Covid-19 has shaken our ability to move around freely, has inhibited our access to public places, and has illuminated how fragile supply chains can really be. While the economy has been hit hard, and many individuals are suffering financially, many still have money to spend. As things begin to open up, Americans are realizing that many experiences that we used to take for granted will be harder to access—creating a new level of exclusivity and a ‘New Premium’ category of experiences and products that they’re willing to pay more to get.
Roughly 3 in 5 American households (59%) expect their income to be unchanged or higher in 2020 vs. 2019. There is considerable pent-up demand for ‘revenge spending’ once things return to normal; people are looking forward to traveling (27%), buying household goods (18%), and going to live events (17%), among other things. The requirements to make these things available, allowed, and accessible in a safe manner may be extensive, and is likely to make things cost more; in the new normal, three in four Americans (74%) are willing to pony up.
Younger Americans (age 18 to 44), those earning more than $100k, and men are the most willing to pay more.
Willingness to pay for ‘New Premium’ experiences (including private or socially-distanced restaurant experiences, private or limited-capacity events, private access to public spaces, socially-distanced travel experiences) is higher than willingness to pay for ‘New Premium’ products (such as hard-to-find or luxury personal items).
Americans are really itching to go to restaurants again—three-in-five are willing to pay more for either a socially-distanced or private in-restaurant dining experience.
And Private Access may represent the crème de la crème for the ‘New Premium’ category—more than half of all Americans, regardless of income, say they are willing to pay a premium for private restaurant dining, private events (e.g., a concert in your yard, or a movie theater that you rent out), or private access to a previously public place ((e.g., rent out a whole park, or beach, or trail for a day).
Takeaway: If your company is part of (or serves) an industry that may not return to ‘normal’ for a long time (think restaurants, travel, events), how can you evolve to play in this ‘New Premium’ market? Will these buyers look like old ‘premium’ buyers, or will they look different?
Contact us for a consultation or more information from this study.