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The state of consumer spending: Implications for financial institutions

Are pandemic spending habits here to stay?

Consumer behavior and spending habits have changed significantly since the start of the pandemic — because of circumstance, necessity, or by choice. As states lift stay-at-home orders and businesses begin to re-open, the big question is: will consumer spending follow?

While everyone is eager to get the economy back on track, there are lasting concerns about financial stability, health, and safety that continue to hold some consumers back. Pandemic-related changes in spend and behavior will likely prove to be more permanent than most originally thought.

These potentially permanent changes to consumer spend behavior have major implications for financial institutions, highlighting the need to understand customers and rethink branch and digital offerings. This report covers changes in spend and future outlook that can be used to influence everything from operations to loyalty and rewards programs.

To take a closer look at how the COVID-19 pandemic has changed consumer spending, Hero Digital surveyed 1,600 people in May 2020 to learn more about their behaviors and preferences.

Some key insights from the latest findings…

  • 36% of respondents reported spending less than they were three months ago
  • Affluent consumers are more impacted by a loss of spending opportunity, while lower income customers are more likely to be saving intentionally
  • 87% of respondents said that, in the future, they plan to spend the same or less than they’re spending during the pandemic
  • Those living in regions with a lower rate of infection are more comfortable with resuming social spending