Consumers are re-evaluating their relationship with spending and consumption in favour of deeper human values. They are prioritising and becoming more conscious of their physical, emotional and mental well-being.
I had another round of interviews with different BBC Local Radio stations on Friday, 24th July 2020, to coincide with the mandatory face mask wearing in enclosed public places that came into effect on this date. I was asked to comment on why I think people are reluctant to spend, and how we feel about face masks.
There were 10 interviews in total over two hours. You can listen to two here – BBC Radio Berkshire at 2.12 in and BBC Radio Devon at 2.23 in – and read the longer version of the interviews summed up in this blog.
Change is the order of the day
Many people are indeed worried about how the pandemic will affect their lives further than it has already, and there’s general anxiety on a collective level to avoid the risk of being exposed to the virus.
The impact of the crisis therefore is bound to be felt not just in how we function as human beings but, also as consumers. We are going through significant changes that challenge the very foundations on which our assumptions about consumer behaviour and actions are based.
Simplify and amplify
Some changes are simply amplifications of emerging trends: the greater emphasis on sustainability and ethical production, improving our health and wellbeing, and the move towards a greater use of e-commerce.
Some may spring much more directly from the circumstances of the pandemic, such as a concentration on local goods and services, supporting independent retailers, and operating within a system in which you can see all the links.
In general, I think consumers might be willing to return to pre-lockdown shopping habits, but at the same time they feel ambiguous and conflicting to their own wish. Why?
Because on one hand, for the last four months, we have been missing multisensory shopping experiences that trigger emotional responses making us feel entertained, happy, and excited. And we want those back. On the other hand, the uncertainty and fear the pandemic brings is making consumers reluctant to spend.
From outward to inward aspirations
Our consumer psychology, the behaviour and attitudes, are going through rapid changes during this stressful time and as people are feeling more emotional than normal, so they are taking a more conservative approach to discretionary spending by focusing on immediate needs, such as financial and psychological.
Hence, we are seeing big shifts taking place in what, when, where and how consumers are purchasing. They are re-evaluating their relationship with spending and consumption in favour of deeper human values, while prioritising and becoming more conscious of their physical, emotional and mental well-being.
Split opinions on wearing face masks
I think one big reason why people don’t hold uniformed opinion about face masks is because from the begging of the lockdown we had contradictory messages arguing that there was not enough scientific evidence to back up their use by healthy people. Now we are told, that if we don’t wear a face mask in public places we are going to be fined.
However, there’s no more space for arguing and if anything, everyone should take on board what health experts are saying – “It’s not to protect yourself. It’s to protect people against the droplets coming out of your respiratory tract”.
Reduce the paradox of thrift
The uncertainty and fear of the unknown leads to reluctance in spending. But the uncertainty consumers are feeling right now is not the same with the one following the 2008 financial crisis, because this time around our health is at stake.
Naturally the government is keen on people to start spending again. After all, they have to take care not just of our health but of the economy too. Otherwise we might enter the paradox of thrift, which means that if everyone just stops spending, we can expect greater business failures and unemployment leading to depressed economy.
Shifting the consumer sentiment
Anything from the government that can provide a short-term boost to the economy and incentivise consumers to spend, but especially anything that can mitigate uncertainty as much as possible, will increase the chances to bringing spending forward.
However, the government has to provide uniform approach not contradictory messages that we’ve witnessed on different occasions during the lockdown. People need to see reliable and consistent advice that will strengthen their trust and confidence in government.
The bottom line is that, with unparalleled levels of disruption that Covid-19 brought, consumers have to feel safe, both health-wise and financially, before any normal spending resumes, so we can only expect spending recovery to be gradual.