The COVID-19 crisis is being defined by four distinct consumer behavior segments, according to the first edition of the EY Future Consumer Index, a survey of 4,859 people tracking consumer sentiment and behavior across the US, Canada, the UK, France and Germany.
These are “Cut deep,” “Stay calm, carry on,” “Save and stockpile” and “Hibernate and spend”.
Consumers that fall into the “Cut deep” segment (27.3%) are spending less across all expense categories as the pandemic impacts employment; others representing the “Stay calm, carry on” category are continuing to spend as normal (26.2%).
Most consumers (35.1%) represent the “Save and stockpile” segment, indicating that they feel pessimistic about the future, while consumers that fall into the “Hibernate and spend” segment (11.4%) are spending more across the board.
Cut deep
These consumers are mainly more than 45 years old and have seen the biggest impact on their employment status. Almost a quarter have seen their jobs suspended, either temporarily or permanently. Seventy-eight percent of them are shopping less frequently, while 64% are only buying essentials. Thirty-three percent feel that brands are far less important to them in the current climate.
Stay calm, carry on
These consumers do not feel directly impacted by the pandemic and are not changing their spending habits. Just 21% of them are spending more on groceries, compared with 18% that are spending less.
Save and stockpile
This segment shows particular concern for their families and the long-term outlook. More than a third (36%) are now spending more on groceries, while most are spending less on clothing (72%) and leisure (85%).
Hibernate and spend
Primarily aged 18-44, these consumers are most concerned about the impact of the pandemic. However, only 40% of this segment say they are shopping less frequently. And while 42% say the products they buy have changed significantly, 46% of them say brands are now more important to them.
Five new segments may emerge as consumers move beyond the pandemic
The four segments identified could morph into five very different ones as the crisis abates. For example, the Index currently suggests that over time, most consumers in the “Save and stockpile” segment will migrate to two new segments: “Remain frugal” and “Cautiously extravagant.”
These new consumer segments, detailed in the Index, could emerge post-COVID-19 and be summarized as: “Keep cutting” (13.1%), “Stay frugal” (21.7%), “Get to normal” (31.4%), “Cautiously extravagant” (24.7%) and “Back with a bang” (9.1%).
