(Updated March 24, 2020)
As the novel coronavirus (COVID-19) sweeps the world, consumers are being forced to dramatically change their purchase behaviors. Nielsen is tracking these changes and establishing clear navigation beacons for companies trying to understand the changes and plan for what comes next.
We’ll be updating this page regularly with the latest news and insights. If you have specific questions, reach out to your Nielsen representative or contact us.
INTERESTED IN More MARKET-SPECIFIC INSIGHTS ARound THE IMPACT OF COVID-19 ON CONSUMER BEHAVIOR?
Key Consumer Behavior Thresholds
A Nielsen investigation has identified six key consumer behavior threshold levels that tie directly to concerns around the COVID-19 outbreak. The thresholds offer early signals of spending patterns, particularly for emergency pantry items and health supplies, and we are seeing these patterns being mirrored across multiple markets.
We’re monitoring these patterns closely, as they are still evolving. However, when reviewed across currently impacted countries, they can help provide a set of leading indicators for packaged goods manufacturers and retailers faced with supply issues as they race to meet record levels of demand and changing purchase habits.
Threshold levels 1-4 are beginning to show predictable signs of spending from consumers. To help markets understand what’s to come as they enter later thresholds, we’ve spotlighted several markets to showcase the key trends that have defined purchasing behaviors in the later thresholds levels as businesses look for guidance on what is likely to happen.
While things are still early and some regions continue to see COVID-19 cases, markets can look to China for indicators of purchase trends after the height of exposure. A month after the crisis peaked, life is slowly starting to return to a new normal. Travel restrictions are beginning to relax, people are returning to work, many factories have reopened, e-commerce and food delivery peaks are stabilizing, and many stores are reopening.
Retailers are upgrading their product assortment to meet consumers’ newly emerging needs, and leveraging e-commerce and social media, as well as promotional tactics, to encourage consumers to return to their normal shopping patterns. However, some long-time purchasing habits may be permanently changed. Some retailers were adversely impacted, but those who were able to pivot quickly came out ahead and are changing the retail landscape.
“THERE IS AN EMERGENCE OF A NEW RETAIL ENVIRONMENT. CONSUMERS WHO MIGHT HAVE BEEN HESITANT TO EMBRACE ONLINE SHOPPING PREVIOUSLY, OLDER GENERATION CONSUMERS OR FOR FRESH PURCHASES, HAVE NOW TRIALLED IT AND EXPERIENCED THE BENEFITS SO WILL UNLIKELY REVERT TO THEIR OLD PATTERNS.”
RYAN ZHOU, VICE PRESIDENT CPG, NIELSEN CONNECT CHINA
To better understand how the retail landscape in China has changed since the coronavirus outbreak, we surveyed more than 10,000 retailers in the market.
The outbreak in Italy escalated quickly, and the country reported its first death on February 21. Shortly after, the government began to shut down public events, schools and implemented quarantine restrictions in towns, accelerating a spike in shelf stable goods and health-safety products.
In the week preceding the March 9 government announcement of a nationwide lockdown, brick and mortar large format store sales were still growing at double digits, but e-commerce sales for the latest week ending March 8 are up 82.3% compared with the same week last year.
“EVEN IN THE DAYS IMMEDIATELY PRECEDING THE DECREE OF 8 MARCH, LARGE-SCALE RETAIL SALES GREW AT A RAPID PACE AND THEN EXPLODED ON SUNDAY FOLLOWING THE NEW RESTRICTIVE MEASURES. THE GROWTH IN SALES TESTIFIES, FOR THE THIRD CONSECUTIVE WEEK, THE AVAILABILITY OF PRODUCTS ON THE SHELVES AND THE ORGANIZATIONAL CAPACITY OF THE CONSUMER GOODS SECTOR TO FACE THE EXCEPTIONAL SITUATION.”
ROMOLO DE CAMILLIS, RETAIL SERVICE DIRECTOR, NIELSEN CONNECT ITALY
Between March 12 and 16, France swiftly moved from Threshold 4 to Threshold 5, as they progressively announced the closure of schools, non-essential locations, to implementing a 15-day containment system restricting movement to necessary and emergency purposes.
Following President’s Marcon’s address on March 12, hypermarkets and supermarkets saw record-breaking sales spiking 84% on the following day (March 13) and up 38% for the whole week, with 6 to 7 times more products sold compared to a regular Friday. In the previous week, the e-commerce and home delivery also saw huge gains, growing 29% and 72%, respectively, compared to the same period of the previous year.
“Retailers ensured the supply chain was well-stocked with products that would be in highest demand in order to guarantee optimal availability, sometimes to the detriment of less essential categories in this context. The limiting factor is not necessarily the stock coverage in warehouses but whether or not there would be enough trucks available to transport all these quantities to an unprecedented level.”
Sébastien Etévé, OSA Supply-Chain expert at Nielsen
As Americans entered the quarantined living preparations threshold, they drove a surge in demand for hand sanitizers through early March. This led to a temporary shortage and drop off in sales for traditional hand sanitizers while many turned instead to DIY hand sanitizer solutions as seen in the sharp rise of after sun treatments (+283%) and rubbing alcohol (+277%) in the week ended March 14.
Following the March 16 CDC announcement of a 15-day pause on activities, the U.S. entered a new threshold level of COVID-19 concern, as many Americans found themselves living with a range of new restrictions. Between March 11-20, as states began to ramp up testing, the number of cases grew from 1,000 to over 16,000. In response, local governments and public institutions continue to announce closures and regulations for various businesses, including restaurants, bars, gyms and theaters. With many amenities closing, Americans will be shifting their consumption patterns, limiting their exposure and only venturing out of their homes for essential stock-up trips. Nielsen will continue to monitor these shifts.
“In states around the perimeter of the country, CONSUMERS ARE BEGINNING TO PREPARE FOR A SHIFT IN LIFESTYLE. EARLY ON WE SAW SPIKES IN health safety product SALES CORRELATING WITH MAJOR ANNOUNCEMENTS IN THOSE AREAS AND SHIFTS FROM SHOPPING THE PERIMETER OF THE STORE TO THE CENTER. DRASTIC OUT-OF-STOCKS MAY RISE IF CONCERNS OVER HEALTHCARE PROVIDER AND GOVERNMENT PREPAREDNESS GROW.”
LAURA MCCULLOUGH, EXECUTIVE VICE PRESIDENT OF U.S. MANUFACTURER CLIENT SUCCESS, NIELSEN
As more Americans stay home, their media habits are also shifting. Staying put in our homes can lead to almost a 60% increase in the amount of content we watch in some cases and potentially more depending on the reasons.
“As patterns begin to emerge in response to news events of this nature, it will be imperative for companies to learn from these scenarios so they can sustain growth even in times where COVID-19 has uprooted people’s lives. These patterns will help provide leading and trailing indicators to those trying to understand how people will respond as developments continue to play out at different times in different countries.”
Scott McKenzie, Nielsen’s Global Intelligence leader
Responding to Consumers’ COVID-19 Concerns
While many markets are still in the middle of this global pandemic, there are some early signs that our consumer habits will be forever changed by COVID-19. Three critical accelerators intersect with the six consumer thresholds and will fast track long-term behavioral shifts. We’ve identified a few ways businesses can prepare for shifting consumer demands as markets move through the six thresholds.
Emphasize Quality and Efficacy
Throughout the thresholds, consumers will be seeking greater assurance that the products they buy are free of risk and of the highest quality when it comes to safety standards and efficacy, particularly with respect to cleaning products, antiseptics and food items. In the short term, this intensified demand from consumers will require manufacturers, retailers and other related industry players to clearly communicate why their products and supply chains should be trusted. In the longer term, and dependent on the eventual scale and impact that COVID-19 has on consumer markets, it may speed up a re-think on how shoppers evaluate purchases and the benefits that they see as the key factors to consider.
Be Transparent About Local Origins
More than ever, shoppers want to understand the supply chain, with complete transparency from farm to factory to distribution, and they want details of the measures being taken to assure their safety. Promoting a product’s local origins could help manufacturers and retailers assuage some consumer concerns. A Nielsen survey on disloyalty last year found that global consumers report being heavily swayed by origin: 11% of global consumers said they only bought products manufactured in their country while an additional 54% “mostly” bought local products.
With millions working from home and digital connectivity taking even more of a hold on everyday habits, consumers will have greater motivations and fewer perceived barriers to more actively seek technology-enabled solutions to assist in everyday tasks like shopping. Companies that can leverage technologies—by meeting changing consumer demands online, enabling seamless interactions through direct-to-consumer offerings and enhancing consumer experience with augmented and virtual realities—have the opportunity to earn consumer loyalty well after consumers’ concerns subside.