February 15, 2021
Consumer trends are always changing based on societal factors, the economy, product innovations and even marketing initiatives and influencer activity. But 2020 changed that dynamic as the coronavirus pandemic became the single largest influencer of consumer behavior. While COVID-19 will continue to shape purchasing habits for the foreseeable future, consumers in 2021 will increasingly focus on life post-COVID. According to market researcher Euromonitor, these consumer trends will focus on sustainability, outdoor recreation, safety, digital connections, and health.
Part of the big ESG (environmental, social and governance) movement that’s captivated investors the past few years, sustainability is a growing trend among eco-conscious consumers. As a result, major companies continue to make pledges to reduce or eliminate their carbon footprints. Recently, Anheuser-Busch InBev SA/NV (Tii:BUD) reported that it would spend nearly $100 million on sustainability projects, including solar-panel installments and water treatment. International Business Machines Corporation (Tii:IBM) said its sustainability efforts are focused on green procurement for their products as well as investing in smart building that uses fewer resources. Many other consumer brands have made similar declarations, with more to come.
This year will see more people engaged in outdoor activities – whether boating, fishing, camping, hiking or any of the other ways to enjoy the great outdoors. According to a report issued by the Outdoor Industry Association in 2020, only about half the U.S. population participated in outdoor recreation at least once in 2018. That number is expected to increase on the heels of COVID-related lockdowns and limited options for indoor activities.
Airbnb, Inc. (Tii:ABNB) released a report last month that highlighted how 2021 would see a shift toward more meaningful travel and out-of-home activity. The report portends good tidings for the vacation rental online marketplace. This uptick in outdoor adventures is also welcome news for companies like Wolverine World Wide, Inc. (Tii:WWW), a provider of active lifestyle, outdoor sport and athletic footwear and apparel.
As the coronavirus isn’t expected to go away immediately or completely, consumers will remain hyper-focused on cleanliness and safety – even once the pandemic is declared over. Contactless delivery, sanitation standards in brick-and-mortar stores and products that help maintain hygiene will see continued demand. This means retailers like The Kroger Co. (Tii:KR) will continue their strategy of offering low-cost delivery and high sanitation standards. In addition, Kroger Health, the supermarket chain’s healthcare division, announced it would provide the COVID-19 vaccine nationwide across its 2,200 pharmacies and 220 clinics.
On the commercial/industrial side, Tennant Company (Tii:TNC), a provider of cleaning products and solutions whose products include robotic and manual scrubbers, sweepers, carpet extractors and specialty cleaning equipment, is at the forefront of the safety/sanitation trend. Underscoring the company’s focus on commercial cleaning solutions, Tennant announced that it sold its non-core coatings business to The Sherwin-Williams Company (Tii:SHW).
Consumers today use an array of online platforms to safely communicate, conduct business, establish and maintain relationships – which is a reason Zoom Video Communications, Inc. (Tii:ZM) shares have climbed some 350% over the last 12 months. But even post-COVID, these tools should see significant demand, with e-commerce continuing to constitute a growing portion of sales for retailers.
The Census Bureau of the Department of Commerce estimated U.S. retail e-commerce sales for the third quarter of 2020 reached $209.5 billion, an increase of 37.1% from the third quarter of 2019. This bodes well not only for retailers with strong online presences but also e-commerce platforms and service providers such as Shopify Inc. (Tii:SHOP), BigCommerce Holdings, Inc. (Tii:BIGC), and Magento, which is owned by Adobe Inc. (Tii:ADBE).
Mental and physical health has played a large part in individuals’ lives throughout the year as the pandemic, job insecurity, a divisive political environment, lockdown-related isolation, and other factors weighed heavily upon American minds. These issues, combined with fewer in-person options for exercising the body and de-stressing, have led to a significant rise in demand for telehealth services.
This is expected to continue impacting the way consumers receive health-related services. Leading the way in this space is Teladoc Health, Inc. (Tii:TDOC), a provider of telemedicine services, including general medicine, mental health and dermatology. The current environment has resulted in increased demand for the company’s services to the tune of a 62% rise in revenues for the nine months ended September 30, 2020. Amwell (Tii:AMWL) is another telehealth provider reporting a significant increase in demand, with 78% higher revenues for the nine months ended September 30, 2020.
Whether these trends play out for some, most or all of 2021, shifts in consumer behavior will continue to demand that companies of all sizes remain flexible and able to adapt to meet these changes, remain relevant and drive sales.