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UNDERSTANDING CHANGING CONSUMER DYNAMICS IS CRITICAL AS WE FACE A SECOND WAVE OF COVID-19


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COVID-19 is having a profound effect on just about every aspect of our lives; the impacts are far from over and could be compounded as many nations hover on the brink of a second wave of the pandemic. This makes now a critical juncture to consider how consumer dynamics have changed during the course of the pandemic so far, how the consumer relationship with digital services has shifted, and what worries consumers most about the future. In 1H20, Omdia conducted a survey among consumers in the UK, US, and China and a forthcoming report explores these issues and more, surfacing insights that will help service providers, vendors, and other stakeholders better navigate uncharted terrain.

Usage of digital services has risen across the board during the pandemic, in some cases, to a dramatic degree. Group video conferencing services have received a huge boost as millions of employees and students have become home workers and learners. Over half of our COVID-19 survey respondents have increased their use of group video calling services. At the same time, a high proportion of consumers are using messaging apps more as a result of COVID-19, underlining the central role that these apps play in consumers’ daily lives. Indeed, for China and the UK, usage of messaging apps is even more amplified than group video calling. This is likely because messaging apps also enable VoIP and video calling, including group calling.

Lockdowns, travel restrictions, and social distancing has had a catastrophic impact on physical retail but has benefited e-commerce as more consumers than ever before shop online. The survey underscores these shifting dynamics, with 53% of respondents having increased online shopping for non-grocery products during the pandemic, while 42% have done likewise for groceries.

COVID-19 has confined people to their homes for prolonged periods, with expanded time on their hands and the need for resources to keep them occupied and entertained. In these circumstances, it is not surprising that over half of survey respondents have increased their usage of online video subscription services. Omdia predicts total number of subscriptions to online video services such as Netflix will be 3–8% higher in 2020 than predicted by our pre-COVID-19 forecasts, passing 1 billion and generating $65–68bn in revenue.

Although surges in digital service usage will be expected to normalize as COVID-19 subsides, between a quarter to just over a third of respondents intend to maintain increased usage levels for news and health information, online shopping, online video subscription services, and group video conferencing. This is a highly significant boost for the services in question. Plans to maintain increased usage for other services such are less dramatic, notably apps to help with home working and education. This likely because as COVID-19 abates, more people assume they will be back in the office or in the classroom.

When it comes to the bigger picture, people are most acutely concerned about the negative impact of COVID-19 on the economy, how long the pandemic will last, ability of health services to cope, and government competency. These fears will be amplified as we face a second wave of the pandemic and particularly for many people in the UK and US, which according to the Omdia survey are far less confident than Chinese respondents that their governments will lead them out of the crisis.

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This report was contributed by knowledge partner, OMDIA.