What if Everybody in the World Had a Baby and Changed Jobs at the Same Time?
That’s kind of how the past few months have felt. Normally, of course, major changes to consumer behavior can be linked to major life changes at the individual level, such as having a baby, moving or changing jobs. But as pointed out by Eddie Yoon, a think tank founder and business advisor, the pandemic is altering consumer behavior on a massive scale.
“The COVID-19 crisis is, of course, changing everyone’s life at once — and anyone who’s been to a grocery store can bear witness to the industry’s whiplash,” Yoon wrote recently in the Harvard Business Review. “During one week in March, U.S. grocery store sales spiked 77 percent over the previous year, while restaurant sales declined by 66 percent. In late April, grocery sales were still running 8 percent above average, with restaurants down 48 percent.”
Yoon says three big trends are likely to continue to weigh on consumer behavior. Some are related to the pandemic’s wallop; others have been in the making for quite a while and are likely to become more significant in coming years. They are:
- Work from home — Only 5 percent of Americans worked primarily from home in 2017. However, based on a couple of likely scenarios, Yoon forecasted that as many as 30 percent of workers now “could end up working from home, a meaningful amount, which is a four- to six-fold increase of what it was just a few years ago.” This is likely most true of somewhat affluent consumers living in large metro areas on both coasts. “These local markets will be the canary in the coal mine for much of the restaurant industry, grocery and many other industry verticals as well,” he wrote.
- Dinner for one — Single-person households are likely to continue to increase in number. These homes have very different buying habits from larger households. Nor should we count on a post-pandemic baby boom to help juice the economy, Yoon pointed out. Pandemics are not sexy.
- Don’t be dense — “Drive-thrus will likely become ubiquitous, not just for fast food, but for grocery stores and sit-down restaurants,” Yoon said. “This will require capital expenditures. Delivery demand will grow, forcing grocers and restaurants to find profitable ways to facilitate that. Smart restaurants may even become mini-grocers, selling related food items [shredded cheese with a pizza] as consumers seek to consolidate trips.”