As COVID-19 makes a comeback in many cities across the US, the position of businesses that only recently regained the ability to open their doors to the public becomes more precarious. States, counties, and cities are backtracking on their reopening plans as hospitals reach capacity and cases reach new record highs.
While dozens of countries worldwide have been able to manage the outbreak and flatten the curve, the US is seeing its numbers rise as a result of many states reopening prematurely and creating conditions for COVID-19 to spread with lax restrictions on bars, clubs, and other places that promote large gatherings.
Even in California, 7 counties (including Los Angeles) have been ordered to shut down bars that hadn’t re-opened more than a week ago. States like Florida and Texas are also reinstating closures to curb the spread of Coronavirus.
However, amidst all of the commotion, the 4th of July holiday is only days away with many planning to travel, shop, and gather for festivities.
- Despite growing coronavirus numbers, US consumers are still eager to shop and support businesses with their dollars as purchasing traffic and sales continue to grow.
While these numbers signal hope for retail, consumer spending as a whole has dropped 13.6% and savings have risen to 33%, which means people are holding onto their money and pumping less into the economy.
There are two potential reasons for this, there are fewer things to spend money on or consumers are preparing for financial uncertainty. The picture becomes even more complex when you look at who’s saving and who’s spending. In large part, high-income consumers are saving and lower-income consumers are spending at or near pre-pandemic levels.
- Concern is rising and consumer confidence is waning as the United States is struggling to manage the outbreak of coronavirus.
- However, this outlook only shows a slight downturn in recent weeks as consumer protections are due to expire and financial uncertainty undoubtedly increases with the growing number of unemployed individuals.
- The majority of those that are planning to travel prefer ground transportation, which is likely due to uneasiness about safety and hygiene aboard flights.
- Early in the pandemic consumers adapted to concerns by turning to alternatives to service their essential needs and preserve their well-being like curbside pickup and home delivery. A trend that has signaled heightened precautions shoppers are taking when stepping out into the physical marketplace and that continue into current pandemic-era trends.
- The recent wave of closures has left consumers wondering what is open and when it will be open. Businesses should be mindful of their online listings on various platforms to keep customers informed.
- The stock market has begun to recover considerably since the world's economies came to a screeching halt in mid-March with the reinforcement of supply chains and outlook on consumer spending.
- For the first time ever, Google ad revenue has decreased. As a result of COVID-19 many businesses have slashed advertising budgets to make up for shortfalls in revenue.
- Other large advertisers saw growth, but that was also severely stymied by coronavirus spending cuts.
- Facebook’s projected ad revenue has decreased by nearly $5 billion dollars for 2020.
- Companies that invest in the long-term health of their company by increasing marketing spend during recessions or economic downturns grow faster than those who increase spending during periods of economic stability.
This article originally appeared in the HawkeMedia blog and has been published here with permission.