To Buy or Not to Buy?
Erie-based AcousticSheep, others study how COVID is influencing online purchases
How closely is consumer confidence linked to COVID-19 case counts?
According to a survey by the performance marketing company Merkle, 77 percent of respondents indicated that they would not be shopping til they drop this holiday season, with plans to carry their pandemic-adjusted spending habits through the new year. But that's not to say they wouldn't spend at all.
Another survey by the international business auditing, consulting, and advisory group Deloitte examined the intentions of U.S. consumers going into the holiday shopping season's opening salvo — Thanksgiving evening through Cyber Monday, aka the "Cyber Five." Nearly all of the respondents said they would be making a purchase, but there was a significant discrepancy as to where — 95 percent said online versus 77 percent in-store. Unsurprisingly, the majority (47 percent) responded that lower prices and better deals would create a better shopping experience, whereas 23 percent were most concerned with COVID-19 safety protocols.
Online shopping virtually eliminates transmission worries — the Centers for Disease Control (CDC) and World Health Organization (WHO) both say the chances of the SARS-CoV2 virus surviving a package's journey through an entire supply chain is minimal. E-commerce's share of the retail market had been trending upward before the pandemic, but its onset accelerated those trends. By year's end, it is projected to comprise nearly 15 percent of all U.S. retail sales and account for upwards of $795 billion in consumer spending.
What's driven that upsurge, though, has largely been essential items — groceries and home goods — along with services that make them easier to obtain (e.g., Instacart). The Common Thread Collective, a "digital growth agency," broke down e-commerce sales by vertical and discovered the following:
- Up significantly: medical, baby products, cleaning, food and beverage, home office, health and wellness, toys and games
- Up moderately: pet supplies, household, beauty, outdoor, electronics, sports and fitness
- Down moderately: jewelry and luxury, fashion and apparel
- Down significantly: automotive, travel
What we're buying more of at any given time provides pretty good insight into our collective psychology, and harkens back to Maszlow's Hierarchy of Needs — faced with a pandemic, what we've bought the most of corresponds directly with our fundamental physiological and safety needs. Meanwhile, jewelry, fashion, and travel correlate more with status and esteem — and have clearly become a lower priority for most consumers, at least online.
One product that falls in the middle is AcousticSheep's SleepPhones. The Erie-based company ships the soft, headphone-containing headbands all over the world — in fact, it was named an EXIM Exporter of the Year earlier in 2020. Co-founder and co-inventor Dr. Wei Shin Lai, whose educational background is in research and epidemiology, was interested to see how SleepPhones sold in countries where COVID-19 caseloads were higher versus countries where they were lower, measuring website visits and conversions from April through September. Only the 30 most profitable countries were analyzed (read her takeaways here).
Sure enough, countries with fewer cases bought on average 40 percent more SleepPhones, while those with more bought 13 percent less. Countries with higher testing rates and lower positivity and death rates are also more apt to purchase their product (featured in this year's Made in Erie Gift Guide); the opposite was true when the situation was reversed. Why though? Wouldn't a more desperate environment create more sleepless nights and a greater demand for SleepPhones?
Admitting that correlation does not equal causation but also intrigued by the results, Dr. Lai offered a few theories. Her best was simply this — the more countries had COVID under control, the more willing citizens seemed to part with discretionary income. And while SleepPhones do assist with a basic physiological need (a full night's sleep), they cannot be called "essential" to it. On average, though, e-commerce figures remained strong worldwide.
For the record, the United States — which as we know has been one of the most out-of-control countries in terms of COVID-19 numbers — showed a modest increase in interest. How things are bought and sold will inevitably continue to evolve long after the pandemic. It's clear, however, that e-commerce is retail's future.
Erie-based companies having the wherewithal to innovate and participate in that future? One less thing for us to lose sleep over.
Matt Swanseger can be reached at firstname.lastname@example.org