- A majority of consumers have faced some kind of hardship resulting from the spread of COVID-19, including reduced income (19%), fewer work hours (18%), a temporarily closed (14%) or permanently shuttered (9%) employer, layoffs (12%), furloughs (9%) and career change prompted by COVID-19 (3%), according to survey results from PwC.
- Just 49% of those surveyed experienced none of those effects. And while 95% of business leaders say that some sort of fiscal policy is needed to support consumer demand, little progress has been made in stimulus talks at the federal level.
- PwC also reports that a majority of consumers (55%) said COVID-19 is their top concern around holiday shopping, with 65% saying they are most concerned about catching the virus. As they shift their shopping behavior, 61% said they plan to do most of their shopping online, according to PwC.
PwC's survey data adds detail and nuance to an obvious reality facing the industry this year: The 2020 holiday season will be unlike any before it and will be shaped by the pandemic.
The sheer number of people whose financial and economic lives have been touched by COVID-19 is a portent for overall sales, for which analysts have struggled to write predictions.
Deloitte, for one, tried to account for the numerous wild cards by splitting the difference, pointing to a "K-shaped" scenario, where sales are either flat or grow modestly depending on several factors, including whether federal aid renews and the trajectory of COVID's spread. Analysts also expect the season to begin earlier and last longer, with AlixPartners calling the traditional, November-December holiday shopping period "meaningless" this year.
What does seem relatively certain is that online will play a major role in shopping this year as consumers try to reduce their risk of exposure to the coronavirus.
Retailers are rushing to meet consumers where they want to be, with several big-name companies targeting Black Friday-like online discounting for mid-October. They are led by Amazon, which late last month announced it would hold Prime Day on Oct. 13-14. Target, Walmart and Best Buy soon followed with their own announced events.
E-commerce isn't the only area where shoppers are changing their habits this year. According to PwC, 60% of shoppers reported they planned to do more targeted shopping at fewer stores this year.
That bodes well for generalists like Target, Walmart and Costco, but could hurt smaller specialty retailers. However, 46% plan to shop local and independent stores, which in many areas are in dire need of business after the spring COVID-19 closures.