3 trends in consumer behavior impacting local brands

It’s an understatement to say that 2020 was a year of upheaval, change and turmoil, and consumers everywhere responded by adapting to the moment in unexpected ways. As 2021 gets underway, we think it will be helpful to consider which of those consumer behaviors are likely to stick around and which are likely to fade away.

Local has become more important, but not in the way you think
Consumers in many markets shifted their spending to support local businesses struggling to survive during the shutdown (43% still report being more likely to do business locally compared to before the pandemic), but that effect was uneven across markets and business categories. It’s probably better to think of ‘local’ as a function of ‘location.’ 

About 53% of our respondents report working from home now at least part-time – an increase of 104% from before the pandemic (26%). That means thousands of consumers no longer start and end every weekday driving across or through town on the same route as before. This in turn has driven an increase in the importance of location for everything from auto dealers to furniture/home goods, clothing and grocery stores. Brands have responded by increasing delivery, curbside pickup and quick-ship options, all in an attempt to keep consumers engaged against their established locations – locations selected to take advantage of traffic patterns that no longer exist and may never re-emerge.

Quick take: Consumers are driving less (64%), so they value brands that are close to them or that close the physical gap with services like free delivery, same-day shipping and curbside pickup.

Working from home is here to stay – and it will reshape everything
41% of consumers report that they will continue to work from home (WFH) at least 50% of the time after the pandemic. Again, while we see some variance in this trend by market – with Washington DC reporting one of the highest pre-pandemic WFH levels and therefore one of the lowest rates of change in post-pandemic WFH – the overall momentum is clear. Employees and employers alike have found ways to work in a virtual environment, and while many of us long for the days of catching up around the water cooler, the new flexibility the new workplace offers is here to stay. That flexibility, coupled with concerns about airlines, hotels and theme parks, will reshape consumer travel and leisure spending. 

Quick take: Expect 2021 to look a lot more like 2020 when it comes to flexible work schedules, drive time destinations and long weekend holidays spent where consumers can avoid crowds.

2020 may have been the world’s biggest honey-do list – making 2021 a tougher environment for home services
Home service companies of all sorts – from big box retailers to local plumbers – reported record levels of sales throughout the pandemic, but Magid data shows demand was shallow and doesn’t appear to represent a shift in wallet share. 42% of consumers now tell us they are likely to spend money on home services, roughly the same levels we saw throughout 2019. Evidence seems to suggest that 2020 activity levels reflected consumers tackling long overdue to-do items while they were home, making appointments for estimates and repairs easier to manage. 

Quick take: Home service companies in 2021 will need to rethink their positioning to maintain momentum with consumers under increasing economic pressure.

Brands and local businesses will need to understand how these trends and shifts in the local landscape will influence consumer behavior and impact customer loyalty throughout the year ahead. 

Interested in a deeper dive into insights like these? Let’s talk.