Over the past couple of months, COVID-19 transmission picked up pace. Europe reported 25 million cases last week, and remains the pandemic’s epicenter, and the worst-affected region, Reuters reported. North and South America follow with over 24 million, and 13 million positive cases confirmed Coronavirus cases as of Tuesday.
There is a paradox linked to how people are handling their lives through the pandemic. As Coronavirus cases surge globally, fears of contracting the virus are falling in developed markets, a YouGov survey found.
Lockdowns and other measures completely changed the way people work and interact with others, and businesses spent much of 2020 scrambling to adapt to these circumstances. With rules and restrictions changing constantly, individuals now live with inherent uncertainty about what lies ahead.
When news of the outbreak spread back in March 2020, people panicked and bought hand sanitizers, face masks and household essentials, including bread and toilet paper in large amounts. With the interruption to international trade, supplies had started running low.
When the first wave of anxiety passed, a ‘new normal’ emerged with a muted reaction to the current climate, attributed to a growing acceptance of the changes forced upon us, sociologists believe.
The ‘new normal’ definition keeps changing. During the early days of the pandemic it included; remote working and learning, panic buying, strict lockdown measures, airport closures and disruption to international trade.
Expected to grow with vaccine rollouts, strong consumer confidence will return in 2021, McKinsey & Company revealed in its report: ‘COVID-19: Implications for business.’ The pandemic caused consumers to pull back on goods and services that required a physical presence. Could pent-up frustration lead to revenge consumerism with people buying products and services to make up for lost time?
McKinsey said the ’new normal’ will evolve, bringing a return in consumer confidence, a boost in leisure travel, diminished business travel, a new generation of entrepreneurs, widespread digital transformation, and the rebalancing of supply chains.
A transition phase now looms as public and private enterprises across the globe try to look ahead, and move forward to shape the future, while customers adapt consumer habits.
Every economic downturn results in pent-up demand, and when unleashed, creates the revenge consumerism phenomenon. Mckinsey indicated that throughout 2021, this will be and particularly evident in the services sector with social elements, including restaurants and other entertainment venues.
While the speed at which consumer confidence will recover remains in question, vaccination availability will play a role. Spending will only recover as fast as the rate at which people will feel confident about becoming physically mobile again, McKinsey found.
Research by YouGov suggested that by the end of December 2020, consumer confidence increased and the outlook for business activity showed the largest improvement since the beginning of the pandemic.
Quoted in a YouGov report about consumer sentiment in Britain, Kay Neufeld, Head of Macroeconomics at the Center for Economics and Business Research said: “The Consumer Confidence Index rose by 0.6 points to 102.9 in the first weeks of December, undoubtedly benefitting from a boost to sentiment as the first doses of the Covid-19 vaccine were rolled out in the UK. It is also encouraging to see that the forward-looking measures for both household finances and business activity ticked up, suggesting that consumers still feel that the economic recovery will continue over the course of 2021.”
He added, “The significance of consumer sentiment, which is an important predictor of consumer spending, has been underlined by the latest figures showing that UK households put away nearly 17% of their incomes in Q3. This has further swelled the nation’s savings buffer, which Chancellor Rishi Sunak hopes will be used to kick-start a consumption-driven recovery.”