As COVID-19 Spreads, ‘Pandemic Pantries’ Rise

With the COVID-19 pandemic still raging around the world, consumers are faced with a number of unknowns, uncertainty and a general feeling of lack of control over their precarious and risky situations. Thus, in times like this, consumers tend to try anything that will make them feel they are in control. And one such “I want to control my situation” behavior is panic buying.

Consumer psychologists explain that panic buying can be understood as playing to three fundamental psychology needs. These needs are autonomy (or the need to feel in control of your actions), relatedness (the need to feel that we are doing something to benefit our families), and competence (the need to feel like smart shoppers making the correct choice). On top of this, consumers tend to avoid future losses i.e., when they anticipate either scarcity or price fluctuation, despite regulatory restriction, they resort to panic buying.

In normal situations, these psychological factors are also the same as treating ourselves with “retail therapy”—a common response to some type of personal crises. The only difference between the normal situation and crisis mode are the added layers of uncertainty and the presence of contradicting and blurred information coming from different sources. Thus, when consumers are hearing differing advice or information from multiple sources, their tend to overprepare rather than buy “just enough” for the day or week.

Additionally, during times of crisis—especially health crisis of global proportion—there exists crowd mentality. When consumers see other people buying in volume and find the shelves running out of supplies, the decision to stock up is validated. The feeling of “I don’t want to be left behind” kicks in.

During crisis, a number of forces are also at play that brands should watch out for:

  1. Trust – Trust of consumers in public and private institutions result in herd behavior. During crisis, mistrust, coupled with the spread of fake news and information, can result in people developing their own versions of the truth and eventually spreading rumors that may be detrimental to both institutions and brands.
  2. Fear – Fear is the driving force behind irrational consumer behavior during crisis—leading them to think that there might not be enough for the family so the tendency is to hoard.
  3. Short time horizons – During stressful situations, consumers exhibit behaviors with short-time mentality. They would buy products, some of which may not be essential, especially when they see others buying them. This they do without realizing that purchases of today may actually mean losses later on due to nonuse or nonconsumption.
  4. Reputation – Personalities and/or influencers matter during crisis situations because they can either sway consumers toward good or bad decisions in their consumption of commodities.
  5. Food prices – Consumers are extremely sensitive to food prices, especially during a crisis. The more rapidly food prices of leading commodities increase, the more likely people will feel they will lose out if they don’t purchase these food items in bulk. Often, when consumers notice even a slight change in food prices because of the crisis, they buy immediately and at increased quantities, more than what they normally need.
  6. Purchasing power – The financial ability of consumers to buy products matters during crisis. The poorer class, despite lack of resources, also engages in some form of panic as herd mentality occurs. Being left behind is a stronger force than capability.
  7. Information – Access to accurate information about food logistics, supply chains and the ability of supermarkets and local markets and groceries to deliver sufficient food in the future matter during crisis. Crowding occurs when this information is not available.

Because of the COVID-19 crisis, experts said we were seeing the emergence of so-called pandemic behavior.

Market research company Nielsen identified, for example, six key consumer behaviors tied to the COVID-19 pandemic and their results on markets.

These are:

  • Proactive health-minded buying (purchasing preventative health and wellness products)• Reactive health management (purchasing protective gear like masks and hand sanitizers)
  • Pantry preparation (stockpiling groceries and household essentials)
  • Quarantine prep (experiencing shortages in stores, making fewer store visits)
  • Restricted living (making much fewer shopping trips, limited online fulfillment)
  • A new normal (return to daily routines, permanently altered supply chain)

Other experts are also weighing in, saying shopping behaviors are also changing based on generational differences. They are saying while people in general are concerned about the growing pandemic, the youngest generations are particularly altering their purchasing behaviors like cutting back on spending, stocking up on items, and spending less on experiences.

The millennials are actually now being described as the “worry” generation.

Greg Petro, CEO of retail predictive analytics company First Insight, said in an interview that, “Generally everyone is concerned about it, everyone believes there will be a financial impact. But millennials’ behavior is changing more dramatically than any other generation. They are going to cut their spending.”

Experts are also seeing consumer consumption variations based on gender. While a US study shows that women are more likely to be concerned about the effects of COVID-19, it also shows that men are more likely to have it impact their shopping behaviors. One-third of men, compared to 25 percent of women, reported the pandemic affecting how much they spend on products. Additionally, 36 percent of men, compared to 28 percent of women, reported it affecting how much they are spending on experiences (travel, restaurants, entertainment, etc.).

As consumers are making buying choices and nitpicking on their consumption based on new and ever-changing circumstances, the product categories that are being purchased are also shifting. In fact, this is a phenomenon called by some experts as the rise of Pandemic Pantries.As expected, all of us have seen in our local groceries that one of the first things that fly out of the shelves are health and safety products—they are being purchased far faster than they can be produced and restocked. Next one are shelf-stable goods—those that can easily be stored and have a long shelf life as consumers do not know when this crisis will end. They buy easy-to-cook, canned, frozen and packaged goods as people are planning for long-term quarantine.

As more people social-distance and stay at home, it comes as no surprise that preference for digital streaming services also increases. The demand is so big that even local regulators are asking service providers like Netflix to dial down on data use, arguing that the increased demand from subscribers for video streaming will result in the overloading of network capacity during quarantine period.

But, as local experience will bear, some goods are not as fortunate given low to almost nonconsumption of these goods during this pandemic crisis.

Tourism-related products and services, restaurants, other forms of entertainment that require physical presence and participation are not as lucky compared to the food industry. The luxury goods industry will also suffer from this environment as resources are diverted more to essentials.

Generally, the retail industry is also suffering—even those considered “omnisellers” i.e., they sell both online and through brick and mortar.

One bright spot during this crisis is that more consumers are maintaining or increasing their spending on takeout or meal delivery.

These “crisis” consumer behaviors should be taken into consideration in brand’s response to this pandemic crisis. They should be able to adapt to the new normal in brand consumption without forgetting their responsibilities to the communities as well.

But one thing is for sure, as brands and companies navigate these challenging times, they must never forget that when it comes to finding the right messaging, one that focuses on how the brands are supporting their communities will matter.

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