SPEND OR SAVE? THE IMPACT OF THE CORONAVIRUS CRISIS ON CONSUMER BEHAVIOUR
Tue, 08 Dec 2020
From social distancing to working from home, the Covid-19 crisis has impacted on every area of our lives – and the way we manage our money is certainly no exception.
Nine months since the coronavirus pandemic first reached the UK, BNP Paribas Personal Finance has carried out a survey of European consumers, to measure the impact the coronavirus crisis has had on everything from morale to shopping habits.
But how have consumers in the UK adapted to the economic crisis caused by the pandemic, and what does this mean for your business?
According to the survey, 61% of Brits expect to restrict their spending and increase their savings over the next 12 months – with many experiencing redundancies or pay cuts as a result of the coronavirus crisis.
This tendency to save more is reflective of a general feeling of uncertainty around what’s to come, and it’s clear that there’s a degree of caution associated with this.
When it comes to how we shop, unsurprisingly online purchases have surged over the last twelve months – largely due to two national lockdowns – and 63% of those surveyed said the Covid-19 crisis has encouraged them to buy online in the long term. As a result, retailers with a strong online proposition have weathered the storm better than those without one, and this will be essential for most businesses to thrive in the long term.
The survey also revealed some interesting insight into how Brits are spending their money – with food being the area of expenditure that has increased the most since the pandemic began.
However, despite travel restrictions being relaxed over the summer period, our report displayed a general reluctance to spend money on holidays, with only 6% saying they’ve increased their spending on travel since the Covid-19 crisis began.
But how does the UK measure up to the rest of Europe when it comes to spending and saving?
Interestingly, our survey showed that, despite demonstrating prudency in their spending, Brits are far more likely to splash out on leisure than their European counterparts, with 45% saying they’re planning on spending money on leisure over the next 12 months.
Conversely, UK consumers are looking far less likely to spend money on home improvements, with only 21% saying they plan on investing in renovations over the coming year, compared to 30% of Europeans.
While spending habits vary even across the UK, depending on personal financial circumstances, it’s clear from our survey that the majority of UK consumers are feeling the pinch right now.
Affordability has always been a key consideration for consumers when making a large purchase, but (now more than ever) it’s essential that businesses have systems in place to help their customers spread the cost of their purchases.
When offered reliable finance solutions that help them pay in instalments over terms that suit their budgets, customers are far more likely to commit to a purchase at point of sale.
As a leading personal finance provider, we create easy to use, flexible point of sale finance solutions to help your customers purchase your products in an affordable way.
Stephen Hunt, CEO of BNP Paribas Personal Finance UK, says: “This report reinforces the importance of restarting the economy and securing the future of businesses across the UK.
“In order to encourage people to resume spending in a responsible way, it’s vital that businesses adapt, and there are a number of ways we can help you make shoppers feel safer.
“Allowing customers to budget and stay in control of their finances helps to restore consumer confidence and encourages people to spend within their means.
“Backed by a global bank, and with over 45 years’ experience delivering financial solutions that help businesses to grow, we’re experts in our field.
“By helping your customers to spend a little, we can work together to rebuild the economy.”
To find out more about how our personal finance solutions can help retailers to provide helpful and responsible ways for customers to make their purchases in-store and online, contact us today.