital world for consumers have also democratized the digitization of almost all of the daily activities in which those consumers engage. As the pandemic progresses, they are working, eating, grocery shopping and shopping for pleasure using increasingly digital means — and they are doing all of it from home.
The consumer’s new perspective on the journey to “normal” is mostly the result of the steps they have taken over the last six weeks to live their lives in a mostly digital world. Home has become the digital command center — and the shift from the offline to the digital world over the last six weeks has been nothing short of dramatic.
Among those consumers with jobs, working from home increased by a factor of six — from 5 percent to 32 percent.
Online shopping for groceries increased nearly four-fold — from 4 percent of the 87.4 percent of consumers who buy groceries as of March 6 to 15 percent on April 11. Of those who shopped online, 61.1 percent had groceries delivered or picked them up curbside.
Online shopping for non-grocery items tripled — from 12 percent of the 77.6 percent of consumers who once shopped in physical stores to 36 percent on April 11.
Even getting food from restaurants — either via an aggregator, QSR or one that has transitioned from table service to takeout — has tripled, from 5 percent on March 6 to 15 percent on April 11.
That’s the good news.
The bad news is that despite the shift to digital, consumers overall are doing everything much less than they did before the pandemic.
More than a third (37 percent) of those we studied are working less. Fifty-nine (59) percent of consumers are even shopping less for groceries. More than half (51 percent) are shopping less often for products other than groceries. Three-quarters of consumers are eating less at any type of restaurant, via any channel.
That’s why normal — and what normal looks like for the American consumer — is totally up for grabs.
The Half-Empty Normal Glass
Returning to normal has several dimensions for consumers.
Will their jobs and paychecks return to normal? Will the shops and restaurants they used to buy from and eat at still be there? Will the value of their investments return to normal? Will the health risk of the virus be what it was before COVID-19 became a crisis?
Those uncertainties, right now, are too great for most consumers to gauge.
That’s why only 48 percent of consumers expect to resume their normal activities once the pandemic ends, with another 4 percent saying they will do so once they have childcare for their kids. About a third (32 percent) say they will perform more activities at home and fewer activities away from home, with 16 percent saying they won’t resume normal activities outside of the home after the crisis ends.
This means 121 million American adults will not resume their activities in the same way they did before the COVID-19 outbreak. At least that’s how they feel now.
Interestingly, the bridge millennials — those connected consumers who drive discretionary spending — is the generation most likely to say they will not return to their usual activities after the pandemic ends, with 21 percent making that claim.
Restaurants have the toughest lift, since consumers can’t see — and thus may not trust — what’s happening in the kitchens where their food is prepared, and may be uncomfortable sitting too close to other diners. Thirty (30) percent of the consumers we studied said they will not go to restaurants like they once did.
Things won’t be normal, even if they — and we — wish it to be that way.
Consumers have discovered that the internet makes their daily routines more efficient and gives them more time to spend doing other things. Once they have made investments in setting up new digital accounts with the stores where they’re now shopping, those consumers will be more likely to stick with digital — particularly if they believe that, either through choice or mandate, they won’t be able to go to the places they once visited the same way they once did.
Or they may find that their favorites are no longer there for them to visit.
Businesses may find that working from home saves their employees time — and saves them rent for offices. The investments they have made in setting up a remote workforce and getting processes in place could very likely stick.
“Normal” for consumers is also a matter of having their jobs and paychecks back, and feeling comfortable spending on things other than necessities. That is made more difficult as consumers now seem closer to running out of cash — with 49 percent in this latest study reporting that they’re tapping into savings to pay their bills within less than a month, and more than 36 percent having savings of $1,000 or less.
How We Will Change
We’ve only been doing these surveys every 10 days for six weeks. It seems like a lifetime. But this last one should be a real eye-opener for local, state and federal governments that are managing the response to the crisis, and the businesses of all sizes that are trying to figure out how to best serve their consumers and their workforce in the coming years.
For governments, the message is clear: People’s paramount concern is being safe. Even if workplaces and restaurants are allowed to open, people may not show up until they feel safe. And right now, safety is based on most consumers’ personal timelines.
For businesses, the message is also clear: It may take a vaccine, and therefore quite a bit more time, before most people are willing to return to normal — and even then, about half say they won’t return to normal, even then. The ramp to 2021 sales could be a long, slow build.
The other message for everyone is that the big boost digital has gotten, and the hit physical has taken, will likely be permanent.
The shift to digital has surged across all of the categories we track — particularly as the reality has sunk in that it will take time for businesses to get back online and operating in the way they once did. What we find most interesting is how many of the consumers who have shifted to digital have said they won’t return to the physical channel on the other side of the pandemic.
Shopping for groceries and other products are the areas where that digital shift has the potential to make great gains.
More than half of the consumers (52 percent) who shifted to digital grocery shopping say they won’t go back to their old ways of shopping, as online delivery and curbside pickup are gaining ground. And 60 percent of the consumers who shifted to digital to shop for things other than grocery items say the same.
So, how will we change? Digitally, as the consumer’s digital muscle memory gets even stronger over the many months to come.
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