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COVID dampening consumer intentions to buy, new survey says

 24 April 2020     Michael J. Knell 

CALGARY, Alberta – A majority of Canadian consumers planning to buy furniture, mattresses, appliances and other big-ticket items over the next six to eight months have changed their minds, according to a recent survey conducted by Field Agent Canada. Most also said their financial outlook for the next six months was negative.

Conducted last week, the survey asked some 1,100 Canadian to recall what their plans to purchase big-ticket items on 01 March and what they were on 15 April – four weeks after the COVID-19 pandemic was declared.

“In short, over the past month planned purchases of big-ticket items are down across the board as Canadians adjust to the new reality of their household budgets,” said Jeff Doucette, general manager of Field Agent Canada. “In fact, 31% of respondents said their financial outlook over the next six months is negative.”

By comparison, only 25% described their financial outlook over same period as positive.

Chart courtesy of Field Agent Canada.Based here, Field Agent Canada is a mobile research platform that provides shopper insights, mystery shopping and retail audits leveraging its panel of 125,000 Canadians.

According to the survey, 16% of those consumers surveyed said they intended to buy a mattress this year on 01 March. By 15 April, that had fallen to 10%. Similar declines were recorded for major appliances (from 15% to 10%); bedroom furniture (from 15% to 8%); living room furniture (from 14% to 8%); dining room furniture (from 8% to 4%); and, outdoor furniture (from 16% to 10%).

In an e-mail, Doucette told Home Goods Online while the survey did not ask, he believes the drop in intentions was driven by access and budget.

“Big ticket items are more involved purchases and shoppers are used to being able to kick the tires, lift the lid of a washer or see a demo on a television before buying,” he explained, adding, “With showrooms closed, this element is taken away which is likely accounting for some of the drop in purchase intent. However, I do think the biggest driver is budget given the financial uncertainty due to high unemployment and a recession.”

He also believes retailers should use the survey to plot their marketing strategies for when governments across the country begin to reopen the economy and return everyday life to what most agree will be a new normal.

“Retailers will need to be sensitive in their communications as we gradually recover from the COVID emergency,” Doucette wrote. “Promotional events that are ‘big and loud’ should be replaced with messages and events that are about improving your ‘nest’ – the place that protected you during social distancing. A focus on value and quality will be important and for big ticket items, the ability to finance at low interest rates may encourage shoppers back to the showrooms more quickly.”

He also believes furniture, mattress and appliance retailers shouldn’t expect a quick return to the levels of consumer demand felt in the months before the pandemic.

Jeff Doucette“While no one has a crystal ball, the longer social distancing is in effect and businesses are closed, there will be an exponential drag in the timeline to get back to recovery, especially for discretionary big-ticket purchases,” Doucette observed. “Operations will need to become more efficient with potentially fewer staff and showrooms to handle the lower customer counts. Having a lean and efficient operation will allow retailers to pass along value to customers and value will be king over the next 12 to 18 months.”

He also expects consumers will postpone many discretionary purchases over the next year or two as they are likely to make expenses such as rent or mortgage payments, utility bills, food and clothing a priority.

“Retailers may be able to overcome some of this with long periods of no payments and low interest rates but that adds risks to the retailer,” he added.

In what may be surprising to some observers, Doucette doesn’t think consumers will become price sensitive in the post-COVID recovery – value will be a more important consideration. “Retailers should focus on quality and durability to encourage shoppers to trade up from an item that would last ten years to one that would last 15 years,” he believes.

However, he sees trouble on the immediate horizon for the housing market – the primary driver of furniture, mattress and major appliance sales. “The purchase intent for homes over the next six months dropped by almost half, so some of that demand for new furnishings driven by home purchases will be pushed out until Canadian feel safe to jump back into real estate,” he observed, adding there may be some offset by upticks in renovations.

Chart courtesy of Field Agent Canada.While e-commerce players such as Endy and Wayfair will see addition growth thanks to the COVID-19 closures and restrictions, Doucette doesn’t seem to think they will run away with the market as the recovery takes shape.

“Given the high level of financial and emotional investment in big ticket items, the showroom will continue to play a strong role,” he said, adding, “Retailers need to invest in web sites that provide great product photos, have lots of information and genuine customer reviews. By making your web site a go-to resource for shoppers to gather information and compare, you are more likely to make the short list of showrooms visited before they pull the trigger.”

Retailers are likely to notice that consumers will begin to view advertising differently in the post-COVID environment. For example, consumers are favoring digital flyers over printed flyers.

“The COVID emergency may be just what is needed to push the expensive and environmentally unfriendly paper flyer into extinction,” Doucette said. “Retailers that use paper flyers as their primary communication or promotion tool need to ensure they have great digital flyers on their web sites and start to collect opt-in information so they can send digital offers by e-mail.”

He also advises retailers to begin exploring social media tools such as Instagram and Tiktok as a way of communicating with millennials beyond traditional media such as television and radio.

Cocoon by Sealy
Stearns & Foster
This HGO article was written by:
Michael J. Knell
Michael J. Knell

Michael is the publisher and editor of Home Goods Online. A seasoned business journalist, he has researched and written about the furniture, mattress and major appliance industries in both Canada and the United States for the past three decades.

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