New research warns drop in consumer spending to continue post-lockdown

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The hit to consumer spending caused by the Coronavirus pandemic is set to continue post-lockdown – as new research reveals over a third (34%) of shoppers predict they will spend less once restrictions are lifted.

The research comes as figures from the BRC-KPMG retail sales monitor reveal sales fell 19.1% in April compared with 2019. Economic uncertainty and the effects of temporary closures have caused shoppers to be more mindful of where and how they will spend their money in the future – with nearly a quarter (24%) agreeing they will only buy what they need, and a further 29% that they will only purchase from brands they trust.

A further 30% report to being unlikely to visit non-essential shops and leisure facilities, such as bars and restaurants, even once restrictions are lifted – a trend particularly prevalent in those over 55, with two-thirds (65%) unlikely to return. For those who do visit, reasons for doing so will also shift – with having an experience (25%) or making a day trip with friends and family (26%) more prevalent than simple transactions.

Commenting on the figures Jo Causon, CEO at The Institute of Customer Service, said: “It is becoming clear that the seismic impact of this crisis may have a permanent effect on consumer behaviour, if businesses don’t react now to safeguard their future. This means taking the time to understand the shifting needs of their customer base and adapting to meet them.

“Customers have been forced to reassess what they class as essential, and many have learnt to live without what was once deemed as pivotal to our way of life. Businesses need not only to review their product offering, but also look at how they engage with customers – focusing on the customer experience in order to provide a worthwhile reason to visit, and keep visiting.”

Businesses will have to keep a keen focus on following government advice around health and safety to regain footfall, as 71% of consumers say they are more likely to visit outlets where advice is being clearly followed, and over a quarter (26%) believing it is the primarily responsibility of organisations to ensure guidelines are adhered to on their premises.

Just under half (49%) completely agree that customer facing staff must have the necessary equipment to protect themselves and 47% that organisations should prioritise the health and safety of their employees, even if that compromises the speed of service that they can deliver to their customers.  

Causon continues: “This demonstrates that customers aren’t just looking for a transactional experience. They want to see that businesses care about the safety and wellbeing of the people who are serving and engaging with them.  Where organisations demonstrate this, they will be rewarded with greater loyalty.

“Customers have been reminded that they cannot have everything instantly, and many are now placing a higher value on making a greater connection with the organisations   who are serving them,, with a stronger focus on advice, support and authenticity.”