Deloitte: Consumer Convenience Rules, but Financial Concerns Dampen Spending Habits in the US has been saved
Deloitte: Consumer Convenience Rules, but Financial Concerns Dampen Spending Habits in the US
Demand for leisure travel picks up in time for the holiday season
New York, November 16, 2020
- Safety perceptions show positive momentum with 61% of adults saying they “feel safe” going to the store, up from a low of 30% in April.
- Following a post-summer slide, demand for leisure travel picks up in time for the holiday season, with improvements in consumer appetite for travel.
- However, 29% of all survey respondents noted that they were struggling to make upcoming payments; this number surged to 46% among adults 18-34.
- Contactless buy online pick-up in store (BOPIS) is rapidly accelerating as consumers see it as a cheaper alternative to traditional delivery (36%), faster than in-store shopping (34%) and a safer alternative (32%).
Why this matters
As a global health crisis has morphed into an economic one, Deloitte is conducting a series of monthly surveys around the globe to better understand the interplay between personal safety and economic vulnerability as a driver of purchase decisions and consumer behavior. The most recent iteration (fielded Oct. 29 – Nov. 5) of “Deloitte’s Global State of the Consumer Tracker,” conducted in 18 countries, queried at least 1,000 consumers in each country. The responses provide insight into how consumers across the globe intend to weather this dual crisis.
Safety perceptions slowly improve, but financial uncertainty persists in the U.S.
While consumer safety perceptions are slowly improving, financial stress continues to be an increasing area of concern for consumers in the U.S., as the last round of economic relief expired.
- Twenty-nine percent of U.S. respondents noted they were struggling to make upcoming payments.
- Adding to concerns regarding meeting future financial obligations, 61% of U.S. respondents indicated spending the same, or more than their current income.
- For those under the age of 54, financial concerns are further exacerbated with 39% of Americans citing concern about their credit card balances, and 42% worried about how much money they have in their savings.
- On a more positive note, from April 9 through Nov. 5, sentiment more than doubled from 30% to 61% for consumers who say they feel safe visiting a store. Additionally, 27% of U.S. respondents said they would feel safe attending school in-person, and slightly less than half (49%) noted they would feel safe returning to their workplace.
As we saw earlier this year, health concerns and spending are closely intertwined. Consumers are beginning to feel more comfortable with resuming some activities of pre-pandemic life despite a third wave rising in the U.S. With the expiration of stimulus funding and continued unemployment levels, financial concerns are on the rise. Overall discretionary consumer spending is also likely to be restrained. Increasingly, the average consumer will be looking to contactless commerce, convenience and bargains throughout the remainder of 2020.
—Stephen Rogers, executive director, Deloitte Insights Consumer Industry Center, Deloitte LLP
Consumers shifting spending intentions as they reprioritize budgets
While essential spending remains largely unchanged, consumers’ forward-looking discretionary spending on items like restaurants, clothing and travel is changing.
- Forty-one percent of respondents are willing to pay for convenience to get the things they need, a figure that has remained consistent since early April. Protecting health (45%) outranked saving time (42%) and reducing stress (33%) as the main drivers of convenience spending.
- Similarly, as consumers continue to trim their budgets, 29% are planning to scale back on clothing purchases and 29% of respondents plan to spend less on restaurants over the next four weeks.
- As U.S. consumers look to cut back on major discretionary purchases, the percentage of U.S. vehicle owners planning to keep their current vehicle longer than originally planned has remained steady at around 50% since April.
- Contactless buy online pick-up in store (BOPIS) is rapidly accelerating as consumers see it as faster than in-store shopping (34%) and a safer alternative (32%).
- Plus, as consumers are extremely budget conscious, 36% of those surveyed said they use the BOPIS service because it is cheaper than delivery.
Leisure travel taking off again as the holidays approach
With the holidays just around the corner, perceptions of travel safety showed improvement, particularly around hospitality and air travel. Contrary to data which shows consumers continuing to deprioritize non-essential spending, leisure travel seems to be an exception.
- Following a post-summer slide, demand for leisure travel over the next three months is picking up in advance of the holiday season. Nearly one-quarter (24%) now plan on taking a domestic flight, 21% plan on renting a car, and 13% plan on taking an international flight.
- One-third (33%) of U.S. respondents said they would feel safe flying again, regardless of the destination – up from 23% on April 9.
- Forty-five percent of U.S. travelers report feeling safe staying in a hotel, a pandemic high, up from 19% on April 9.
- Of those respondents not planning to stay in a hotel for leisure within the next three months, 15% think hotels are not doing enough to make them feel comfortable staying overnight.
- In fact, 29% of respondents report they are planning to put off vacation plans until the pandemic situation improves.
- Financial constraints are still hindering leisure travel, with 17% of respondents reporting that the pandemic has made travel difficult to afford.
Months of weathering a global pandemic are taking their toll on the actual and perceived financial health of many Americans. Six in 10 Americans say they’re spending the same, or more than their current income. These concerns have obvious implications for retailers, restaurants, hoteliers, airlines, and a host of other consumer-oriented businesses. As we look at a recovery, there are signs of pent up demand, and it’s important that consumers continue to feel safe, if we are to return to a semblance of normalcy.
—Anthony Waelter, U.S. consumer industry leader, and partner in the advisory practice of Deloitte & Touche LLP
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