Spending Changes as Consumers Venture Out After Lockdown

By Scott Rankin

In KPMG LLP’s second survey of 1,000 consumers conducted in June 2020, we found that as the country begins opening up for business, U.S. consumer sentiment is mixed, with many consumers changing their spending habits and feeling uncertain about the future. Survey participants in June had an overall more pessimistic outlook than those surveyed in April, with views varying widely across generations; younger generations were more optimistic about economic recovery than their older counterparts.

More than 30% of the June survey participants have had either a full or partial reduction of employment status as a result of COVID-19. However, more than half of those individuals have already returned to work. A good indicator of purchasing power may be household income. Both surveys consistently show about 40% of households are experiencing a reduction in income.

Below are some important findings from the June survey:

  1. Compared to April, anticipation of reduced spending across discretionary categories like entertainment, restaurants, and apparel appears less pronounced in June.
  2. Consumer behaviors have changed to adjust for health and economic considerations. It appears some of the behaviors may be here to stay as we enter the recovery phase.
  3. Platforms that experienced high growth in demand during COVID-19 and that consumers anticipate using post COVID-19 may be platforms that are “here to stay.” Examples are remote learning platforms (76%), buying products online to pick up in-store (80%), wellness apps (90%) and home fitness equipment (80%).
  4. For consumers who have ventured out to restaurants or attended small gatherings with friends, most feel that appropriate measures were taken to maintain social distancing.
  5. As consumers plan for their summer spending, most suggest that the number of grocery trips will still be higher than pre-COVID-19 levels and trips to other specialty stores like apparel and furniture will be lower
  6. In terms of summer travel, a higher percentage of consumers feel they will take trips less frequently than those who anticipate traveling more frequently.

To succeed in the new normal, organizations may need to redefine their consumer approach. Accurately forecasting demand is very important with the uses of machine learning, finding the signals that matter at the store level. There is also a need to increase reach to key consumer demographics, and identify opportunities to improve price, promotion and discount structures. E-commerce platform integration may improve direct-to-consumer penetration and targeting, while applying advanced data and analytics may lead to greater efficiency and accelerate revenue across platforms, content and channels.

Scott Rankin is a principal and KPMG Strategy and Consumer and Retail leader. For more information or to arrange an interview, please contact Andreas Marathovouniotis.

 

Media contact

Andreas Marathovouniotis

Andreas Marathovouniotis

Associate Director, Corporate Communications, KPMG US

+1 201-307-7608

 

 

Scott Rankin

Scott Rankin

Advisory Industry Leader for Consumer & Retail, KPMG US

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