This is the first installment of The Great Reopening and Priority Reset Series, which reflects the results of a recurring consumer pulse survey. The objective of this series is to highlight the “priority reset” happening among consumers and how it is affecting their priorities for post-COVID-19 spending.
We will be publishing two parts for this edition. Edition 1, Part 1 will cover macro themes, and a subsequent report will identify strategically relevant segments of consumers with distinctly different attitudinal and behavioral profiles.
This survey includes responses captured April 21-23, 2021, from ~1,000 U.S. consumers who are demographically representative of the general population. Additional surveys can be found at the L.E.K. COVID-19 Insights Center.
Edition 1, Part 1 yielded a number of interesting insights about changes in consumers’ expectations of activities they will engage in and categories they expect to spend money on once the outbreak is contained.
Important note: All forward-looking data reported is a reflection of consumer sentiment/expectations and is not an official L.E.K. forecast.
Many Americans are unsure about taking the vaccine
Government investment and resources have been instrumental in mobilizing the vaccine effort across the country. With the supply of vaccines continuing to increase and states continuing to broaden eligibility standards, many Americans have been able to get at least their first dose of the vaccine in recent months.
As of June 18, 2021, the Centers for Disease Control and Prevention (CDC) reported that almost 148 million Americans have been fully vaccinated and another 28 million have received at least their first dose. While many Americans continue to schedule appointments for the vaccine, many others still have strong concerns about its efficacy and the potential for adverse side effects.
Overall, the results from this survey suggest that ~10% of Americans never plan to get the vaccine and another ~11% are still unsure about getting it, although those proportions vary across demographics (e.g., race, gender, political affiliation, level of education).
The most common concern among those who are unsure about the vaccine or never plan to get it is the potential for adverse effects. This concern is shared almost universally across the major demographic cuts available in the data.
Consumers expect to use the majority of their stimulus checks in a defensive manner
To help support the economy in the wake of the COVID-19 pandemic, the government has passed multiple rounds of economic stimulus payments. The latest round of government checks started being distributed in mid-March 2021.
Consumers expect to use the majority of their stimulus checks in a defensive manner, either to increase savings (43%) or pay down debt (20%). Among the portion of the checks that consumers do intend to spend, essentials (e.g., groceries) remain the most common categories of spend, with a smaller portion allocated to discretionary items.
These findings are similar to those related to previous rounds of stimulus checks, as the Federal Reserve Bank of New York estimates that 36.4% and 37.1% of the round 1 and 2 stimulus checks, respectively, were left in savings. The increased savings rate of this third round could be a positive sign that people are in more stable financial positions as we emerge from the pandemic and are able to put more money away to protect against future uncertainty.
The most common categories of expected spend on essential purchases are groceries, personal care products and healthcare products (e.g., medications, vitamins, supplements). The most common discretionary items cited among consumers are apparel, footwear, accessories, and dining out as people embrace reopenings across the country.
Consumer spending is expected to bounce back
During the pandemic, categories like grocery, takeout, healthcare, and at-home entertainment surged as consumers were concerned about their health and spending more time at home during COVID-related lockdowns. Conversely, categories like dining out and out-of-home entertainment were among the most negatively impacted.
So how do consumers expect their behaviors to change? Once the outbreak is contained, many consumers expect to continue spending more on groceries, healthcare products, and at-home entertainment. Similarly, they expect to continue spending less on dining out, out-of-home entertainment (e.g., sporting events), and taxis and ride shares.
Many pandemic activities will persist
For post-COVID-19 activities, consumers expect to spend more time with friends and family, either participating in family activities or visiting them at their homes. They also expect to spend more time outside (e.g., going to the park) and visiting places that increase their well-being (e.g., spas, gyms) relative to pre-pandemic levels.
Consumers expect to go to grocery stores and pharmacies less post-COVID-19, as many were introduced to the convenience of online ordering and delivery during COVID-19 lockdowns.
Many consumers also expect to continue cooking more meals at home post-COVID-19, as they see it as a way to eat healthier, save money and spend more time enjoying the activity itself.
While many employees will be returning to their offices post-COVID-19, 34% of working hours are expected to be away from the office, as consumers prefer the flexibility of working from home and the time saved from not commuting.
Pet ownership has accelerated
One sector that benefited immensely from COVID-19 lockdowns was the pet industry. The number of pet dogs and cats in the U.S. increased by 9 million in 2020, an increase of 6%-7% over 2019. Demand was so high that many consumers are still on waiting lists for pets across the country in 2021.
Looking ahead to when the COVID-19 outbreak is contained, there is still runway for growth among both pet owners and non-pet owners. Eleven to thirteen percent of pet owners and 3%-10% of non-pet owners say they are interested in purchasing or adopting additional pets in 2021-23. In addition, millions of existing pets die each year, generating additional demand for pets in the future.
Consumers expect to continue using virtual meeting options
The COVID-19 pandemic put a virtual halt on travel as many countries enacted travel bans and even discouraged domestic travel through requirements of multiweek quarantine periods.
Business travel is expected to be negatively impacted post-COVID-19, as many companies and employees have realized the efficiency of virtual alternatives to in-person meetings (e.g., Zoom). On average, consumers expect to replace 25% of pre-pandemic business travel with virtual substitutes once the outbreak is contained.
The largest declines in post-COVID-19 business travel are expected from senior executives and those who work in administration and medical and healthcare services.
Consumers expect to take more leisure trips
Leisure travel expectations are more optimistic, as many consumers expect to travel more post-COVID-19 than they did before the pandemic. While concerns about safety and cost persist, consumers overall expect to take more leisure trips per year than they did pre-COVID. This is especially true among younger generations.
When taking leisure trips post-COVID-19 consumers expect to spend more time visiting friends and family and going to outdoor settings (e.g., parks), as they plan to travel more by car and seek settings that allow for social distancing.
A look ahead to Edition 1, Part 2
The COVID-19 pandemic has driven a “priority reset” among consumers, where many expect to permanently change how they prioritize their time and what they spend money on.
Reviewing consumer sentiment and attitudinal shifts based on experiences during the COVID-19 pandemic, several themes emerged that will drive permanent shifts in consumer behaviors:
- Greater focus on health and wellness
- Increased focus on experiences among affluent consumers
- A reevaluation of discretionary spending
- Increased focus on balance and prioritization of family (e.g., children, significant other)
- More working hours spent away from the office and varying levels of flexibility across consumer groups
- Established consumers returning to pre-pandemic routines and spending
As a reminder, this is the first part of The Great Reopening and Priority Reset Series: Edition 1. A second report will continue to explore these macro trends and identify how the pandemic has permanently changed the attitudes and priorities for different groups of consumers. We expect to share the next edition in this series in the coming weeks.
We understand that many of our clients are facing new disruptions and increased uncertainty in their business outlooks. Some of these changes are likely to endure well beyond when the current pandemic has passed. While many of these changes will create challenges, new opportunities will emerge. We will continue to share our ideas and insights through our website and other media over the coming months.
We wish good health to you and your loved ones, and we look forward to continuing to support our clients through this difficult time.
To continue the discussion, please don’t hesitate to contact us.
Editor's note: updated as of June 18, 2021.