THE COVID-19 EFFECT: CHANGES IN CONSUMER BEHAVIOR
Over the course of COVID-19, we have closely measured consumer behavior, preference, priorities, anxieties and expectations in response to the pandemic. Naturally, with lockdowns and shelter in place restrictions varying state by state, the way in which consumers engage with the On Premise has changed.
In this ‘new normal’ landscape, consumers have radically different definitions of what makes a positive On Premise experience. Category preferences, drinking habits, and priorities on health, safety and selection have all dramatically shifted, introducing a host of new challenges for On Premise businesses.
The below trends, based on our regular COVID-19 impact reporting, reveal a top-line understanding of how consumer behaviors and preferences have changed. As we prepare to launch our biggest, most in-depth consumer research project of 2020 (The Fall On Premise User Survey), we anticipate huge shifts in consumer demands, expectations and intentions. Undoubtedly, this means fresh strategies are needed from suppliers and retailers who may be relying on outdated and irrelevant consumer research.
VISITATION IS STABILIZING
As of September 10, our COVID-19 On Premise Impact Reports revealed that nearly half (48%) of consumers had been out to eat in the previous two weeks, up from 38% in early July.
In the U.S., hygiene remains paramount. Over the last six months, the top factors that encourage consumers to return to the On Premise have remained: enhanced hygiene practices, outdoor seating, distancing in venues, and staff in PPE. White still important, traditional factors such as value for money and atmosphere are less of a priority in the face of COVID-19 On Premise visitation.
FINANCIAL AND HEALTH CONCERNS
Of the consumers we surveyed, 63% say they are concerned with the impact of COVID-19 on their personal finances, and 80% say they are concerned about their own health and that of family members. Compared to other markets (such as the UK), where concerns such as atmosphere and finances are increasing while health concern decreases, the U.S. consumer appears less confident.
Front-line teams have worked hard to reassure guests and give them the right mix of safety and experience, and consumers recognize that: 84% of consumers say they are satisfied with the health and safety precautions of On Premise staff, and 83% report feeling satisfied with the overall experience.
DESIRE FOR FAMILIARITY
With concerns about health and safety still prevailing, high-tempo occasions are currently less desirable to On Premise consumers. The top two occasions for going out are for drinks and food (42%), and relaxed or quiet drinks (27%) vs special occasions at 25%. This indicates a shift toward low-tempo, calm settings.
As some incomes fall but others remain unaffected, research in the UK, US and China points to a growing divide between value and premium drinks choices. Half (50%) of U.S. consumers who ordered premium drinks in the past two weeks, have ordered more of them than they did before COVID-19, taking share from mid-market brands.
There are strong signs that consumers will continue their high delivery frequency, including from restaurants and bars. In the U.S., there has been a notable surge in orders of alcoholic drinks to go alongside food.
The pandemic has accelerated the take-up of many aspects of technology, and half (48%) of under-35s in the U.S. think it is an important part of their On Premise experience. Menu preferences and payment methods are a good example of this: 18% now prefer phone-based food and drink menus / would like the ability to pre-order and pay online, and 24% would like contactless and cashless payment options.
DEMAND FOR EXPERIENCE
The demand for a uniquely ‘On Premise experience’ has been reflected in the ordering habits of those visiting bars and restaurants, particularly through the popularity of cocktails. The number of cocktails being ordered is higher than the number of people who claim to drink them, suggesting that some categories offer a unique or specific On Premise experience.
With people so anxious about crowds, there has been a big shift away from city center venues to local ones. The trend has been bolstered by the soaring numbers of people working from home, who are choosing nearby venues for meals and drinks rather than travelling. In the U.S., a third (34%) of consumers are actively avoiding city centers and busy places. This could lead to a long-term change in the types of occasions in cities—from after-work drinks and business lunches to family visits or couples’ escapes for example.
While our COVID-19 consumer reporting continues to be a strong indicator of changing consumer behaviors, to truly understand and redefine the On Premise consumer, robust, in-depth research and analysis is needed.
At the end of this week, we will be conducting one of our largest pieces of in-depth consumer research of 2020, with the aim of truly understanding the new On Premise consumer. The results of the On Premise User Survey (OPUS), released late November 2020, will enable retailers and suppliers of On Premise businesses to understand and redefine who their target consumers are. To unlock the who, what, when, where and why.
As part of this research, we are also inviting businesses to submit custom questions to the survey, which will provide them with specific, tailored answers to their biggest consumer questions and current challenges. New and returning clients are open to ask anything On Premise retailed, and will receive the exclusive responses within this quarter. All results are nationally representative with hyper-relevant data – all responses will be from those who have visited the On Premise within the last three months.
The results of this survey can be accessed via an OPUS subscription, or through our upcoming syndicated report. To learn more, or to submit a question to the survey, email us (firstname.lastname@example.org) Custom Questions deadline is September 25, 2020.
Source: Nielsen CGA Custom Consumer Research and OPUS (On Premise User Survey)
The above trends, based on Nielsen CGA data, were also shared in the ‘Redefining the out-of-home experience’ webinar hosted by CGA and Peter Martin’s Atlantic Club.