How does the future look?
A lot like last year.
The previous 18 months have moved us from the office to home, from inside restaurants to outdoor cafes, from in-person to virtual.
But the pandemic has also altered our personal spending in ways that will drive consumer behavior in the year ahead.
A year of living, working and schooling at home has had a cascade of economic effects that aren’t stopping any time soon.
This homebody economy led us to bake our own breads, grow our own gardens and remake our backyards where our pandemic puppies can play in homes that have been fixed up, remodeled and a better fit for our new lifestyle.
Pet boom
The pandemic pet boom, which brought 10 million new dogs into American households doesn’t end when the coronavirus fades. The virus and attendant quarantine chased the market for pet products up 16% to $66.9 billion. Given the average 10-year lifespan for a dog, this peak in sales is likely to hold as the new baseline for years to come.
Even though we spent more time within our own four walls making bread, we weren’t making babies. With an expected 300,000 fewer births, the market for all things baby will decline. And without a strong rebound this will truly be generational for diapers, which will drop another 3.5% in 2021, training pants are coming down 2% and the diaper decline foreshadows reductions in daycare school enrollment and on down the line.
Hunkering down in our homes, we found all the things that used to bother us a little, became unlivable. This led to a long-term home improvement boom, causing a logistical logjam for home furnishings and those that fix them. We bumped out walls, redid carpets and painted rooms. All types of residential home improvement are exploding with an especially strong fencing market aided by the need for expanded private outdoor spaces for COVID-safe entertaining and places to play.
Even with product shortages, spiking prices and long lead times, sales of fencing in the residential market are estimated to have grown about 40% in 2020. Consumers also snapped up outdoor lighting fixtures, building materials, architectural paint and power tools.
For U.S. consumers their idle time wasn’t idle, as they spent unused vacation funds and unused PTO improving their surroundings and accommodating for behavior changes. Houses designed in 2020 had larger kitchens and more bathrooms, and bigger outdoor entertaining space. Consumers slurped up more kitchen amenities, as more meals were prepared at home, larger porches and patios to safely entertain and accommodate guests and visitors, ceiling fans to promote air circulation, and energy-efficient doors and windows and appliances.
Gardening
More green in their pocket also resulted in more green thumbs as gardening helped pass the time and secure access to a healthier food source. More than one-fourth (26%) of adult respondents reported that they had started a food garden, according to a Freedonia National Online Consumer Survey.
Every gardening apparatus saw strong sales from seedlings to planters, pesticides and packaged soil.
On the other side of the equation, the suburban housing market became blistering hot. As demand grew for getting out of the city and suburban supply vanished, new construction is spiking and prices, for plywood, drywall, siding, roofing materials and such accessories as underlayment, cabinetry, plumbing fixtures and fittings and flooring materials.
These are not temporary changes that can be stopped when the coast is clear to leave your home. It isn’t that worker behavior changed, it’s that human behavior did and even when offices open back up, few will return to the days of 5 days a week. After spending more than a year working from home, and not commuting, people realized they liked it.
Now that video chat has proven there is an alternative to travel, in-person meetings and the red-eye, changes are coming for office space, office furniture, office coffee service and below desk-level business attire.
Regardless of when the pandemic is finally put to rest, we will be living in a world shaped by COVID for years to come.
