Pandemic-Related Economic Concerns Loom Over Holiday Season
September 18, 2020
Marketers will need to find creative ways to reach and connect with consumers
The American economy is on the road to recovery from the COVID-19 pandemic, but will it be stable enough to save the holidays?
2020 has been anything but typical as we saw a great economic lull throughout the year. Typically, the holiday season is the most anticipated time of year for retailers and brands as they see their numbers jump into the black. But so much uncertainty about the future remains as the nation continues to manage the pandemic.
More than 65 percent of adults are concerned about their household income and more than half are concerned about their job security, according to a new survey by Civis Analytics fielded Aug. 21 through 24.
Civis has been regularly surveying adults to track public opinion on issues related to the pandemic and our national response. Public concern about job security and household income has remained steady since July, despite the reopening of much of our economy. In the survey taken the first week of July, 65 percent of respondents were concerned about household income and nearly 54 percent about job security.
This sentiment is alarming because consumer confidence, is a vital source of information as consumer spending constitutes about two-thirds of all economic activity. Consumers less certain about their financial prospects spend less money, which hurts business revenues as a result.
The U.S. unemployment rate in August dropped below 10 percent for the first time since March but is still significantly higher than it was before the pandemic. Unfortunately, there are signs that companies will continue to tighten their belts. Airlines, for example, have recently announced significant furloughs as U.S. air travel remains down roughly 70 percent from where it was a year ago.
The pandemic has added to the woes of retailers already struggling with the rise of online shopping and the decline of malls. JCPenney, Neiman Marcus, Lord & Taylor and others have filed for bankruptcy in recent months and thousands of stores have closed.
Retailers and other consumer-oriented industries are banking on Congress to stimulate the economy by passing another Covid-19 aid package. Congress didn’t extend the $600-a-week boost to unemployment benefits that expired on July 31.
The Federal Reserve is doing what it can to boost the economy. The central bank has signaled that it will likely leave interest rates very low for a long time, but it can’t force people to buy flat-screen TVs or take holiday vacations.
Taking a closer look at the survey, the Civis August poll found that adults making more than 150,000 dollars annually — the highest income demographic in the survey — were more concerned about their household income (70 percent) than adults making less. If higher-income brackets pull back on Christmas gifts, this holiday season could be gloomier than ever.
For brands and retailers in the throes of preparing for the holidays here are some things to keep in mind:
- Put yourself in your customers’ shoes.
Be empathetic — adjust your messaging and tone to address the situation head-on.
- Create connections.
Build meaningful touch points with customers, while sharing compelling relevant — and searchable — content that draws in your target audiences.
- Seize the power of social.
Since peoples’ daily and work lives have shifted online because of the coronavirus, social media has become an even more important tool to stay connected — to friends, to family and to brands. Tap into this platform creating excitement about your brand with exclusive-to-social offers and promotions.
- Expand your reach to ensure you’re reaching all audiences.
Be mindful of your messaging and ensure you are including people of color and other diverse audiences.
- Be relevant.
Don’t ignore the issues around you, whether that be the public health crisis or social issues related to the Black Lives Matter movement. Marketers have a significant role in addressing these issues, but those efforts must be sincere and come with brand action.
While the holiday season will undoubtedly look different in 2020, with a little creativity and a willingness to pivot, it can still be special.