According to new research, as consumers adjust to the changes sparked by the spread of COVID-19, some are clamping down on their wallets and putting off major purchases.
Concerns about the novel coronavirus and its resulting illness COVID-19 have grown over time, according to two surveys conducted by SFW, a company that helps businesses with branding. Approximately 1,586 consumers took part in the surveys, taken one week apart. The first survey of 616 consumers took place March 6 and the second survey of 970 consumers occurred on March 13.
The surveys made one thing evident: A lot can happen in a week. During the seven days that took place between surveys, consumers became more aware of the respiratory disease and some began to see an impact on their lives. The percentage of respondents who said they were familiar with COVID-19 and the risks it posed increased from 64% to 80% during that time frame. Likewise, more than twice as many consumers (37%) said they had been impacted by the spread of COVID-19 by March 13 than had been impacted the week before (16%).
Growing economic concerns
When it comes to COVID-19, consumers aren’t just worried about their health; many are also becoming increasingly concerned about how disruptions caused by the disease could affect their wallets. For example, some hourly employees are seeing reduced hours while other workers may be facing job losses altogether.
By the time the second survey was taken, 43% of respondents believed their household income would be negatively impacted by the coronavirus crisis. That percentage was 70% higher than the 26% who were concerned about the effect on their household income the week before.
One way consumers may be handling their financial concerns is by curtailing their spending. The surveys showed a drop in the percentage of consumers planning major purchases this year. Home buying and home improvement services, in particular, took a hit.
- Among those planning to buy a new house in 2020, the percentage who said they were still moving forward dropped from 67% to 41% over the course of the week.
- Among those planning to make major home improvements this year, the percentage planning to move forward dropped from 49% to 35%.
- Among those planning to buy new home furnishings, the percentage planning to move forward dropped from 51% to 35%.
Car manufacturers and dealerships could also take an economic hit as a number of survey respondents also put their auto buying plans on hold. Among respondents planning to buy a car this year, the percentage who said they were likely to move forward dropped from 49% to 36% over the week-long period between surveys.
During times of uncertainty, it makes sense to curb spending particularly if you believe your income may be at risk. In addition to postponing major purchases, you may want to take a look at your daily budget and see if there are some small expenses you can cut. By being proactive today, you may find that you are in a better position than you thought later in the year and you may be able to move forward with your larger purchases after all.