Consumer Outlook 2021 - November 2020 Recovery, Relapse or Reset? - IAPI
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Consumer Outlook 2021
Recovery, Relapse or Reset?
November 2020
Some Perspective
• The COVID-19 public health emergency will end some
time in the next 12 months, maybe sooner.
• The economic and business fallout from the coronavirus
will be with us for the next 2-3 years, maybe longer.
• As we navigate the coming months and years we will
have to adjust to increased volatility during which
economic psychology and economic reality will battle
for consumers’ hearts & minds, purses and wallets.
• But remember Stockdale: by focusing on what you can
Work with what you have control of control you will find the levers and tools to help you
and you will have your hands full. navigate your way to future success.
Admiral James B Stockdale
2
Cover image: Photo by Victoria Kure-Wu on Unsplash
Recovery Photo by Gregory DALLEAU on Unsplash
The outlook for consumer spending is still uncertain…
Irish Consumer Spending Forecasts
% annual decline/growth
11.1%
7.0%
6.0%
5.0%
1.9%
CBI ESRI Budget EY EC
-7.9% -7.5% -8.1%
-9.2%
-10.7%
2020 2021
Source: most recent forecasts from different institutions/organisations Source: McKinsey - Nine scenarios for the COVID-19 economy 4
…and a key uncertainty relates to the vaccine…
Will you take the Do you have any concerns Should the Coronavirus
Coronavirus vaccine when it about taking the vaccine be mandatory?
becomes available? Coronavirus vaccine?
23% 14% 22% 31%
51%
15% 62% 36%
48%
Yes No Don't know Yes No Don't know Yes No Don't know
Source: Amárach poll for RTE Claire Byrne Live 23/11/20 5
…which is why most people don’t expect ‘normal’ until later next year…
Do you think your life will When do you think life will get back to normal in Ireland i.e.:
eventually go back to how it after the coronavirus pandemic has finished?
was before the pandemic
now there is a coronavirus 37%
vaccine?
27%
22%
23%
48%
28%
9%
3% 3%
Early in 2021 By the middle Later in 2021 2022 or later Won't get back Dont know
Yes No Don't know
of 2021 to normal
Source: Amárach poll for RTE Claire Byrne Live 23/11/20 6
… though consumers are getting used to the Covid-19 ‘lifestyle’…
How long do you think you can sustain your On balance do you think your life after the
current lifestyle given your income and pandemic is over will be:
spending circumstances?
% ‘more or less indefinitely if nothing much changes’
55% 57% 35%36% 35%
33%
51% 31% 30% 30%
48%
44% 27%
24% 24%
19% 19%
30%
15% 14%15%
13%
Better Same Worse Don't Know
April May June July August November
June July August November 7
Source: Amárach omnibus April-November 2020
…but wrong to take recovery for granted
Digital Disruption Third Wave Post-Traumatic
Shopping Disruption
8
Relapse Photo by Bruno Kelzer on Unsplash
There is hugh volatility in expectations about ending the pandemic…
Pandemic Stage
85%
Do you feel that the worst of the Coronavirus crisis in Ireland is:
56%
46% 46%
45%
43%
36% 40%
37% 36%
35%
33% 33% 33%
29%
29% 28%
26% 26%
23% 24% 24%
22% 22%
20%
18% 17% 19% 18%
16%
11% 11%
10% 9% 9%
0%
March April May June July August September October 02/11 09/11 16/11 23/11
Behind us Happening now Ahead of us
10
Source: Amárach tracker for Department of Health…while most want to prioritise the pandemic over the economy…
Preferred Government Priority
57% 56% 54%
47% 48%
32%
29%
26% 24% 26%
Ireland UK USA Germany Sweden
prioritise pandemic prioritise economy
Which of the following statements are you more likely to agree with:
The priority for the Government should be to limit the spread of the coronavirus and the number of deaths, even if that means a major recession or depression, leading to businesses failing and many people losing their jobs
The priority for the Government should be to avert a major recession or depression, protecting many jobs and businesses, even if it means the coronavirus infects more people and causes more deaths
Don’t know
Source: Amárach (November 2020) and KEKST CNC (September 2020) 11...the second lockdown has shook consumer confidence…
Whether or not you actually use them, which of these types of places or
services would you be willing to go to within the NEXT WEEK?
68%
65%
60% 62%
59%
56%
49% 49%
44% 46% 45%
43%
38% 40% 38%
37%
34% 33%
29% 27%
Restaurants Clothes shops Hair dressers or barbers Hospitals Churches
June July August November
Source: Amárach omnibus 2020 12… which does not bode well for a quick recover when things open again…
Whether or not you actually use them, which of these types of places or
services would you be willing to go to within the NEXT WEEK?
31% 30% 30%
28% 29%
26% 27%
25%
22% 21% 21% 21% 22% 22%
20% 20%
18% 18% 18% 18%
15% 15%16% 16% 15%
12% 13%
Pubs Offices Public transport Cinemas Taxis Airports Gyms
June July August November
Source: Amárach omnibus 2020 13…people are still very worried about going to the shops…
Which of the following do you usually feel when you are inside a shop nowadays? November 2020
Worried: 37% Hassled: 27% Annoyed: 23% Welcome: 20%
(42%/46%/39% (31%/28%/25% (26%/22%/21% (18%/17%/20%
August/July/June) August/July/June) August/July/June) August/July/June)
Relaxed: 18% Safe: 15% Happy: 11% Sad: 13%
(16%/14%/16% (14%/13%/12% (11%/7%/8% (11%/10%/8%
August/July/June) August/July/June) August/July/June) August/July/June)
Source: Amárach omnibus June, July, August & November 2020 14…while online shopping has become completed normalised…
A) Before B) Only Since C) First Time Share Never
Sector Pandemic Pandemic (A/B) Online
Alcohol 6% 12% 67% 82%
Groceries 19% 23% 55% 58%
Healthcare products 36% 33% 48% 31%
Fitness and wellness 25% 22% 47% 53%
Vitamins/supplements 25% 21% 46% 54%
Household supplies 31% 26% 46% 43%
Snacks 12% 10% 45% 78%
Personal-care products 42% 30% 42% 28%
Furnishings and appliances 47% 24% 34% 29%
Skin care and makeup 39% 18% 32% 43%
Footwear 60% 24% 29% 16%
Jewellery 28% 11% 28% 61%
Non-food child products 29% 11% 28% 60%
Books/magazines/newspapers 44% 16% 27% 40%
Accessories 48% 15% 24% 37%
Food takeout & delivery 62% 18% 23% 20%
Consumer electronics 59% 15% 20% 26%
Entertainment at home 57% 14% 20% 29%
Clothing 81% 17% 17% 2%
Source: Virgin Media Shopping Survey, August 2020 15
Q. Please indicate whether you shopped online in any of the following categories before the pandemic or for the first time since the start of the pandemic (i.e.: did not shop online in the category before)…and will be even more embedded in future…
Prefer to do most of
Sector Prefer to do all in store/
shopping centres
shopping in stores but
some online
Prefer to do less shopping
in stores and more online
Prefer to do all shopping
online
Food takeout & delivery 15% 28% 28% 29%
Entertainment at home 10% 34% 30% 26%
Books/magazines 17% 42% 24% 17%
Vitamins/supplements 21% 41% 24% 15%
Consumer electronics 17% 44% 25% 14%
Accessories 16% 50% 23% 10%
Non-food child products) 19% 46% 26% 9%
Fitness and wellness 18% 49% 25% 8%
Jewellery 25% 51% 16% 8%
Skin care and makeup 20% 50% 22% 8%
Footwear 25% 45% 22% 8%
Groceries 38% 38% 18% 6%
Clothing 23% 48% 23% 6%
Household supplies 32% 47% 16% 5%
Alcohol 33% 38% 24% 5%
Snacks 33% 41% 22% 5%
Personal-care products 28% 48% 20% 4%
Healthcare products 24% 53% 20% 3%
Furnishings & appliances 32% 52% 13% 3%
Source: Virgin Media Shopping Survey, August 2020 16
Q. Ideally how would you prefer to shop in each of the following categories in future when the pandemic is over?…while marketers are already planning to accelerate the digital shift
17
Source: WARC The Marketer’s Toolkit 2021Reset Photo by Jose Antonio Gallego Vázquez on Unsplash
The shift in societal values appears to be permanent…
Thinking about Ireland after the current crisis is over, to what extent do you agree or disagree with each of the following statements about
how we will be afterwards - % Agree
88% 85% 83%
75% 78% 75%
71% 73% 70% 68% 70%
60%
54% 52%
We will value healthcare We will value family We will value friends We will value people We will value the elderly We will expect the We will be more trusting
workers more than before more than before more than before working in retail, more than before government to do more in of experts
distribution and public future
transport more
April November
19
Source: Amárach omnibus April & November 2020…with implications for politics, business and the economy…
Thinking about Ireland after the current crisis is over, to what extent do you agree or disagree with each of the following statements about
how we will be afterwards - % Agree
65%
54% 53%
50% 49%
46%
43%
37%
34%
31% 31% 30% 29%
23%
We will work from home We will be less We will favour more We will want more We will be less willing to We will be more spiritual We will travel abroad less
more often even if we materialistic than before restrictions on people flexibility about how we borrow than before than before
don’t have to coming to Ireland educate our children
April November
20
Source: Amárach omnibus April & November 2020…our shopping habits have become just that - habitual…
% agree with each statement about life after the COVID-19 pandemic is over: November 2020
91% 79% 90% 67%
agree they will will continue will buy more will continue
buy more from to pay more Irish products to be cautious
local shops if by card than if they can about going
they can by cash (77%/82% to shops
(81%/87% (81%/82% Aug/June) (75%/79%
Aug/June) Aug/June) Aug/June)
21
Source: Amárach omnibus June, August & November 2020…and our priorities are now fairly clear…
% agree with each statement about life after the COVID-19 pandemic is over: November 2020
59% 54% 44% 41%
will continue will have will save will stop
to shop online more holidays more because worrying about
just like they’ve in Ireland of uncertainty the virus when
done during rather than about their jobs they are shopping
the pandemic travel abroad (43%/48% (35%/30%
(69%/59% 59%/66% Aug/June) Aug/June)
Aug/June) Aug/June)
22
Source: Amárach omnibus June, August & November 2020…we still intend to ‘stay safe’ even after the pandemic is over…
Which of the following will you continue after Coronavirus?
76% 75% 75%
75% 75% 74%
74% 73%
71%
67%
63% 63% 63%
63% 61%
60% 61%
59%
54%
50% 50% 50% 50% 51%
49%
47% 47%
43%
40% 41% 40%
38% 38% 38% 37%
33% 33%
32%
Social distancing when in a queue
Sitting further apart from others when outside house or on public transport
23%
Staying at home rather than going out
Wearing a face covering in public (added 27/07)
April May June July August September October 02/11 09/11 16/11 23/11
23
Source: Amárach tracker for Department of Health…all of which means that the Future is Local
94% 93% 89% 75%
agree people will agree we will all agree they will Wouldn’t want to
have to do more need to work continue to stay in lose the sense of
to support local together in our touch and help community that
businesses and community to out with has developed
employers when help with the neighbours and during the
the lockdown is recovery in the their local lockdown after it
finally over local economy community after is over
the lockdown
24Take Control Photo by Gregory DALLEAU on Unsplash
Winners & Losers: Alternative Futures
Winners Losers
Foreign holidays Domestic holidays
Recovery Clothing/fashion Takeaways
Restaurants Supermarkets
Amazon Banks
Relapse Online learning Motor trade
DTC Offices
Suburbs Third Level
Reset Petcare Creches
Online health Taxpayers
26The 4 Ps: Scenarios
Product Price Place Promotion
Increase prices
Ensure stock levels Retain digital Buy Irish
Recovery & supply chains early as recovery
channels Mass media
sets in
Cull range Increase prices for
Back to basics
Relapse ruthlessly for products in Accelerate DTC
Social media
unprofitable lines growing demand
Go premium to Launch new
Community and Co-creation
Reset create new sources products at high
neighbourhood Local media
of status price points
27Key questions you need to ask (and answer) now
Q. How (and when) will you know your customers have ‘moved on’ from Covid-19 and
are ready, willing and able to buy?
Q. Can you increase your prices over the next 12 months, sooner rather than later?
Q. Have you a range of innovations in the pipeline that can benefit from different outcomes?
Q. Have you a plan to beat Amazon (or better still, to avoid a fight)?
Q. Do your brand communications connect with the deepest social values?
Q. Have you a ‘go local’ plan that is sustainable and doesn’t require massive investment?
Q. Have you identified your ‘sunk costs’ that you will never recover and made a plan to
write them off/offload them?
28@AmarachResearch info@amarach.com www.amarach.com
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