NEW YORK — Correlating COVID-19 news events, such as public health announcements and government press conferences, lead way to identifying six key consumer behavior threshold levels.
In the eight weeks since China confirmed its first case of COVID-19 and the outbreak began to spread globally, Nielsen recorded record-breaking sales of health-safety products, as well as a ripple effect triggering broader consumer purchase behaviors.
The six threshold levels, based on early indicators across markets (though at different times as the virus outbreak evolves at different rates in different geographies), are:
No. 1: Proactive Health-Minded Buying
- Consumer behavior shifts: Interest rises in products that support overall maintenance of health and wellness
- COVID-19 event markers: Minimal localized cases of COVID-19 generally linked to an arrival of another infected country
No. 2: Reactive Health Management
- Consumer behavior shifts: Prioritize products essential to virus containment, health and public safety (e.g., face masks)
- COVID-19 event markers: First local transmission with no link to other location and first COVID-19-related death(s)
No. 3: Pantry Preparation
- Consumer behavior shifts: Pantry stockpiling of shelf-stable foods and a broader assortment of health-safety products; spike in store visits; growing basket sizes
- COVID-19 event markers: Multiple cases of local transmission and multiple deaths linked to COVID-19
No. 4: Quarantined Living Preparation
- Consumer behavior shifts: Increased online shopping, a decline in store visits, rising out-of-stocks, strains on the supply chain
- COVID-19 event markers: Localized COVID-19 emergency actions; percentage of people diagnosed continues to increase
No. 5: Restricted Living
- Consumer behavior shifts: Severely restricted shopping trips, online fulfillment is limited, price concerns rise as limited stock availability impacts pricing in some cases
- COVID-19 event markers: Communities ordered into lockdown
No. 6: Living a New Normal
- Consumer behavior shifts: People return to daily routines (work, school, etc.) but operate with a renewed cautiousness about health; permanent shifts in supply chain, the use of e-commerce and hygiene practices
- COVID-19 event markers: COVID-19 quarantines lift beyond region/country’s most-affected hotspots and life starts to return to normal
Threshold levels Nos. 1 through 4 are beginning to show predictable signs of spending from consumers. In other words, depending on what stage any particular country is in, there are signs that spending behaves in a common way that may make it possible to understand what might happen next, country to country, according to Nielsen.
The world is largely past the first stage of proactive health-minded buying that drove only minor changes to sales patterns. However, at threshold No. 2 (Reactive Health Management), consumers in affected markets began stocking up on essential health-safety products, such as hand sanitizers and masks.
As news reports detailed the continued and quick spread of the virus around the world, consumers in many countries jumped to threshold No. 3 (Pantry Preparation). By this stage, they begin developing stockpiles of food and emergency supplies. These spending spikes lessened in the weeks after the panicked moments but spiked on subsequent news events or developments.
A Nielsen study of the U.S. market highlights how quickly consumers can digest and process new outbreak information and then make spending decisions tied to that news. These behaviors make it possible to understand early indicators of consumer actions, which can help companies manage their supply chain in response to news cycles, Nielsen said.
"As patterns begin to emerge in response to news events of this nature, it will be imperative for companies to learn from these scenarios so they can sustain growth even in times where COVID-19 has uprooted people’s lives," said Scott McKenzie, Nielsen Global Intelligence leader. "These patterns will help provide leading and trailing indicators to those trying to understand how people will respond as developments continue to play out at different times in different countries."
For more on how the news cycle impacts consumer sentiment and spending, click here.