The New Mindset about Essential Goods and Services
Essential goods and services? As our social isolation drags on, consumers are shifting their mindset about what they need. As consumers look for ways to outlast the pandemic, encourage your clients to adjust their messaging to boost the bottom line for your business and theirs.
The Initial Panic
We know the bad news about COVID-19’s impact on consumer spending. First quarter payment card data reveals a huge drop in sales activity for airlines (66%), department stores (42%) and hotels/motels (52%). Because consumers aren’t going out to eat, food stores recorded a 29% sales increase in March. Online grocery did even better with a 64% revenue increase that same month, according to Commerce Signals, a Verisk Financial company.
The New Normal
With many of us well into our second month of isolation, we are shifting our thoughts about what we consider essential goods and services, say Neuro-Insights analysts. When the pandemic first started, people rushed out to buy toilet paper, masks and gloves. They were also increasing their intake of adult beverages.
The initial sense of panic is shifting to resignation. We know it’s going to take a while to sort things out. We’re hoping that if we follow the guidelines, we’ll stay safe and eventually get back to normal. That mindset induces a different set of buying behavior. We’re now trying to take care of ourselves by using online workout videos. With everyone coexisting in the house, the chief cook is tiring of the kitchen routine and therefore, households are returning to buying takeout or delivery from their favorite restaurants.
Analysts believe that once our basic needs are being met, primarily food, shelter and safety, we’re now searching for ways to self-actualize, as Abraham Maslow described. That means showing off our creative sides through social media and video chats by displaying hair color, apparel and other accessories we’ve ordered online.
The Impact on Local Media
If you’re selling local media, you’ve also felt the impact. BIA predicts that the local ad market will amount to $144.3 billion this year, which is a 3.6% drop from last year’s spending levels. This estimate includes the anticipated cyclical bump of the upcoming election. Without those numbers, the numbers show a 10% drop. Like many other research shops, BIA expects our response to the virus to continue hitting the economy well into Q3 this year.
In addition, different media formats will experience significant variation in demand based on verticals. For example, heavy out-of-home advertisers include local entertainment and leisure operators. Their operating restrictions will extend into summer in some regions. With sporting events being cancelled for the next several months at least, local TV and radio media sellers will feel the pinch. SMBs are also pulling back on display advertising, especially if they’re not in the ‘essential’ categories.
Mark Fratrik, BIA’s SVP and chief economist notes, “We have assumed that there will be a strong rebound in the latter part of the year, but we will have to re-evaluate as the on-going economic impact becomes clearer.”
Essential Goods and Services
We’re all hungry for better news and it may take a while to arrive. In the meantime, consumers are buying essential goods and services. Help your clients prepare for events like limited openings using an array of media formats. To understand what formats are most influential, check out the AudienceSCAN profiles available on AdMall by SalesFuel.