Consumer app spending is up 73%.
Consumer app spending is up 73%.

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Is Amazon a monopoly?

We asked our consumer panel…

They said yes. 59% of in-store shoppers and 52% of app shoppers think Amazon has a monopoly. And, it makes sense. See, times have changed. Back in the good ol’ days, pre-COVID, you mainly shopped in-store. So, it was NBD that Amazon was the king of eCommerce. You didn’t need to competitive shop on apps.

Oh, how times have changed.

Now, 61% of people shop on eCommerce more than 30% of the time.1 No need to be a math whiz to see an increase in these numbers. So, naturally, buyers want more options online. Like they enjoy when they shop in-person. Lucky for them, two players are quite happy to challenge Amazon: Walmart Plus & Target Shipt.

It’s a juicy opportunity.

At the start of 2020, there were more than 150 million paid Prime members worldwide, according to Jeff Bezos.2 That’s a number Walmart Plus & Target Shipt would both love to steal. And there’s plenty of market share to take from. The eCommerce giant currently accounts for roughly 38% of all online retail sales in the United States.3 Amazon is clearly on top of its game.

You might say, they’re Primed for competition 😉

How Walmart+ is waging war.

Walmart has a win in mind. They’re want to kick Amazon off their horse. And here’s how they plan to do it:

  1. Free delivery: Customers will receive as fast as same-day delivery on more than 160,000 items including tech, toys, household essentials, and groceries.2
  2. Scan & Go: This feature in the Walmart app will allow for a faster way to shop in-store. Using the Walmart app, customers can scan their items as they shop and pay using Walmart Pay for a quick and touch-free payment experience.2
  3. Fuel discounts: Walmart Plus members will be able to save up to 5 cents per gallon at nearly 2,000 Walmart, Murphy USA, and Murphy Express fuel stations. Sam’s Club fuel stations will also be added to the lineup.2
  4. Same-day deliveries: Although Walmart requires orders to be over $35, it won’t charge for same-day deliveries like Amazon does.4

That’s quite the list.

But, is it enough?

Let’s take a look at Target Shipt. 

But, Walmart’s not the only retailer in town. As any mom will tell you, Target does a great job at vying for hard-earned cash. And this pandemic has given them a great chance to leverage their recent Shipt acquisition to challenge both Amazon and Walmart.

  1. Same-day deliveries: Target Shipt offers same-day delivery of Target purchases, as quickly as within two hours of when you place an order.5
  2. Personal shopping: A personal shopper deployed by Shipt does your shopping. They text you if something you ordered is out of stock. When they’re done, your stuff gets delivered right to your front door—within normal business hours.5
  3. Low priced subscription: An annual subscription to Shipt is $99, or $8.25 a month, and includes unlimited orders of $35 or more from Target and participating stores in your area. 
  4. No membership required: Target Shipt doesn’t require a membership, if you want to, you pay $9.99 per delivery.

As you can see, Target Shipt is taking a different path than Prime and Plus are. 

Most notably, it doesn’t require you to subscribe to a membership, making the app easier to try out. Then they create value with a personal shopper. The red and white retailer is certainly doing their part to differentiate.

So, what does it all mean for you?

Well, if you sell in these categories, eCommerce retail wars have a direct impact on business.

There are now multiple chances to advertise and gain market share with the momentum that has been created by these retailers. If you’re a retailer yourself, it’s helpful to know what the competition is doing, so you can come prepared to the game.

And, if you’re in market research, you need to know how this impacts clients. No matter the industry, you’re well served to study the actions of these three giants. 

Here’s how you can do it.

Market research. Use it to find out exactly what consumers want— and then deliver.

And guess what? Research evolved too. In fact, you can now get eCommerce data on consumers that you could never access before. Here’s how it works. Let’s say you want to know what apps a consumer panel has on their smartphone. 

Simple. Ask the nation’s largest, highest-rated consumer panel. Surveys On The Go® can see other apps. You can look at shopping behavior, in-app purchases, and a whole lot more. So, once you know what you want to study, use a DIY platform, or call to get help with a QRE. 

But, maybe you need in-store data.

Cool. Surveys On The Go® can see where panelists have been—and where they’re going.  Here’s how it works. Let’s say you want to talk to people who’ve shopped at Walmart or Target in the last 24 hours. Reach them while they’re still shopping to get rich insights with a Point of Emotion® survey. 

Need help? Email us. We help the world’s biggest brands get better, faster, more accurate data.

References:

  1. https://mfour.com/blog/amazon-prime-vs-walmart-plus-who-will-win/ 
  2. https://www.tomsguide.com/news/walmart-plus-membership-free-delivery#:~:text=Walmart%20Plus%20is%20a%20new,year%20or%20%2412.95%20a%20month
  3. https://www.emarketer.com/content/top-10-us-ecommerce-companies-2020 
  4. https://www.techradar.com/news/walmart-plus-launch-date
  5. https://www.nytimes.com/wirecutter/blog/target-shipt-review/
Amazon Prime vs. Walmart Plus—who will win?

In retail, Walmart reigns supreme.

Across the channel, in eCommerce, Amazon rules with an iron fist. In fact, 60% of in-store shoppers view Amazon as a monopoly. Clearly, each side has a strong handle of their court.

And, they’ve never really gone toe to toe. 

Until now…

Walmart’s ready to joust.

Prime risks losing 49% to Walmart Plus, starting on Sept.15th.

49% is a lot…But, while Plus is a new app, Walmart’s not a new kid on the block.

In fact, Walmart’s sitting pretty.

With more than 50 years’ experience, and a 400B market cap,1 the retail giant dominates its competitors. And the pandemic only boosted their position. While others struggled to keep up with the demand for groceries and necessities, Walmart’s online sales grew 74% in Q2 of 2020.

Let’s take a look at how they’ll compete with Amazon Prime.

Meet Walmart Plus…

In true Walmart fashion, the Plus app is slightly less than Prime ($98/year vs. $119). 

Price isn’t everything. 

In fact, we asked our consumer panel what would make them switch. Want to know what they said? A full 35% liked the idea of being able to access items in-store. That’s something Prime just hasn’t figured out yet. They’re just not retail. Meanwhile, Walmart has 4,700 stores across the U.S. What’s the next biggest reason? Gas: 29% want a gas discount from Walmart Plus. 

So, should Prime really start to worry…?

Here’s what Amazon and Walmart shoppers say.

According to our new survey of validated Amazon Prime users and geo-validated in-store Walmart shoppers, 49% are likely to try the Walmart Plus app.

Why?

Well, 27% are interested in competitive shopping with Amazon, 18% are already Walmart app shoppers (on the current walmart app), and 17% want more product options…

These answers are directly in line with Walmart’s strengths.

  1. I like that I can also have access to in-store items (36%).
  2. I like the idea of getting discounts on gas (30%).
  3. I’ll save more money with Plus than Prime (19%).
  4. I like the idea of free shipping on certain items (10%).
  5. I see more value with Plus than with Prime (5%).

The retail giant already committed to unlimited free deliveries from any U.S. store, and as much as 5 cents off each gallon of gasoline at Walmart, Murphy USA and Murphy Express fuel stations.2

So, how much opportunity is there?

A million app converts = trillions in sales.

Consider this.

  • 51% of Amazon prime users spend $100-500 per month with Amazon.
  • 51% of in-store Walmart shoppers spend $100-500 per month with Walmart.

That means, half of all app converts are potentially worth $1.2-$5.8k per year.

If just 1 million users convert, that’s 1.2 to 5.8 trillion worth of annual gross sales.

If 10 million users convert, that’s 12 to 58 trillion worth of annual gross sales.

The opportunity is massive, and when we dig deeper we can see key areas for a critical attack.

The battle for a better customer experience.

Amazon wrote the book on customer experience. 

As early as 1999, Jeff Bezos could see the future of his company.3 Journalists weren’t allowed to pigeon hole Amazon as an internet company. And with their speedy delivery and easy returns, it’s easy to forget that Amazon doesn’t have a large brick & mortar presence.

But, while Amazon improves experience, Walmart is branching into brand-new territory.

Walmart Plus wants to be the low-price leader everywhere.

Remember our gas lovers?

29% said they’d consider switching apps just to get discounts on gas. This means Walmart will not only compete via app and in-store, they’ll also compete “on the go”.

Shoppers are people, and people need to go places. All the time. Which means they need to stop for gas, regularly (except for those on the Tesla train)

With Walmart Plus offering discounts at certain gas stations, it keeps them top of mind as a low-cost leader, even if it’s not Walmart products.

Will this will impact you?

Yes.

Especially if you sell on Amazon or in Walmart.

We asked consumers, “for EACH category below, please share WHERE you’re most likely to BUY the product? I plan to buy…”

See their grouped responses below:

So, now what?

Walmart reported $514 billion in revenue last year. 

That’s nearly double what Amazon brought in. And here’s the truth. eCommerce will continue to grow. In fact, 61% of people are shopping on eCommerce more than 30% of the time since COVID-19. It’s not going to change anytime soon. So, Plus is going to do well. It’s a given.

Think about what it means for your business.

Are you studying eCommerce trends—and ready to compete in your own sector? If not, this is the time to take stock of the market and get started. Our market has shifted. This is the time to tackle sales challenges head-on with real consumer opinions. Need help? Leverage the most sophisticated consumer targeting in market research. Meet our consumer panel.

Research was conducted comparing app & web visits to brick & mortar visits by MFour’s consumer panel. Examined September 4th through 7th using the Surveys On The Go® app.  

For a full copy of the Research click here to email MFour. Please note your request is for Walmart Plus research.

References:

  1. https://finance.yahoo.com/quote/WMT/
  2. “Walmart’s answer to Amazon Prime is cheaper and has gas discounts.” (Washington Post)
  3. https://www.cnbc.com/video/2019/02/08/jeff-bezos-1999-interview-on-amazon-before-dotcom-bubble-burst.html
Redefining customer experience: why 67% look for safety before shopping.

The customer experience was stripped bare.

When the virus spread, it took down safety and security with it. In fact, 72% of our consumer panel is still concerned. But, your brand is about to get them excited again.

Let’s get personal. 

Buyers are looking to their favorite brands to help them through a tough time. It’s in your hands. A full 62% believe that brands play a critical role in addressing the challenges of the crisis.1 They’ve opened the door—and are waiting for you to create a great customer experience for them.

Here’s why.

Even before the crisis, 59% of consumers said they felt that companies had lost touch with the human part of customer experience. And 75% say that they prefer to interact with a person, not a machine.2 Now their needs are amplified because they’re not getting the connections they crave. 

So, here are four ways you can impact customer experience—and sales:

  1. Safety
  2. Intimacy
  3. Prestige
  4. Fulfillment

#1: Safety

Maslow didn’t plan to be a marketer. 

But he was one. By creating a hierarchy of needs, Maslow also built a blueprint for customer experience. And right after accounting for physiological needs, that means creating safety. Which is timely, because right now, 67% of consumers have said they’re looking for safety before they choose a retailer.

They need to feel safe. And that’s not just with masks and sanitizer. It’s seeing what you’re doing as a brand.

Show them that you care about their wellbeing. They want order, predictability, and control. Especially now. Train your team to be aware of, and share, what your company is doing to help. The marketers who get this right—stand to win a massive amount of share. 

#2: Intimacy

Relationships motivate behavior.

Consumers want real people. Be proactive and ask what will make their lives better. Don’t stress them—or yourself—out by trying to guess what they want. Just ask. Send a survey while they’re in your location and get real-time feedback. Then, once you know what they want, make good on it. 

Follow through on what you say you’re going to do. This will help your buyers to feel intimately connected to your brand. It establishes trust. And trust is a trait that transcends hard times.

#3: Prestige

People love to be liked.

Reputation matters and they crave their peers’ respect. Many people have put themselves in the backseat during these times. Because, when you’re working from home—why not wear sweatpants, or pajamas for that matter? No one’s going to see you. But, now places are re-opening and they care again.

Help them to see how your brand meets their needs for respect and reputation. They’ll associate their positive self-perception with a high affinity for your brand. And you’ll create a loyal customer.

#4: Fulfillment

Maslow calls it self-actualization.

But, whatever name you’d like to use, it means the same thing: personal growth. The army does it well. Their tagline is “Be all that you can be.” A perfect embodiment of fulfillment. Just remember, before this need for growth can be met, your brand must have already helped consumers to reach the earlier steps.

That means your customer experience must first create safety, intimacy, and prestige. All of this comes before you can help the buyer to see how they can become a better person, as a result of your brand. 

So, here’s a little more help with that process.

Find out where you stand.

Consumer behavior has many motivating factors.

Your goal is to find out which ones work best for your brand—and your sales numbers. To do that, take stock of where you are today. 

Many companies are now overhauling their relationship surveys for new and relevant questions on customer relationships. You’re no doubt considering the same thing. That may mean adding new survey language, altering some of your questions, or collecting the data differently.

Here are two ideas for you:

1. Run an exit survey.

This is a simple way to see how consumers feel in-the-moment. 

It’s sent as a buyer, or a non-buyer, leaves your location. You can ask exactly how they feel as they leave. Which is good, because 50% of shoppers forget what they did within an hour.3

The data is also representative of your buyers. Why? Because you’re only pinging the people who are naturally buying your product, or a competitor’s brand, as they’re leaving. No concerns here about relevance. This consumer panel, and their actions, is tied directly to your target market.

2. Send an app or web survey.

Online purchases are up 50%.4

Survey to see what shoppers are doing online–and why. New technology allows you to see consumers’ app behavior and to track where they’ve been online. It’s called a digital event survey. And, you can use it to capture accurate insights on buying behavior.  

This is a big move for the industry. You can now see eCommerce footprints, as well as physical ones. Use that data to impact your omnichannel strategy and beat your competitors before they ever reach the game.

There’s no question that the customer experience has changed. Now, it’s up to us to adjust. It’s time to be agile and to adapt. And the sooner we get started, the further ahead we’ll find ourselves.

References:

  1. https://www.forbes.com/sites/blakemorgan/2020/04/27/customer-experience-mindset-in-a-post-covid-19-world-an-infograph/#6e7f0f4e3d0e
  2. https://www.strategy-business.com/blog/Redefining-customer-experience-Connecting-in-the-time-of-COVID-19?gko=245c0
  3. https://learningsolutionsmag.com/articles/1379/brain-science-the-forgetting-curvethe-dirty-secret-of-corporate-training
  4. https://mfour.com/blog/walmart-is-stealing-from-amazon-and-its-working/
New habits: 76% now buy online, pick-up in-store.

Foot traffic has evolved.

Once an “in-store” metric, it’s now expanded to include online impressions as well. As an omnichannel metric, foot traffic is as vital to retailers, as essential workers are in a crisis.

In March, shopping came to a screeching halt1—so did in-store traffic. Retailers, big and small, could no longer rely on in-store sales. They were forced to expand. Yet, savvy retailers leaned into the change. They found a way to protect in-store habits, while ringing in extra sales online. 

How BOPIS boosts sales.

A hybrid approach, Buy Online, Pick-up In-Store (BOPIS) brings together the best of both worlds. It lets customers get what they want—and protects the habit of in-store shopping. It’s an evolution.

And, it’s not new. Even so, the click-and-collect method has gained serious adoption in the past few months. In fact, 76% of US consumers are now buying online and picking up items in-store2.

Here’s why BOPIS skyrocketed in the crisis, it’s:

  • Fast. Items are ready for pickup in an hour, not days.
  • Free. 48% of shoppers use BOPIS to counter shipping fees3.
  • Safe. Consumers don’t have mass exposure to other shoppers.
  • Easy. There are no lines and no waiting; it’s instant in-store gratification.
  • Assured. Buyers have a 100% guarantee their item is in-stock at the store.

What should I know?

A BOPIS plan is essential to retailers, consumer goods companies—and market research firms, alike. Here are three ways to leverage consumer insights to build, or strengthen, your plans.

1. Harness the MAYA4 principle.

A woman buying online, ready to pick-up in-store

BOPIS creates a new, but familiar, habit. 

Retailers offset the “newness” of buying online by making it familiar: with an in-store pickup, showcasing the Most Advanced Yet Acceptable (MAYA) principle4 of making something novel feel familiar. Adding that in-store component creates instant comfort.

In times where consumers feel anxious, they crave this level of familiarity. If you’re a retailer and don’t have a BOPIS strategy—or just need to see how you’re doing, it’s a great time test it on real consumers. Observe shoppers as they walk inside a store, go online, or access an app, then survey them to see how they feel about your strategy.

2. Map the online Path-2-Purchase®. 

The crisis cratered brand loyalty5.

When shoppers couldn’t find what they wanted, they broke brand habits. And, they did so en force: 72% of in-store shoppers tried new brands in light of COVID-19. 

Meanwhile, buyers tried on new behaviors. A full 73% moved to shopping on apps. Their actions drove a massive increase in eCommerce. And brands mapped their online Path-2-Purchase® to better meet their needs. You can too. Hear real consumers share in-the-moment, digital insights. Then, adjust the customer experience model for your brand or product, as needed.

3. Survey digital shopping behavior. 

Online sales are up 50%6

Shoppers are buying into omni-channel attitudes and behaviors—literally. And, the more they repeat these behaviors, the more permanent they become. We’re watching it now, 79% have already said they plan to keep shopping on apps after the crisis ends.

The change is permanent. Stay a step ahead of your competition by keeping a pulse on consumer behavior. This is a good time to see where consumers are going online and in-store, find out which apps they’re using, and survey them based on the actions they take. If you need a holistic view, consider a mobile tracker to track their data over time. It’s a helpful way to stay in touch with consumer needs.

We’re facing a new world.

One we didn’t dream of—even four months ago. As crazy as times are, they will also make us stronger. This is the time to be agile in our roles. A time to evolve. To be bold; be brave. And, if it makes sense for your business, to put in a strategy and capitalize on BOPIS. We can help. 

References:

  1. https://mfour.com/blog/geo-validated-traffic-top-5-dmas-return/ 
  2. https://www.mytotalretail.com/article/consumer-demand-for-bopis-and-virtual-service-increases-in-light-of-covid-19/
  3. https://www.bigcommerce.com/blog/bopis/#bopis-performance-in-the-retail-market
  4. https://www.theatlantic.com/magazine/archive/2017/01/what-makes-things-cool/508772/
  5. https://mfour.com/blog/the-new-hierarchy-four-stages-of-the-covid-19-consumer/ 
  6. https://mfour.com/report/consumer-spending-73-now-buying-on-apps/
Geo-validated traffic: the top 5 DMAs return.

Foot traffic screeched to a halt in March.

As states set-up stay-at-home protocols, consumers took action. They hunkered down inside their homes and prepared to weather the virus inside. 

Now in May, we’re starting to see the rising tide of recovery. 

Figure 1: Normalized Percentage Change to Observed Foot Traffic in The Top 5 DMAs

The Surveys On The Go® consumer panel shows a notable spike in foot traffic across all of the top five designated market areas (DMAs). 

Leading the charge, Atlanta rebounded in early April. Dallas/Fort Worth followed suit, taking the lead before month’s end. Chicago was a bit shy⁠—taking a bit of time before it started its climb. And, Los Angeles and New York are bringing up the rear, making progress at a much slower rate. 

Yet, New York’s movement may be the most significant; they were hit hardest. 

This makes their progress especially encouraging. It speaks to the desire for consumers to return to a “new normal”1 as the backbone of the economy2. So, while the economy will take time to heal3, it appears that we’re headed in the right direction; a great sign for spending.

Need more?

See new trends in your consumers’ geo-validated shopping visits as they navigate the top 5 DMA’s. Then, survey their opinions to get the “who, where, and why” as they handle each phase of the COVID-19 pandemic. For assistance, email solutions@mfour.com

References:

  1. https://mfour.com/blog/the-new-hierarchy-four-stages-of-the-covid-19-consumer/
  2. https://mfour.com/blog/coronavirus-impact/
  3. https://mfour.com/blog/digital-visibility-three-ways-to-combat-a-down-economy/
The new hierarchy: four stages of the COVID-19 consumer.

We’ve all been amazed by the speed at which our economy went from overdrive to near zero. Brands too, realize how quickly the rules have changed—but, it’s still anyone’s game.

So, how do you win loyalty from today’s consumer?

Start by understanding your buyer, and how behaviors have changed.

We turned to Maslow to understand why consumers’ inability to meet basic needs knee-deep in a quarantine, left them almost devoid of brand loyalty.

Then we looked at how they’ve evolved, what their needs are, and how we can influence their new behaviors.

Let’s look at the evolution.

Hierarchy #1: The quarantined consumer.

The quarantined consumer was born at the start of the crisis.

Focused almost completely on safety, consumers stepped inside of their homes and shuttered their doors to protect themselves as they prepared for a lockdown.

In these first few weeks, we watched as buyers stopped almost all in-person social interaction: 92% limited time with friends and family. And 74% started to work remotely. Their actions directly impacted their spending habits, as 62% of shoppers visited essential stores alone.

Here, buyers stocked up only on items they needed, anxiously going in and out of stores as fast as they could, while 50% took safety precautions before they even walked in.

Hierarchy #2: The semi-quarantined consumer.

As consumers stockpiled, they created a shortage of supplies.

That spike in demand frayed buyers’ nerves. Brand loyalty cratered, as the semi-quarantined consumer stocked up for two-to-four weeks, causing a 65% increase in nonperishable foods.

As short-term demand surged, 63% of shoppers couldn’t find what they needed. They were left with a decision: try a new brand, or go without. Not wanting to be without, 32% of shoppers switched stores and 74% of app users decided to ditch brand loyalty altogether.

Hierarchy #3: The evolving consumer.

As the crisis evolved, consumers did too.

Whether they started to feel more safe, or were just antsy to get out, we watched as they adapted their behavior to find items they were looking for.  

In the process, they broke long standing habits: 73% of consumers started buying on apps, with 47% of new users downloading an app because of COVID-19. They also began changing their daily routines: 53% increased their grocery app usage and 72% of in-store shoppers tried new brands. 

As they broke habits, they became primed to make major changes.

Hierarchy #4: The new consumer.

woman shopping online and in-store

The result? 

We have a new consumer. A digital buyer with (even more) omnichannel attitudes and behaviors. This person diligently researches online before they buy. They’re just as happy using the internet to get their groceries as they are to buy them in-store. And 58% will keep using a new brand they’ve found.

The new consumer will remain digital in their behavior and their expectations have grown higher. They know brands have used this time to ease into a digital path and they expect to be rewarded for their loyalty with a better overall experience. New phrases like “buy online, pickup in store” are now part of everyday consumer lexicons.  

These shifts are permanent. The new consumer is asking us to change and meet their evolved needs. It’s clear, new consumers are resilient in finding what they need; they will be loyal to those who provide what they’re asking for. This is a unique chance to learn from their feedback and make great business decisions.

Need help?

For the full research report, or for assistance, email solutions@mfour.com.

References:

  1. https://mfour.com/report/coronavirus-what-customers-are-buying/
  2. https://mfour.com/report/consumer-spending-73-now-buying-on-apps/
  3. https://mfour.com/report/58-of-observed-in-store-shoppers-open-to-new-brands/
  4. https://mfour.com/report/observed-buyers-34-unemployed-24-stopped-stockpiling-and-more/
  5. https://mfour.com/report/ga-reopen-virtual-focus-group/
Witnessed: buyer concerns lifting.

Buyer concerns are lifting.

Consumers are starting to evolve their quarantine behaviors. As they do, their changes need to be tracked, so that brands can capitalize on their needs—and fit into the new normal, as it continues to unfold.  

Here are three things you should know.

#1. They’re not stockpiling.

A full 24% of buyers have stopped stockpiling. Across the board, consumers are spending less on grocery items than they did at the start of April.

Figure 1 shows the decline as shoppers have started to buy fewer staple food items.

This change in behavior comes at the same time as the economy has slowly started to reopen.

#2: They’re feeling safer.

Shoppers are going into stores anyway. They’re now significantly more likely to report shopping in a store, regardless of the safety measures that are in place. This was not the case even a week ago.

In fact, 32% say they will shop a store with or without safety measures; up 5% in one week.

We’re also seeing more buyers in-store with their spouses and kids; up 7% in two weeks.

In Figure 2, we can see that their concern and anxiety levels have started to go down as well.

#3: They’re getting by.

This hasn’t been easy on anyone. Buyers are unemployed, as of this post, the rate is 34%. But they are still spending, they’re just pinching pennies where they feel like they need to.

Right now, that means being price sensitive in pet care and personal care products, down 27%.

As well as in sweets and toilet paper, down 12%.

On the other hand, consumers are being loyal to frozen food and snack brands, where there’s an 8% increase in brand-driven purchases.  

What’s next?

We’re seeing positive signs in spending.

As the economy continues to open, it is essential to track consumer behavior, particularly as we’ve seen 72%1 of shoppers trying new brands in-store, while looking for what they need.

Each week, we track our consumers’ in-store shopping habits. If you want to know the impact on your marketplace, ask our panel any question about your brand. For more on the research report, or for assistance, email solutions@mfour.com.

References:

  1. https://mfour.com/wp-content/uploads/2020/04/Permanent-Brand-Shifts.pdf?utm_source=hs_email&utm_medium=email&_hsenc=p2ANqtz–odE6tL3nN_2EXBQ3mP54yVqqeIg6zas6Jvr4tk0k2N2SvUGI3UktH40gMYr2XYIRUbHNR
How Coronavirus is impacting consumer spending.

Coronavirus is a consumervirus.

It’s as deadly to the economy, as it is to people.

In less than two months, COVID-191 has ravaged the U.S. economy, savagly infecting consumer behavior as it spreads around the world. And, according to Oxford Economics, it’s estimated the virus will likely lead to $1 trillion in global losses2 before it’s stopped.

Here’s why that matters.

Consumer spending in the U.S. accounts for about 70%3 of the economy. That’s a massive amount of balance precariously placed on the health of consumer behavior. Any move in the wrong direction, and we find ourselves in a very painful predicament.

Our economy depends on China. A lot.

The U.S. supply chain is very closely tied to China. And the American Chamber of Commerce in Shanghai has found that 78% of American companies don’t have enough staff to resume full production4. Nearly half said the shutdowns are impacting their global supply chains.

On Feb. 1, Apple closed all of its retail stores, and offices in China 5.

The impact on consumerism is clear, especially in technology. China makes roughly half of the world’s LCD panels for TVs, laptops, and computer monitors. Its economic impact6 is expected The longer Coronavirus is in play, the greater the impact will be.to be worse than:

  • 2003 outbreak of SARS
  • 2011 Fukushima nuclear disaster
  • 2011 Thailand floods

We’re seeing the early impact on consumer behavior. Eighty-six percent of our consumer panel is limiting social interaction. Travel is social. So, we’d expect other high-traffic businesses to feel the effects3, as the outbreak continues.

Jeff Harrelson, COO at MFour.

What we found in researching consumers

Research highlights from the Surveys On The Go® consumer panel:

  • 38% airport decline was observed through GPS tracking on panelists’ smartphones
  • 72% of panelists expected the concern of Coronavirus to last more than two months
  • 86% planned to limit social interactions, or visits to public places, as a preventive step

This means COVID-19 caused a 38% drop in U.S. consumer behavior.

In early January, the first death7 linked to COVID-19 was reported. Consumers took notice. Two weeks later, MFour traced its consumer panel’s visitation to the top 10 U.S. airports. Using the market research app, Surveys On The Go®, the company found a 38% decline in airport visits. The drop correlates to the first reported Coronavirus case in the U.S8.

The behavioral data tells us travel was much more impacted than what was stated in the surveys we ran. This is why watching what consumers do is more important than just surveying. As we tracked people, we saw up to a 38% dip in travel, compared to the 23% that was stated in surveys. That’s a 15% shift in behavior, observed by tracking their locations.

Research was conducted comparing visitation to top 10 US airports by MFour’s consumer panel.  Examined Jan – Feb 2019 vs. same period 2020.  

For a full copy of the Research Reports click here to contact MFour.

References:

  1. https://www.cdc.gov/coronavirus/2019-ncov/faq.html
  2. https://www.oxfordeconomics.com/my-oxford/publications/537166
  3. https://fivethirtyeight.blogs.nytimes.com/2010/09/19/consumer-spending-and-the-economy/
  4. https://www.amcham-shanghai.org/en/article/supply-chains-and-factory-openings-amcham-shanghai-mini-survey
  5. https://qz.com/1800540/how-coronavirus-is-upending-the-tech-industrys-supply-chain/
  6. https://www.wsj.com/articles/commentary-supply-chain-risks-from-the-coronavirus-demand-immediate-action-11582054704
  7. https://apnews.com/c0e87e089a89fa5579e1c63acded7d46
  8. https://www.cdc.gov/media/releases/2020/p0121-novel-coronavirus-travel-case.html

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