- Tamara Charm is a senior expert at McKinsey & Company and the co-lead for its Global Consumer Sentiment Survey.
- McKinsey launched the Global Consumer Sentiment Survey in mid-March across 40 countries to better understand how consumer sentiment and behavior were shifting, overall.
- The survey explores consumer sentiments in the age of COVID-19 including level of optimism, expected spend, expected income, new behaviors, and what consumers plan to do moving forward.
- Preliminary findings reveal that, as the progression of the pandemic moves through the globe, consumer sentiment is starting to waver.
- Nearly half of US respondents indicated they plan to cut back on spending and are being careful about how they spend their money.
- Globally, McKinsey’s research reveals consumers are cutting back on discretionary spending across all consumer categories, except for groceries and in-home entertainment.
- The hardest hit industries — based on intent to spend — were travel and entertainment (except for in-home entertainment).
- McKinsey found that nearly every work and leisure-related activity will see increased digital activity.
- Depending on the category, 40 to 60% of consumers indicated that they intend to stick to new digital products and services adopted during COVID.
Tamara Charm is a Senior Expert at McKinsey & Company and the co-lead for its Global Consumer Sentiment Survey. She recently gave a Peer Network briefing, in collaboration with ClickZ and Search Engine Watch, to share the emerging trends from McKinsey’s global B2B consumer sentiment survey.
Charm speaks with consumers through qualitative or quantitative primary research in the service of growth and innovation for McKinsey’s clients. Much of her work is focused in the consumer and research sector.
This post will provide an overview of the Global Consumer Sentiment Survey and include some findings from the most recent McKinsey consumer research. You can view the briefing-on-demand, in its entirety from here.
The Global Consumer Sentiment Survey
In mid-March, McKinsey launched a series of surveys across 40 countries to understand what consumer sentiment was, overall.
Source: McKinsey & Company
The surveys explore the following consumer sentiments in the age of COVID-19:
- Their overall sentiment
- The level of consumer optimism
- How much consumers expect to spend
- What consumer income expectations look like
- How they’re directing their spending and in what categories
- What new things consumers doing now, and what they expect to continue doing
- What will happen as the economies start to open back up (upcoming)
Consumer sentiment varies depending on the country
McKinsey’s research shows that as the progression of the pandemic moves through the globe, consumer sentiment among different countries is starting to waver.
For example, US optimism over recovery went from 39% of respondents on March 22, to 35% on April 19. This pattern of dwindling optimism is similar in many European countries, except for Germany whose optimism continues to be stable. Research shows that optimism in China is also starting to return.
Source: McKinsey & Company
Charm reviewed some findings from a US-focused survey about overall sentiment in the general US population. Here are a few key results based on that survey:
- 27% of respondents feel their ability to make financial ends meet has been negatively impacted by coronavirus or COVID-19.
- 31% of respondents said their income has been negatively impacted by coronavirus or COVID-19.
- 47% of respondents indicated they are cutting back on spending.
- 49% of respondents said they must be very careful about how they spend their money.
Consumers are reducing discretionary spending
McKinsey’s research reveals that global consumers are cutting back on discretionary spending across all consumer categories, except for groceries and home entertainment.
“Reductions in spend have impacted almost all categories that we measured,” explains Charm. “The two consistent categories that people expect to spend more on are groceries and home entertainment, with pockets of optimism across other categories such as snacks (in the US and Japan) and household supplies across many of the countries.”
The hardest hit industries — based on consumers’ intent to spend — were travel (gasoline, vehicle purchases, cruises, etc.) and entertainment (except for home entertainment).
Consumers intensify digital behaviors
McKinsey asked consumers how much time they expect to spend on a variety of work and leisure-related digital activities over the next two weeks, compared with time they normally spend on them.
Findings revealed that nearly every digital leisure category will see increased activity, and this was true for most countries, excluding China, whose projected time spent on leisure activities is lower while time spent on work-related digital activities will be higher.
Here is a breakdown of the activities included in the survey:
- News: Live news, reading news online, reading print news
- Content: Movies/shows, live TV, video, reading/personal interest
- Social: Texting/chatting, messaging, social media, video games
- Personal: Cooking, home improvement, exercising
- Work: Learning/remote learning, working
The survey clearly demonstrates that consumers are spending their time differently due to coronavirus-related shutdowns and precautions, with digital consumption of content such as news and live TV increasing and digital-related activities such as gaming and social media usage also increasing for most countries.
Time spent on work has decreased across most countries, with the exception of China.
Source: McKinsey & Company
Digital and low-touch activities are growing
Consumers across countries are intensifying time spent on a wide variety of digital activities from online grocery shopping to videoconferencing to telemedicine.
“Some categories are seeing an influx of new customers who haven’t started that activity before,” says Charm. McKinsey’s research reveals many categories that show a marked number of new users. Here are some examples:
- TikTok usage is markedly increased in France and Spain
- Restaurant and store curbside pickup has dramatically increased in the US, UK, Spain, and Italy
- Remote learning has increased significantly in the US, France, Italy, and China
- Telemedicine has increased across nearly all countries surveyed
“40 to 60% of consumers indicated that they intend to stick with these behaviors going forward, depending on the category,” says Charm.
What growth leaders need to consider moving forward
Charm advises marketing leaders to think about taking a three-horizon approach as they move forward in the midst of this pandemic:
- Resolve & Resilience: Navigate the now
- Return: Plan the recovery
- Reimagination: Lead the next normal
“As marketing leaders, managing the human element is critical – and that is taking care of our people, customers, and communities. At the same time, we need to must think about the three horizons to shape the way forward: navigate the now, plan for recovery, and lead the next normal,” explains Charm.
“It’s important to address what’s happening now, then how do you approach recovery and planning, and, finally, as we think about shifts in behavior, we expect there will be a ‘next normal’ where not everything will go back to the way it was pre-COVID. Many of these intensified consumer behaviors will continue.”
Watch Tarama’s Peer Network briefing: Leading with Purpose: How Marketers Can Manage the Coronavirus and Plan for Recovery, to get a more in depth view on McKinsey’s findings.