It shouldn’t come as a surprise to marketers that consumers are rethinking their discretionary spending habits. About 64% say they’re planning to cut their total spend, with 55% estimating they will cut at least 10% to 20%. One-third of consumers in the U.S. will cut between 30% and 40%, and one in five may slash their budgets by 50% or more.
Survata conducted the study in early April to determine consumer shopping behavior and brand preferences during the pandemic. About 1,016 consumers participated. Unlike previous periods of economic uncertainty, the finding suggest consumers often choose brands they know and trust over their generic alternatives such as store brands or private labels across many, but not in all product categories.
While consumers may spend less, brand preference, research and price have become factors behind purchase behavior. It turns out consumers are three-times more likely to research products compared with before the pandemic, 39% now consider and compare prices, and 40% noted trust in brand as the biggest factor driving purchasing decisions.
Some 64% note perceived product availability, with 72% saying they are much more aware of product availability compared to before COVID-19, and 20% look for the origin of the product, whether or not it’s a highly impacted region.
Some 61% are more likely to choose trusted and name-brand products in the category of cleaning products, 58% in packaged and 57% in frozen foods, and 54% in soft drinks and coffee.
Generic products have performed better compared with their brand-name counterparts in times of uncertainty, because they tend to cost less.
U.S. consumers were split when it comes to over the counter medications. Half of consumers were likely or very likely to choose brand-name OTC medication. Some 51% prefer brand-name products in the personal care category such as shampoo and hair spray.
They alsocared much less about the brand of alcohol, makeup or skin care. Only 28% said they were more likely to choose skin care and makeup brand-name products during the pandemic, and just 29% cared about preferred alcohol brand names compared to less costly alternatives. Similarly, only 27% cared about brand names of liquor.