As the weeks have passed in our new Corona reality, our purchasing habits have been making headlines. What started as a rush on toilet paper has evolved into a panic for hair clippers and dye. In early days, shelves were swept of pasta and beans. Lately, it’s all about puzzles.
Concern for our practical needs has given way to boredom. Through it all, we’ve been stockpiling, trying to gain some sort of control over our strange new circumstance.
But what is more interesting (and more indicative of where the future is headed) is who we’re purchasing from and how we’re making those decisions—calmly, strategically, and publicly.
Justin Trudeau is urging citizens to "buy Canadian" food to keep fishery workers and farmers in business. Interest in Purell is waning as hand sanitizer pops up at local farmers markets and craft breweries. Even our face masks have become symbolic of our personal brands: sewn in small batches by groups that donate as many as they sell.
So what’s going on?
Beyond meeting our basic needs, we are consuming products and services that are aligned with our values and express our social identities. In other words: we are using material goods and services to signal our belonging to different communities and articulate our social status.
Now more than ever, we are expanding how we make choices to include ethical, social, economic, and ecological considerations, and we’re turning consumption into a political act.
We may be isolated, but who we want to buy from is changing in highly public ways.
Our attention is fixed on our digital devices, reading headlines about which companies are abusing government aid, refusing refunds for events, and putting employees at risk. And we’re punishing them with every dollar we withhold.
At the same time, struggling local retailers are finding a massive sympathetic audience. We support them proudly, and we ask our social networks to do the same.
Consumers may be signaling their desire to consume more responsibly and ethically, but big box stores with well-established e-commerce platforms are thriving.
We suspect that this tension is driven by purchasing habits that are segmented across two types of needs: transactional and experiential.
Transactional purchasing is driven by convenience and ease. When we need toothpaste in a hurry, one-stop shopping and guaranteed home delivery are winning our wallets.
Experiential purchasing, on the other hand, is driven by our desire to consume in a way that aligns with our values. Restaurants we consider neighbors are earning our takeout orders.
More qualitative work is needed to better understand how consumers are segmenting their purchases and how this might change as businesses rapidly transform their e-commerce platforms and expand their digital offerings.
Digital interactions that are hyper-personalized, hyper-streamlined or offer the sense of discovery found in a physical store are seeing payback. And brand equity matters. As we strategically choose which businesses and organizations to support during economic restructuring, corporate responsibility is taking center stage.
For every industry, the cultural shift of COVID-19 is forcing organizations to accelerate their digital transformation.
Historical case studies have a few things to teach us about consumer behavior in times of widespread economic instability in western democratic countries. While people may initially panic-consume, we know that they are likely to share resources in the long term.
We are in a time of precarity, adjusting our expectations and budgeting differently without permanently transforming our consumption habits. We are making changes to maintain our existing lifestyles, rather than totally readjusting our lifestyles.
Scarcity is a different beast—one with a lasting generational impact. Following the Great Depression, we witnessed a generational cohort shift its attitude toward the consumption of goods and services, which remained their permanent orientation long after the Depression ended. The generation that lived through the Great Depression are known for being frugal, risk-averse savers.
For example: people are likely to share resources in times of food shortages, whereas people are likely to stockpile food and other resources as a survival tactic in times of famine.
We equate this current moment in the North American context with one of shortage (the result of the slowdown of the production supply chain) and not famine (which derives from economic and infrastructural collapse).
Deep down, we feel that everything’s going to be ok.
With brick and mortar shops forced to operate at drastically reduced capacity, how consumers negotiate the boundary between goods and services has made a permanent shift. This shift is most evident in the uptake of home delivery, where less human interaction has come to define a higher level of service.
New segments of consumers have been driven into the digital space, where they’ve discovered the ease and convenience of online shopping and a wealth of available offerings. These consumers will most likely continue to shop online, even as storefronts increase their operational capacity. In the past eight weeks, US e-commerce sales rose from 16% to 27% of all retail sales—growth equal to the entire ten-year period that preceded it.
As restrictions ease, we expect a number of trends accelerated by the pandemic crisis to persist.
In short: how we imagine consumption as a vehicle for social-political and economic change will continue to influence our purchasing habits across the digital and brick and mortar divide.
With powerful results.