It’s not an understatement to say that the COVID-19 pandemic dramatically altered the way that we all lived our lives over the last year from how we watch TV to consumer spending habits. Some of those spending behaviors will most assuredly revert to the pre-pandemic norms as the country continues to open up, but at least 4 pandemic-inspired consumer spending shifts have become ingrained habits that are likely to stick around.
The folks at NielsenIQ recently conducted a study of millions of both in-person and online shopping occasions to identify which categories have demonstrated consistent and high-than-average growth in the periods post-pandemic when compared to pre-pandemic shopping periods. The data clearly shows sustained growth in 4 areas: cleaning and hygiene, experimental eating, new lifestyle adaptations, and an increased demand for convenience in shopping.
1. An Obsession With Cleanliness
During the heyday of the COVID-19 pandemic, disinfecting germs became a top priority for most people, leading to record levels of sales for cleaning and hygiene supplies including multipurpose cleaners, disinfectants, gloves, masks, and hand sanitizers. The aftermath of the pandemic has left us with a high number of self-described germaphobes indicating that the “cleanliness is paramount” mindset will remain and thus the increased sales for sanitizing products will continue into the future.
Another element factoring into the growth in demand for cleaning products was the homebound lifestyles brought on by the pandemic. More people spending the majority of their time at home, in addition to cooking at home, led to increased demand for kitchen and bath cleaners, floor care, and of course, paper products. As people return to the workplace, vacations, and more activities outside of the home, some of the heightened demand for these types of products is likely to wane.
2. Getting Creative in the Kitchen
One of the dramatic lifestyle shifts brought about by the pandemic was massive interest in home cooking. Shoppers took advantage of the opportunity to experiment with new recipes, foods, flavors, and ingredients. Among the items that enjoyed consistent in-store growth over the pandemic were seafood, plant-based meat alternatives, fresh herbs, and marinades, and industry experts expect to see these trends continue.
According to FMI’s most recent 2021 Power of Seafood report, a “surging tide of seafood buyers” resulted in a 28.4% increase in sales, which exceeded the sales growth of produce, meat, and deli departments. Seafood in all forms – frozen, fresh, and canned – generated over $16.6 billion in sales for food retailers in 2020. The report also found that the main motivator among for the increased consumption was a desire for healthier foods. Retailers can help sustain shopper interest in seafood going forward by focusing on the nutritional benefits of seafood, cooking tips, and meal ideas in their branding and marketing.
The biggest story when discussing shifts in the food industry centers on plant-based meat alternatives, which moved from obscurity to an important segment with sales increasing 25% in the one-year period from May 2020 to May 2021. During a time when people were searching for sustainable foods while cutting back on meat consumption, plant-based protein alternatives fit the bill, and this shift is expected to be a lasting one.
3. New Adaptations To Established Routines
While online retailers and grocery stores enjoyed huge gains when eating-at-home became the norm during the past year, the restaurant industry suffered major blows, resulting in billions of dollars of lost revenue and over 110,000 restaurant closures, according to the National Restaurant Association. Some of the hardest hit during the pandemic were coffee shops and breakfast establishments which lost out on business from school and work commuters. As people adjusted to leisurely mornings at home and home-brewed coffee, sales of breakfast foods grew. It is unclear whether these easygoing habits will remain or if morning routines will revert to pre-pandemic days as the country continues to open back up.
Aside from more cooks in America’s kitchens, the pandemic also necessitated a shift in beauty habits. Shoppers adopted a DIY attitude when it came to grooming and beauty and, and they increased experimentation with products that enhance natural beauty rather than covering or altering it. And this trend may be here to stay as shoppers have indicated that a good number of them plan to continue cutting and coloring their own hair and wearing less makeup overall.
Even while in-store purchases of beauty supplies and services declined, online purchases saw strong growth, particularly in DIY categories such as nail grooming and hair removal, which saw triple-digit growth in online sales.
4. Higher Demands for Simplicity and Convenience
After a year of extreme disruption, shoppers are keen to find ways to simplify their lives and daily routines. In addition to changing how consumers shopped – moving to online retailers and delivery services – the pandemic also greatly affected what they put into their carts. To begin with, demand for frozen food of every kind skyrocketed.
“Frozen foods were a pandemic powerhouse, bringing in $65.1 billion in retail sales in 2020, a 21% increase compared to a year ago,“ said AFFI president and CEO Alison Boder, who also noted that nearly all types of frozen foods saw double-digit sales increases. Shoppers appreciate the convenience of frozen foods, as well as the freshness and quality of frozen products which have evolved over time. Finally, frozen foods result in less food waste, an issue of increasing importance for many consumers. Signs indicate that the increased demand for frozen foods will continue long past the pandemic.
How to Nurture Consumer Spending Shifts
As we’ve seen above, several pandemic-inspired consumer spending habits continue to exhibit strong staying power, even as America is opening up and returning to normal. As in-store shopping regains some of its market shares, retailers can better position themselves to win by adjusting their approaches to marketing and meeting shopper’s needs by understanding how shopper mindsets and habits have evolved over the course of the past year.