During the past four years, People magazine has published its “50 Companies that Care” list. This year Publix, a food and pharmacy chain, took the top spot. Although it is a large company, Publix’s business philosophy is shared by many entrepreneurs who successfully operate small businesses in their local communities. Todd Jones, Publix CEO, says, “When the first Publix store opened 90 years ago, our founder, George Jenkins, instilled a set of values that still guides us today. Our philosophy has always been to respect our associates’ dignity, treat our customers like royalty, and give back to our communities.”
Companies that behave selflessly during the economic and social crisis created due to the Coronavirus reflect the qualities consumers will expect from businesses they plan to support in the future. Consumers place a high value on truth and integrity. They will reward those good corporate stewards who are willing to use their resources to better our society.
Companies should be aware of the real fear consumers have about the virus. Businesses need to show they are doing everything possible in terms of service and convenience to make life easier for shoppers.
Consumers are Watching their Wallets
Consumers are more cautious about how and where they spend money. Although the nation continues to rebound, no one has forgotten how the supply chain’s disruption led to a shortage of food and essentials. Unemployment figures are lower than a month ago. Yet, many consumers continue to watch their spending because they are uncertain about their financial situations. This slow-down in spending has directly impacted the profitability of both large and small businesses. Changes in consumer buying behavior can be attributed to several factors:
- Fears related to health
- Financial instability and job security
- Diminished quality of life
- Renewed optimism after social isolation
Fears Related to Health
As of September, more than 6.5 million people in the U.S have been infected with the Coronavirus—resulting in 193,000 deaths. In an attempt to slow down the spread, every state has limited large gatherings and encouraged people to work from home. Due to these unprecedented measures, many large retailers and small businesses face an uphill climb to keep their heads above water. However, those businesses that sell groceries, household items, and in-home entertainment are thriving. Sales of packaged goods have increased by 9.5 percent. Additionally, the demand for personal protection items such as masks, hand sanitizers, and cleaners consistently leaves many shelves empty.
COVID-19 has made the pursuit of health care products a way of life that has shifted how consumers spend. Although scientists predict there will be a vaccine for the virus by 2021, the fear of germs and maintaining good hygiene will be with us for a long time. Businesses should make it easy for customers to do business with them by making an effort to minimize their fears. There has been a dramatic increase in the number of consumers who want to buy-online-and-pick-up in-store (BOPIS) and buy-online-and-ship-to store (BOSS). Data generated by Adobe analytics indicates BOPIS orders increased 62 percent year over year from February to March.
Financial Instability and Job Security
The pandemic has put millions of Americans out of work and given those who still have jobs a growing sense of financial insecurity. Despite making gains, layoffs have remained at historically high levels for the past six months. According to the Bureau of Labor Statistics, August’s unemployment rate fell by 2.8 million people, leaving 13.6 million people seeking employment. Although employment is rising, the numbers fall short of the levels seen in February before the pandemic by 11.5 million, or 7.6 percent. Additionally, more recent evidence indicates that the job market is weakening after making gains through the spring and summer months. Hiring has slowed, and many workers believe their job loss will be permanent. 13.4 million people are currently seeking unemployment benefits, further evidence that new hiring is not offsetting job losses.
Based on the vital role hardware stores and home improvement centers play in providing merchandise to their community during a crisis, the government designates they are essential businesses. Many operations were in a financial position to retain current employees and add to staff after more people began to venture outdoors after the country shut down.
Diminished Quality of Life
If forecasts are correct, the recovery will be slow—possibly worse than the 2009 global recession. It’s predicted that many countries may recover by 2021, but the United States’ recovery will take longer. Government support and economic relief packages brought short-term relief, and many industries that affect our quality of life, such as airlines, hotels, travel, and tourism, continue to struggle. Now is the time for retailers to review the types of experiences they are offering customers and make adjustments based on the new reality of how people are living their lives.
Renewed Optimism After Social Isolation
After being isolated for so long, consumers will embrace new experiences. What worked in the past may not be enough to satisfy their craving for fresh retail experiences that are entertaining and convey a sense of optimism. Retailers who can help customers move beyond the gloom and doom that has dominated our lives in 2020 will make shoppers feel better. When consumers are in a good space emotionally, they spend more money. People are seeking ways to reconnect to those things that are comforting and familiar. Make your business the place where they want to shop by focusing on service, convenience, and supporting your community. Stay positive and make plans to come back strong in 2021.