Pent-Up Spenders, Status Quovians and the Pandemic-Shy will each require a tailored marketing approach
The U.S. has just finished a full year of the COVID-19 nightmare. The lockdowns, social distancing, Zoom meetings, remote schooling, mask mandates—and fights about all of the above—have achieved an unsettling veneer of normalcy.
And yet vaccinations are going up while infections and deaths are declining. A newer, better normal increasingly seems within reach.
What is a marketer to do? The advertising industry betting big on Spring being the new Christmas, with strong demand igniting a new “Roaring ’20s.” It’s a good bet—but one which needs to be placed smartly. Not all consumers are planning for the new normal in the same way, according to our surveys. While a plurality of Americans is poised to jump-start the economy—30% of households making at least $100,000 annually expect to spend more in the coming months—others are more cautious, with strong majorities anticipating no change.
Three distinct groups emerge from the data, each requiring a tailored approach. Call them Pent-Up Spenders, Status Quovians and the Pandemic-Shy. Here’s what you need to know about each group:
After a year of lockdown, this group is ready to get up and out. Demographically, they are likely to be millennials and/or those with robust incomes, which matches expectations. Higher-earning households have more disposable income, while young professionals are most likely to have a youthful social life and the spending money to enjoy it.
What will that look like? Millennials are most likely to drink or dine out as the weather warms, with 52% planning to do so, as compared to 45% of consumers generally. They’re also more likely to spend on personal entertainment (52% versus 37% overall). High-income households are likewise planning to go out—and are planning trips out of town more than others: 43% expect to travel more in the next year, compared to 33% of consumers generally.
In short, these groups are eager to make up for their lost year, so marketers should focus on them when pushing new and innovative products. (Note: High-income consumers most want ads for personal items to tell them how the things work.) These spenders will be the fuel that powers the “Roaring ’20s.”
This stay-the-course cohort is largely composed of Gen Xers (ages 41-56) and baby boomers (57-75) as well as those in the middle class ($50,000-$100,000 annual household income). Many got a taste for self-sufficiency while locked down—Gen Xers and those in the middle class, for example, were most likely to take up home repair or start working side hustles. Rather than spring back to an ante-pandemic normal, they are still digesting the lessons of a year at home.
So, pluralities of Gen Xers, boomers and middle-class Americans plan to spend the same amount this spring that they did a year ago, when the world was being turned upside down. Drilling down, they’re not likely to splurge when they do spend. Pluralities of all three groups expect to expend the same amounts on non-essential items such as toys, jewelry and electronics. When they dine out, it’s most likely to be fast-casual and fast-food restaurants.
They are especially interested in knowing that a product will last and when they do spend, especially the upper middle class, it is likely to be on gifts for friends. And boomers are more likely to spend on experiences—dining out or traveling—than on products such as electronics.
This older cohort is a bit more conservative with their pocketbooks, so advertisers should emphasize durability and discounts—these consumers are looking for good deals and products they won’t have to quickly replace. Also, stick to the basics with them as they’re not inclined to get adventurous in their shopping.
Lower-income households remain the most reserved. They are less likely than others to say that they expect to travel out of town or go to concerts, movies or restaurants—and in each case pluralities in households making $50,000 or less annually said that they expect to spend less in the coming year than in the last 12 months.
No wonder: This cohort has been hit hardest by the pandemic, both economically and in terms of health outcomes. With unemployment still over 6%, it’s little surprise that they are the most gun-shy. They’re going to need more time to feel comfortable opening their wallets again. For advertisers, that means less emphasis on new products and more on engaging content, whether informational or just entertaining. The thing they’re most interested in in advertising is access: Knowing where they can get the products they want.
Remember, though, that hesitance is not the same thing as bearishness. If, for example, President Biden’s economic plan boosts the economy, or at least convinces consumers that it is stable, people might be more willing to open their wallets. Ditto if the increasing prevalence of vaccinations instills new confidence that we are really putting the pandemic behind us.
Good news can compound—and if it does, the roar of the ’20s may echo through every group of consumers.