Consumers itching for holidays and big ticket purchases

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From a consumer confidence perspective, 2021 has got off to a relatively optimistic start. That’s promising news, given that we’re still digging our way out of a global pandemic. Thanks to the various government-imposed restrictions (including lockdowns and stay-at-home orders of varying durations) and vaccination programmes that are beginning to reach critical mass in many countries, there is finally a light at the end of the tunnel in many regions.

Considering the turmoil we’ve been through – cycles of lockdowns, re-openings, tighter lockdowns and partial reopenings – it’s no wonder consumers are feeling tentative. It’s hard to feel confident enough to plan a vacation when you don’t know when the next wave or set of travel restrictions may be put in place. Across most of the world, humanity has been, in waves: panicked, hopeful, frustrated and numb. So it’s encouraging that we seem to be entering Q2 with cautious and careful optimism.

What one year of analysis tells us...

We’ve learned that once the trajectory is set, the spread of the virus is relatively predictable until it is stalled by interventions that interfere with human interaction, like lockdowns and vaccination programmes. After a year of analysing consumer movement data through the pandemic, we can confirm what we’ve always known: that consumer behaviour is also relatively predictable.

Rising optimism in Q1

While every region we’ve observed – including the US, UK, Italy, Netherlands, Singapore and Australia – started from a vastly different point of confidence in their local economy, one truth has emerged: In Q1, consumers in every region have reported more confidence in their own household financial situation than in their country’s economy. This may be a reflection of people’s instinct to control what they can when the world around them is in chaos. The income support programmes introduced in many markets, like PPP in the US, have also undoubtedly contributed to this confidence.

Early in the pandemic, fiscal prudence was the overarching trend. Consumers kept their funds close, prioritising savings and debt repayment. That behaviour continues, but the resilience in consumer spend is now evident. There’s been a nearly instant and measurable increase in store visits once restrictions are lifted, suggesting that this prudence has been motivated by preference and caution rather than necessity.

Indeed, consumer intent to spend on bigger ticket purchases including holidays, home improvement and cars, outranks everyday purchases. It appears that consumers are itching to get back to what they know, even if the experience is a bit different for the moment.

Ultimately the top-down influencers on consumer sentiment over the last 12 months – apart from the virus itself – have been governments and scientists. Their actions and statements may have stalled and diverted consumers’ plans. But all the while, consumers and the businesses they patronise have proven adaptable and resilient, and consumers have found ways to keep consuming.

To dig in deeper to the data, check out the trackers for the UK, US, Italy, Netherlands, Australia and Singapore here.

Alex Wright, global insights director, Blis