Consumers who have been or plan to be vaccinated are more likely to engage in a variety of purchases.
According to the latest McKinsey & Company “U.S. Consumer Sentiment Research,” 33% of survey respondents who have been vaccinated are engaging in out-of-home activities, along with 22% of respondents who intend to be vaccinated.
McKinsey expects that greater spend and out-of-home activity will likely continue to increase as younger consumers receive the vaccine. Currently, the vaccinated group is comprised largely of baby boomers, who indicate a lower propensity to spend, while younger consumers have a greater desire to spend and greater opportunity for activity.
In more encouraging news for retailers, about half of respondents who say they are unlikely to be vaccinated are already engaging in regular out-of-home activity and have similar spend intent to the non-vaccinated population at large.
Overall economic optimism has stayed relatively flat since October 2020, with 40% of respondents consistently optimistic since that time, while just under 15% remain pessimistic. McKinsey data reveals that discretionary spend has accelerated since summer 2020 in “COVID-19-relevant” categories (e.g., home furnishing). Some categories that have been depressed by COVID-19 are starting to recover as well (e.g., apparel/department and cosmetics stores) as year-on-year losses decrease.
More than half of respondents expect to make up for lost time and spend more or “splurge,” with higher-income millennials intending to spend the most. Around half of respondents who plan to splurge are pandemic-fatigued and intend to spend soon, particularly on discretionary categories such as apparel, beauty, and electronics. The other half is waiting for the pandemic to fully resolve, and plan to splurge mainly in experiential categories such as restaurants and travel.
Retail categories saw a dramatic increase in online penetration during shelter-in-place protocols of April 2020, growing from 37% penetration before COVID-19 to over 80% at its highest. While penetration went down during the second half of 2020, it has remained at a level higher than before COVID-19, with McKinsey recording online penetration in January 2021 at 48%.
In addition, of the 75% of respondents who have changed their shopping behavior since COVID-19 began, around 40% say they have changed brands, with the level of brand-switching doubling in 2020 compared to 2019. These switching behaviors are more prevalent among Gen Z and millennial consumers than with boomers (44% of Gen Z and millennials have tried a new brand, compared to 35% of boomers).