How is Coronavirus Affecting Consumer Behavior?
- Retail
- Strategy
KELLY BISHOP | GROUP ACCOUNT DIRECTOR
April 7, 2020
KELLY BISHOP | GROUP ACCOUNT DIRECTOR
April 7, 2020
Nike
As retailers and consumers alike settle in to the new normal brought by the spread of COVID-19, it’s obvious who was prepared for such a disaster and who was not. With most retail doors shuttered, an almost all-digital retail landscape has emerged, leaving many retailers to quickly pivot to meet online demand and allowing those with a digital-first mindset to rise from the rubble and maintain a somewhat normal status quo.
Amid the decline, one household name has continued to persevere: Nike. While COVID-19 has posed challenges for Nike brick and mortar, their digital mindset has proved beneficial. This week, Nike dropped the subscription fee to the Nike Training Club app, indicating that after doing so in China during the worst of the outbreak, the digital engagement translated to an increase of 30% in online sales. It’s notable that Nike’s emphasis on its digital properties in 2019 helped set it up for success to stay engaged with its customer base, provide them with a service they need in the world’s current state and still maintain and even grow sales through its ecommerce platforms. Nike reported digital sales up 36% YOY. This digital-forward playbook, along with their new “Play Inside, Play for the World” campaign, will be used as the virus spreads through Europe and the US.
How consumers return to shopping after this is over is yet to be determined. It will be interesting to see who emerges on the other side, and where consumers go to buy as a means to get out of the house for some much-needed fresh air.
Behavior & Trends
Needless to say, consumer behavior has changed since the outbreak of the coronavirus. Retailers are closed and consumers are staying home. We’re all well aware of the run on hand sanitizer, face masks, soap, toilet paper, bottled water and non-perishable foods. Psychologists believe this is a natural reaction. Once humans feel threatened or anxious, their first step is to gain some form of control of the situation. Unsurprisingly, there has also been a rise in goods to help protect against the terrifying possibilities of pandemic, such as security systems and guns.
Once consumers feel safe(r), they shift their focus to goods that benefit their well-being. With states issuing more stay-at-home orders each day, people are looking for ways to keep a normal routine and stay entertained.
Sales of yoga mats and resistance bands are ranking higher than ever on Amazon’s most popular products list, as people attempt to maintain their gym routine from home. This also includes a laundry list of fitness companies, such as Peloton, OrangeTheory and others, expanding their apps with free workouts and extended trial periods. Amazon has also seen a sharp increase in sales of board games and jigsaw puzzles, and Nintendo Switch consoles are sold out.
Perhaps the hardest part of social isolation is the need to stay connected. The popular video conferencing app Zoom has shown a 125% increase in share price and has risen to the #1 spot in the Apple App Store’s most popular app list, rising even above TikTok.
This increase in demand has led retailers like Amazon, Walmart, Pizza Hut, CVS and others to hire more than 800,000 workers to help fulfill demand during this shift in consumer behavior.
Every month,we poll our fellow Sandboxers and social media followers to gain real-time insight into what’s topical and trending in the world of retail. This month’s question:
Retail is a customer business. You’re trying to take care of the customer—solve something for the customer. And there’s no way to learn that in the classroom or in the corner office, or away from the customer. You’ve got to be in front of the customer.
– Erik Nordstrom, President, Nordstrom Direct
