Cathy Taylor, WARC’s US Commissioning Editor, introduces the latest installment in WARC’s Spotlight US series, which offers insight into US consumer behavior during an uncertain year shaped by COVID-19 and economic challenges.
This article is part of the September 2021 Spotlight US series, "How consumers are wrestling with 2021's uncertainties."
A complex recovery is taking shape
When the COVID-19 pandemic began putting constraints on daily life around 18 months ago, it would have been hard to imagine where Americans find themselves now, which is neither here nor there.
The good news is that, in many ways, the economy is back open for business. Most Americans are traveling again, most children are back in school in-person, and sports events are well-attended.
But beneath those positive developments is a patchwork of rules, restrictions and experiences related to COVID-19 that have made for a much more uneven economic recovery than many thought would happen when mass vaccinations began to happen last spring.
Stubbornly high levels of vaccine refusal and hesitancy – some 25% of those eligible have not yet gotten the jab – and the rise of the Delta variant has added yet another dimension in making America a country with pronounced regional differences. While we are, in large part, getting on with life, neither are we free from COVID – but the degree to which that applies varies wildly depending on where you live.
Some data: In Alaska, the state that currently has the highest rate of infection as of September 22 (per The New York Times) citizens are “strongly encouraged” to wear masks in public. More than 3,300 miles away in Connecticut, which has the lowest infection rate, anyone unvaccinated over the age of two years old is required to wear a mask in indoor public spaces. Alaska’s infection rate is more than six times that of Connecticut’s, and its vaccination rate is 49%. Connecticut’s is 68%.
Going down to the local level, mask mandates in schools have often led to legal skirmishes between local school districts and state authorities. Whether you need proof of vaccination to attend an NFL game also depends on which stadium you are visiting.
The link between voting, vaccine hesitancy and shopping behavior
All of this makes it difficult to paint a picture of the American consumer in this stage of the pandemic with easy brushstrokes. But while that task has probably long been a fool’s errand anyway, there is one clear line of demarcation right now that is somewhat of a determinant on shopping behavior – and that’s how different states voted in the past presidential election.
Stay with me on this a moment – it’s not for the reasons you might assume. Partly because of susceptibility to misinformation, Republicans are far more vaccine hesitant than Democrats, and, unfortunately, that means states that voted Republican in 2020 almost uniformly have higher infection rates. In fact, per the latest data from the Times, of the 25 states with the highest rates of infection, 22 voted Republican in the last election.
While none of this Spotlight’s authors dove into politics, higher rates of infection have knock-on effects that many brands need to pay attention to. According to an article by Barbara Connors, vp/commercial insights at 84.51° – a retail data science, insights and media company owned by retail giant Kroger, infection rates have resulted in differences in shopping behavior in grocery stores.
As she notes, “The six states that saw an increase in their rate of e-commerce usage in June and July – Mississippi, Arkansas, Louisiana, Montana, Nevada and Missouri – were all in the bottom half when it came to vaccination rates at that time.” The reverse held true for states with high vaccination adoption, too.
Leslie Wood, chief research officer at insights provider NCSolutions, notes in her Spotlight article that the difference is slight, but definitely there, when considering spending in the consumer packaged goods (CPG) category: “In the New England and Mid-Atlantic regions – where we see lower case counts – average household spending on CPG was relatively flat to negative throughout the summer, even while the rest of the country continued to trend upward, with average household CPG spending up 2% from June through September 4.”
New retail behaviors, and some other trends, could be here to stay
The Spotlight also shows that people across the country at large are settling into some fairly consistent new behaviors:
Americans are increasingly hybrid shoppers, making use of all the retail variations that popped up with COVID-19. “E-commerce, delivery, pick-up, in-store – it’s all part of how Americans shop now, and that means brands have to respond,” argues Connors.
“Switching easily between in-store aisles and e-baskets, this new hybrid shopper demands retailers and brands meet them where they are.
Americans are traveling, but staying closer to home. Research in this article by Will Crocker Hay, vp/customer and partner marketing at customer engagement platform Braze, demonstrated that even though Americans were the most travel-ready residents of any country it studied this year, their preferences have changed, at least temporarily.
He writes, “Even before the Delta variant upended the timeline for full economic recovery, Americans were preferring short domestic trips to international jaunts.”
Location targeting needs to find new techniques. In this article, Jesse Rosenschein, svp/integrated investment at media agency Mediassociates, discusses how out-of-home and location targeting took a hit at the beginning of the pandemic, but consumers – and marketers – have re-entered into a changed world of targeting because of privacy concerns.
“This is no small issue,” she writes. “Mobile is now the king of media, with consumers spending more time on handsets and tablets each day than they do watching TV … marketers need to reach people on mobile, and typically location targeting has been a core strategy.”
The pandemic has been the perfect time for the rise of challenger brands. Challenger brands thrive in unsettled environments because of their ability to handle disruption, so many have found their footing during the pandemic.
And 45% of US consumers have tried a new brand during the pandemic, according to data from research firm Reach3 Insights. In his article, Matt Kleinschmit, Reach3’s founder/CEO, points out, “COVID forced people into their homes, and in many ways pushed people online, giving them an opportunity to explore new products, brands and services.”
Trends besides e-commerce – including the search for wellbeing and creator culture – have been accelerated by the pandemic. An analysis by Twitter, the social network, of billions of US tweets before and during the pandemic revealed just how many trends took on new velocity as the pandemic unfolded.
For instance, Twitter reported it has seen a 32% increase in conversations around career creators. “We see so many more people are just trying their hand at creator life,” said Lisa Cowie, a senior research manager at Twitter, when laying out the findings from its analysis.
In keeping with the hybrid shopping trend, retail and digital are increasingly coming together. The US kombucha manufacturer Health-Ade has seen interest in its brand grow because it taps into the wellbeing trend. But the pandemic has also hastened the need for it to engage with its consumers in different ways, including an increase in digital investment, and activations that combine virtual and in-person.
Said Shray Joshi, Health-Ade’s head/digital and growth, “You're starting to see retailers bring a digital experience into their actual retail accounts. And so, for us, that's something that we're going to be heavily leaning into: this in-person digital marketing,”
As the articles in this edition of Spotlight US illustrate, in terms of shopping behavior, the new normal may already be with us, but so – still – is COVID-19.
Read more articles from the Spotlight US series, "How consumers are wrestling with 2021's uncertainties."
Four ways to reach out-and-about US consumers in a pandemic and privacy-changed world
2021 Pandemic Brand Playbook: Decoding (and leveraging) the “disruptor” gene of challenger brands