Home Comfort and Spending by the Numbers
The pandemic has many people anxious to use their dollars to make the most of their time at home. According to data from WalletHub, “Among those 30 to 44 years old, 60 percent said they’ve been comfort buying, but among those 59 and older, just 32 percent have done so.” That behavior is likely linked to the fact that adults in their 30s to 40s face heavy demands in terms of child care and working from home.
- Comfortable clothing sales are up: With many consumers spending more time at home, the public wants to be as comfortable as possible. For example, according to CNBC, sleepwear clothing like pajamas sales has increased by 100% in April 2020 compared to March.
- Junk food consumption is up: People are stuck at home for weeks and months. As a result, it is no surprise that junk food sales are up. According to Self.com, one in three Americans are binging on junk food in 2020. This trend may make America’s already high obesity rate — 42% in 2017-2018, per the CDC — even worse.
- Online alcohol sales are booming: With many bars and restaurants closed, spending on alcohol has shifted to the home. Nielsen reports that weekly online alcohol sales in April increased by more than 400% compared to 2019. This comfort spending pattern may have a dark side. People struggling with alcohol addiction may not be able to access their support network like Alcoholics Anonymous meetings due to pandemic restrictions.
- Streaming services and entertainment soar: In 2019, Americans spent $11 billion on movie tickets. With many movie theaters closed for much of 2020, consumers need to turn elsewhere for entertainment. In Q1 2020, Netflix added more than 15 million paying subscribers, the strongest subscriber growth in several years. Likewise, Disney has added millions of additional subscribers to its Disney+ streaming service.
- Home exercise equipment and services are popular: Most gyms and athletic facilities have been closed. As a consequence, more consumers are turning to home exercise equipment to soothe their anxiety. A report from ResearchAndMarkets.com found that home exercise equipment sales increased by 170% thanks to the pandemic.
Companies that sell at-home entertainment, food, and activities are positioned to perform well in 2020. This trend even extends to companies that sell higher-priced products. Peloton, known for its $2,000 digital exercise bicycles, reported a 66% increase in sales than last year. Also, the company has successfully hosted online fitness events with thousands of people.
Some consumers are also taking advantage of more leisure time to pursue new hobbies. Take home baking as an example. The Economist reports that sales of flour in France are up 160%. Also, online searches for terms like yeast, flour, and brioche have more than quadrupled. Companies that sell cookbooks and baking suppliers are likely to prosper further in 2020 as many people continue to stay home.
Home comfort spending isn’t good news for everybody. For example, the extensive scale work from home trend has caused job losses for many in the service industry in cities like New York. Instead of spending their comfort money on a morning latte, homebound consumers will turn to other options like making coffee at home.
Companies that depend on large gatherings of people are probably going to suffer. Take the travel industry as one example. Relaxing on a Caribbean beach used to be a popular option for relaxation. The World Tourism Barometer reports that Caribbean tourism has fallen by 20% as of May 2020. In the Asia-Pacific region, tourism is down more than 30%. This means that hotels, airlines, and airports are going to suffer lower earnings.
The live entertainment industry is also suffering. This industry already faced the challenge of competing against streaming and digital services. Performances by Lady Gaga, The Smashing Pumpkins, Journey, Snoop Dog, and many others have announced cancellations or rescheduled events, according to Billboard.com. This means that companies that supply staff, drinks, food, and services to concert venues will need to find other customers.
Filling The Hours at Home: The Next Business Opportunity?
As the pandemic continues worldwide, international travel, restaurants, and live events are unlikely to come back soon. If you want to take advantage of this trend, model the at-home comfort success that companies like Netflix, Peloton, and others have found.
About the Author
Bruce Harpham is an author and marketing consultant based in Canada. His first book "Project Managers At Work" shared real-world success lessons from NASA, Google, and other organizations. His articles have been published in CIO.com, InfoWorld, Canadian Business, and other organizations. Visit BruceHarpham.com for articles, interviews with tech leaders, and updates on future books.