Understanding COVID-19 and its Effects on Consumers

It has been nine weeks since China confirmed the first case of the coronavirus (COVID-19). Since then, nations across the world have seen its spread and felt its impact. The pandemic is not simply a public health issue, but also a financial issue that is affecting people and businesses on a deeply personal and emotional level.

Here in the United States, we’ve already begun to see the significant repercussions of COVID-19’s spread. Last week, we saw major professional sports leagues suspend operations, major events announce their cancellation, businesses shift to remote work, and widespread panic in the marketplace in preparation for social distancing or quarantine.

During this time, consumers have prioritized their purchases accordingly. At first, there was the rush for products that are essential to containing a virus, such as soaps, hand sanitizers, and face masks. Since then, grocery stores, wholesalers, and convenience stores have been packed to the brim with people seeking to stock up on non-perishable pantry goods and paper products. The demand, of course, has been so high that some stores have established quantity limits on the most sought-after goods and questions have arisen regarding supply chain challenges to come.

While the situation with COVID-19 is still exceedingly fluid here in the United States, we can learn from other countries that have dealt with the virus for longer periods of time. In Italy, consumers grew heavily reliant on online shopping as they prepared for quarantined life and reduced visits to physical stores. As the U.S. heads in the same direction, the infrastructure of online shopping will be put to the test as demand continues to skyrocket.

On the other side of the coin, China is furthest along in the process, with large levels of its population now returning to normal ways of living aside from the Hubei province. While it’s still early in the process, Nielsen reports that there are signs of long-term ramifications in terms of consumer behavior in China. Specifically, older generations are turning to online shopping to fulfill more of their household needs, which could signal a permanent behavior change.

It’s not all doom and gloom, though. While the coronavirus and its effects have led to social distancing and shakeups in consumer behavior, people across the world are showing that they’re still wired for human connection. Whether it’s Italian citizens playing music from their balconies or Spanish citizens participating in a group workout class from their respective rooftops, citizens across the globe continue to show their desire to connect. Though many of us may be confined to virtual fitness classes, happy hours, and hangouts in the meantime, that desire for one-to-one connections is sure to linger on well past the current pandemic.

For the latest information on COVID-19, please refer to the CDC and World Health Organization.

Sources: “Key Consumer Behavior Thresholds Identified as the Coronavirus Outbreak Evolves.” Nielsen Insights (2020), “Pandemic Paralysis.” Wunderman Thompson (2020), “COVID-19 in the US: What’s Happening Now?” Mintel (2020)