The touchless economy may be the greatest cultural shift after weeks or months of self-quarantining. But all those hours working from home and wiled away on social media, streaming, gaming and binge watching may solidify online trends that were already gaining traction, according to consumer behavior specialists.
Although the coronavirus pandemic is far from over, recent updates and governmental briefings hint at glimmers of stabilization. However, with the threat of COVID-19 returning or other viruses mutating, consumers are not expected to bounce back to their well-worn routines.
After weeks of self-isolation, many consumers around the globe are tethered to smartphones and social media more than ever as a result of stay at home, shelter in place and work from home mandates in many of the 195 countries. And they were starting from a substantial base. The average adult in the U.S., for example, spent three hours and 43 minutes on mobile devices last year — about eight minutes more than the 3:35 spent on TV, according to an eMarketer survey.
A team of researchers at McGovern Institute for Brain Research at the Massachusetts of Institute of Technology recently explored how people who are forced to be isolated crave social interaction in the same way a hungry person craves food. Academics aren’t the only ones wondering about that. Industry observers are anticipating to what extent the amped-up social media dependency, adeptness for social distancing and consumers’ knack for videoconferencing for social and business purposes will last after the pandemic eases up.
With consumer spending accounting for 73 percent of the U.S. economy, substantial behavioral changes could dent an already challenged financial landscape.
Jim Nail, a principal analyst on Forrester’s B2C marketing team, pointed to touchless transactions, in-person fashion shows with digital components, and videoconference family reunions as potential long lasting takeaways from the COVID-19 crisis. Indisputably, the ways we socialize, shop and interact will change to some extent, but from his standpoint in-person exchanges are irreplaceable.
“I don’t expect human beings — as long as we are still in bodily form and do not have chips embedded in our brains — to give up face-to-face contact entirely,” he said. “But we’re being forced to learn that there are a lot of things that you can do virtually. Even if they are not as good as an in-person event, we’re learning tips and tricks to make them better — and better than we thought they would be.”
Meeting in-person with employees or clients is generally preferential whenever possible, with phone calls being the back-up. But as many have been forced to learn in recent weeks, videoconferencing is better than a phone call, Nail said.
Going forward, fashion shows, industry conferences and other events may add virtual components in addition to the physical ones to broaden the base and create a new revenue stream, according to Nail.
But the hidden value of such occasions comes down to serendipity, he said. “At all of those events, a lot of the most productive stuff — doing business deals and making new business relationships — happens along the side. It’s the cocktails and the dinners that you have with people — not necessarily the runway show itself or the other presentations. You can’t plan for such things to happen. You can’t know when something you see or overhear, or a stray comment that someone makes may spark a whole new idea in your head. That’s the kind of thing that we only have face-to-face,” he said.
Human beings aren’t about to ever give up those kinds of interactions, while still welcoming an online audience. Nail said, “The physical events will survive and thrive because we do need that. But they can also thrive by not only limiting the event to those who can afford to take time off from their jobs and fly to the location to spend a couple of days or a week.”
Acknowledging how places like South Korea and China have had recurrences of COVID-19 after they were supposedly past their respective peaks of reported cases, Nail expects consumers’ increased concern for good hygiene and safety in public places to lead to a reliance on other technologies. Automated voice interfaces like Siri and Alexa and contactless payments with mobile phones will gain more traction. Waving your mobile phone by a reader to transfer the credit card information will be more appealing to people than handing over a credit card or punching in codes on dirty keypads or ATMs, Nail said.
Luca Solca, senior research analyst, global luxury goods for Sanford C. Bernstein Ltd., said consumers may hold onto their newly acquired digital capabilities and habits, especially if the return to normal is still fraught with a risk of COVID-19 infection. “Things would maybe look different if we had a vaccine or a therapy that brings COVID-19 to the challenges mankind has resolved,” he said.
Either way, consumers have discovered that a number of things that they were doing the old way can now be done differently, said Solca, noting how he and his wife have stopped going to the grocery store and the post office, since such necessities like food and stamps can be purchased online. “Not to mention the many different platforms I have learned to use to have video conferences,” he said.
In terms of luxury goods, Solca expects a significant step up in digital distribution, moving on average from the low double-digits to the mid-teens rather quickly.
With Gap, L Brands, Macy’s, Saks Fifth Avenue, PVH Corp., VF Corp., Capri Holdings, Ralph Lauren Corp. and others furloughing or laying off employees, retailers will have the added challenge of getting shoppers back in stores, especially those who are concerned about the health risks of being in public places. “I anticipate it will be difficult to generate traffic to stores. This was already an issue,” Solca said. “Integrating digital and physical distribution will be more and more important — vital, I would say.”
The digital-focused outlook also will carry over into other areas. “I believe many people will decide to change their habits for good — and make the most of remote work technology. It has been there for a while, but it is certainly underutilized,” he said.
Consumers are increasingly accustomed to a plethora of choices, as the 300-plus video streaming subscription services indicate. Laurie Santos, director of Yale University’s Comparative Cognition Laboratory, is counting on people to continue to make use of technology to connect with one another in as many ways as possible. To that point, she is using technology to have dinner dates and movie nights with friends in different time zones, virtual yoga classes with workout buddies, and spa nights with friends whom she hasn’t seen in a long time. “I’m hoping that some of these social habits will stick after this crisis is over. The science suggests that many people normally feel lonely, so my hope is that we can use some of these novel means of connecting to continue being social after the crisis,” Santos said.
The average person checked their smartphone 58 times a day — and that was before the pandemic, according to a survey by RescueTime, which has apps for Android and iOS to track screen time. While more people around the globe are keeping their eyes on smartphones, tablets and other screens, Santos, like Forrester’s Nail, expects people to wind up valuing going to fashion shows, stores, events, museums and galleries. “Personally, I can’t wait to get back to my favorite coffee shop or to sit in a crowded movie theater again. I think our time of forced isolation will allow us to savor these activities that many took for granted before,” Santos said.
Nor does she expect people to crave more social media versus human contact post-COVID-19. To that end, Santos cited the recent findings from the McGovern Institute for Brain Research at MIT that indicated we crave person-to-person contact when we don’t get it. “I think we’re going to want to be together more often after such a long period of social distancing,” Santos said.
The aforementioned researchers concluded their study with a vital question for future research — how much and what kinds of positive social interactions are sufficient to fulfill the basic need and eliminate the neural craving response.