The ongoing coronavirus pandemic has driven a global recession that inevitably shifted consumer sentiments and buying patterns, particularly for nonessential items.
According to a new report by Intelligence Node, about two-fifths of shoppers are likely to cut back their spending on footwear and apparel in the event of a recession — such as the one that arose as a consequence of the COVID-19 outbreak.
Meanwhile, the analytics firm reported that 32% of respondents are more keen to splurge on general produce, staples and other household essentials. Over the past couple of months, it found that the grocery sector has seen a “massive” spike, with online orders reaching record highs — from 3% to 5% growth pre-COVID-19 to a five-fold increase at the peak of the pandemic.
“The retail industry is going through a wave of transformation and will never be the same,” Intelligence Node CEO Sanjeev Sularia added. “Unprecedented external factors have carved out a sure-shot path for a data-driven, digital-first retail landscape.”
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Since the health crisis took hold in the United States five months ago, many retailers were forced to temporarily shutter their doors as part of government-mandated stay-at-home orders and widespread lockdowns. A number of boldface players in the fashion space — including J.Crew, JCPenney and Neiman Marcus — sought Chapter 11 protection, while others like Frye and the recently bankrupted New York & Co. announced permanent shutdowns or liquidations to rightsize their businesses.
While consumers may be more inclined to tighten their pursestrings on footwear and apparel these days, when they do spend on those items, they’re increasingly more likely to do so online. Intelligence Node’s data indicated that 31% respondents from all consumer demographics were shopping online for nonessentials like clothes, shoes and accessories at the start of the pandemic in March. In June, 82% of shoppers said they planned to continue making those purchases via e-commerce platforms even when stores reopen to the public.
On the bright side, this data, reported Intelligence Node, reveals an increase in buyer confidence and signals the start of a recovery for the fashion segment in particular and retail as a whole.
“Consumers have never been more complex or had higher expectations, and it is critical for brands to have an intimate understanding of how consumer opinions and behaviors are shifting,” Sularia said. “The brands that pay close attention to the changing tide of consumer expectations and embrace the new digital wave will be the ones that win.”