How the At-Home Economy Will Evolve During the Recovery Phase
Charting the consumer behavioral changes using the “Start, Stop, Continue” framework
The at-home economy is not an entirely new phenomenon. The move towards ecommerce, on-demand delivery, and a shorter theatrical window for new releases have been going on for years to cater to a growing consumer segment that prefers to be “homebodies” and enjoy what they like in their personal sanctuaries.
However, the pandemic has accelerated the growth of at-home economy and spurred behavioral changes at an unprecedented scale. As we enter the recovery phase, not all new consumer behaviors will be retained, and new ones will pop up. Therefore, it is important that we marketers apply a systematic framework to identify the ones that will stick around, separate them from the ones that won’t, and predict new behaviors that may emerge.
The At-Home Economy Boom During Lockdown
Over the past two months, people from all over the world have been confined to their homes due to the COVID-19 pandemic, cutting us off from all sorts of outdoor activities and amenities that we usually enjoy. At its peak, 94% of the U.S. population was under official orders to social distance and stay home, shutting down a huge portion of the economy, like a necessary but twisted social experiment at a grand scale. However, not all sectors of the economy were put on pause; those that catered to consumers cooped up at home predictably underwent a big boom. From kitchenware to home gym equipment, from online grocery services to home entertainment, nearly all products and services meant to be consumed at home saw significant growth as they capitalized on concentrated consumer interests. At one point, flour sold out at many supermarkets as many people suddenly took on baking as a therapeutic hobby.
And it is not just the things that were designed to be consumed at home; before long, businesses that used to operate outside of the at-home context also started experimenting with different ways to enter this new environment out of necessity. Many small businesses, especially restaurants, quickly pivoted online while some travel brands started developing virtual experiences to keep their audiences engaged. Work and education have also shifted online, leaving many consumers to establish new routines at home and make new lifestyle choices. In some cases, circumstantial policy changes also offered a rare opportunity for change. For example, aided by a temporarily relaxed policy change in some states, some bars started selling cocktails as takeout orders.
Work and education have also shifted online, leaving many consumers to establish new routines at home and make new lifestyle choices.
As a side effect, the major boost to the stay-at-home economy has catapulted digital creativity to new heights. From barbers to pastors to fitness instructors, people of all professions that used to make money via in-person services, are now turning to online platforms to make money using their expertise, often through live video. All the creative talent and services that are distributed via offline channels under normal circumstances have suddenly shifted online and adopted new formats to reach audiences who are stuck at home.
What Happens Next
As we enter the recovery period with many cities and states tentatively reopening, the unique conditions that gave rise to the at-home economy are starting to be phased out, leading to another round of behavioral changes as consumers and marketers adjust to the “new normal.” Although life is starting to go back to “normal,” without an effective vaccine widely available, many of the concerns that informed the lockdown period will still loom in the people’s minds like a bad hangover and informing a new consumer mindset. To approach this, it may be helpful for marketers to categorize consumer behaviors into the following three categories:
- Start — this category emcompasses consumer behaviors that are entirely new, meaning that they are not a continuation of the trends developed in the lockdown period, and are mostly reactive to the “new normal” of the recovery phase.
- Stop — this category covers the kind of consumer behaviors that developed during lockdown, but are largely going to subside as consumers can venture out of their homes again.
- Continue — this category refers to the behaviors that are formed during or even before the lockdown phase, being accelerated to a tipping point that, even as restrictions are lifted, they have been so fully ingrained into consumers’ daily lives that they will continue to grow in momentum.
While this framework applies to consumer behaviors in all sectors, for the sake of this piece’s scope, we’ll explore how this framework applies to consumer behaviors born out of the at-home economy one by one.
Start: Lingering Concerns Spur New Behaviors
As we get the opportunity to get out of the house and start socializing again, lingering concerns over social distancing, personal hygiene and health, and personal finances will likely lead to some new behaviors both at home and outside home.
In terms of the at-home economy specifically, this applies to behaviors that aim to connect out-of-home experiences with at-home consumption, which includes:
Two-step shopping: With many stores still restricting the use of changing rooms, many consumers will likely opt to browse in-person in stores, especially for categories such as fashion and grocery, but try them on at home to decide whether to keep them, or buy a small package for sampling before committing to larger quantities. This means that the home will become an extension of the store — bedrooms are the new fitting rooms and kitchens the new sampling stations. And the customer journey is flipped, with the real purchase decisions made not at the point of purchase in stores, but after things are tried on at home. In response, brands will need to reorganize their customer journey and retool their services in support of such new shopping behaviors with better return policies, more free samples, and more flexible logistics and operations.
The home will become an extension of the store — bedrooms are the new fitting rooms and kitchens the new sampling stations.
Hybrid events: While events like sports and conferences are gradually coming back, many will still hold out due to lingering safety concerns. This will likely lead to an interesting hybrid of events that happens both outside and inside homes. Some people will be on-site at events to facilitate them, while most attendees trying to avoid big crowds will participate remotely through telecommunication or live video services. Every event also suddenly becomes a scalable media opportunity, with on-the-ground staff on-site to produce the content that many will enjoy safely from home, giving live content a further push in aggregating home audience attention. Another extension of this would be the revival of drive-in experiences such as drive-thrus or park-and-view services.
House party economy: With a sizable segment of the population suffering from the economical fallout of the pandemic, we will likely see a surge in DIY home projects, especially those that are conducive to receiving small gatherings of family and friends at home to enjoy the summer. This could lead to more consumption for house parties, which means catering opportunities for restaurants and bars, as well as increased interest in outdoor home decor. What separates this from the home projects that surged during the previous lockdown period is its distinct social elements. As private residences become increasingly important venues for socialization, brands with products and services that are meant to be consumed socially must pivot to cater to consumers at home and retool their brand experiences accordingly.
Stop: Forced Temporary Changes Fades Away
Of course, not all behaviors that popped up over the past two months will stay in place. Many of the new behaviors that emerged may be imposed out of pure circumstance, and with restrictions being lifted, most people will eagerly do away with those inconveniences and either go back to the old ways of doing things or embrace brand new behaviors. this category includes the kind of red-herring behaviors that brands need to stop investing in.
In terms of the at-home economy, this category is mostly filled with behaviors that are unsustainable due to practicality or regulations, which may include:
Home-schooling: with most schools set to reopen in September, kids will finally be out of homes and giving parents that have been juggling parenting and remote working a long-overdue break. While e-learning has seen significant growth over the past few months, and may stay in place for some students in higher education, most schools will not pivot quickly enough to online education, and no daycare infrastructure is being spun up for parents. Sooner or later, kids will return to schools, and the consumer behaviors centered around home-schooling will decrease significantly in its presence in the at-home economy.
To-go drinks: this one has more to do with policy changes. As previously mentioned, the reason that bars can sell alcoholic beverages for takeouts now is due to a temporary relaxing of regulations meant to help them keep afloat. With states reopening, however, one could easily see the regulations revert and stops to-go drinks from being a part of the at-home economy.
One caveat about the behaviors in the Stop category is that they may not be dropped by all of the consumers. Some consumers may continue to carry on with what they have become accustomed to during the lockdown phase while most stop and revert to what they were doing before. Once we are out of the recovery period, it is a toss up whether some behaviors that we adopted during this pandemic will be disregarded or kept, and it is difficult to predict which is which given that we are barely at the beginning of the recovery phase.
Some consumers may continue to carry on with what they have become accustomed to during the lockdown phase while most people stop and revert to what they were doing
Continue: Keep Doing What Has Proven To Be Working
Lastly, we arrive at the most important category that brands must heed, and that is the behaviors that emerged out of this pandemic that will likely stick around, now that they have been proven to be viable and beneficial. This is especially true given that some of us will continue to work from home for the foreseeable future, giving more weight to our experiences and consumption at home. These are the behaviors that brands will need to continue to invest in to keep up with the post-COVID behavioral shift.
In terms of the at-home economy, this covers a wide range of behaviors across categories such as:
At-home entertainment: Home entertainment has seen a significant boost over the past two months, and consumer preferences will continue to be focused on entertainment that can be easily accessed from the couch. This includes entertainment vectors such as movies, theaters, live concerts, and so on, as more and more entertainment content moves to digital and social channels. Co-viewing experiences have become normalized over the lockdown phase, and it will continue to influence how we consume entertainment content at home.
Home cooking: Food and home cooking is a major part of the at-home economy and it will continue to be. Even as the restrictions around dining out are lifted, people are holding onto the digital tools they have adopted during lockdowns to access, purchase, and enjoy food. Online grocery, for example, jumped by 110% in daily sales between March and April. A recent survey shows that 54% of Americans are cooking more than they were before the pandemic, indicating that the at-home chef is here to stay.
At-home fitness: Exercising at home became a necessity for many during lockdowns, with many having invested in workout equipment and online fitness services to keep fit. As we enter the recovery phase, hygiene concerns linger around sharing equipment in gyms or taking group workout classes, so we could easily see at-home fitness to continue developing as a vital part of the at-home economy.
Omnichannel services: As the pandemic forces consumers to explore online channels, some product categories that were previously deemed as highly resistant to digitization, such as grocery and fashion, have seen their customers migrate to online channels. While some of them will no doubt revert back to in-store sales and in-person services, many will hold onto the convenience and flexibility that digital channels provide. Services such as on-demand delivery, telemedicine, as well as online financial and legal services will continue to be available for consumers who prefer to stay home. The key challenge for brands, therefore, is to adopt an omnichannel strategy and retool their customer experience to ensure the quality and accessibility of their services through both online and offline channels.
In conclusion, the recovery period will bring about many changes in consumer behaviors, but overall the at-home economy is not going away. Instead, it will continue to morph with the dynamic circumstances and respond to the shifting consumer demand. To reach consumers at home, brands will need to clearly understand their needs and implement innovations that facilitate new behaviors and support the continuing behaviors. Make consumers feel at home, and your brand shall be richly rewarded.
