Collage Group members have been asking two central questions as we head into the new economic reality of COVID-19.
First, how can we forecast the economic impact of COVID-19 on the US economy and how will it impact different consumer segments? Can we learn anything from the Great Recession? And second, how are consumers reacting in each major category? Will they trade-down to low price brands? Will they defend certain categories of spend?
As part of our ongoing research into the impacts of COVID-19, we revised how we model our annually revised ten-year forecast and deployed our third COVID-19 survey to understand where consumers are making trade-offs. More detail is included in the attached download and webinar playback, as well as in detailed category playbooks released last week. Our top conclusions follow:
Fill out the form to download an excerpt of our Hispanic consumer insights.
Conclusion 1: Multicultural consumers matter even more in a downturn than in good times.
Modeling the effect of the COVID-19 on the economy will occupy the minds of the world’s greatest economists for some time to come. While we have no skin in that game, we do have a perspective on forecasting efforts.
Comparing the guaranteed population growth of the multicultural segments to the negligible or even negative populution growth of the white segment virtually guarantees that these segments will increase in relative importance to the white population. This means that even as total expenditure and median multicultural household can decline precipitously in a recession, the multicultural share of expenditure can only grow. The chart below shows what happened in the last recession and what would happen by 2025 if the impact of COVID on the economy exactly mirrors the Great Recession.
The real issue is not how deep or severe the impact will be, but how long it will last. And how long it will last is a product of the financial support consumers need to weather the storm and how comfortable they will feel about resuming normal life in more densely crowded environments (effectively a proxy for mitigating factors such as a social distancing, therapies for COVID-19, a vaccine, etc).
Check out our custom solutions “Size of Prize” analysis for more detail about how to apply our modeling work to your proprietary brand and category needs.
Comparing the guaranteed population growth of the multicultural segments to the negligible or even negative populution growth of the white segment virtually guarantees that these segments will increase in relative importance to the white population. This means that even as total expenditure and median multicultural household can decline precipitously in a recession, the multicultural share of expenditure can only grow. The chart below shows what happened in the last recession and what would happen by 2025 if the impact of COVID on the economy exactly mirrors the Great Recession.
Conclusion #2: Consumers are revealing a remarkable level of optimism and resilience in the face of this crisis.
In our recent survey of states of mind, consumers are certainly revealing high levels of stress, but also indicate a deeper focus on self-care and on healthier eating.
Conclusion #3: Consumers across race and ethnicity are making very different brand choices across categories.
Asian consumers will be more likely to focus on quality – which is an opportunity to promote superior features and benefits or some premium brands. White consumers will stick with brands they know they like, while Multiculturals in general reveal a greater willingness to defect to a different brand. Hispanics in particular will be trading-down to low cost brands almost across the board. Indeed Hispanics will only be defending spend on groceries and perhaps home care.
The Latest COVID-19 Insights
Reading Time: 5 minutes. Pride Month serves to recognize and celebrate all LGBTQ+ people while also honoring the incredible achievements and contributions of the community.
Reading Time: 3 minutes. At Collage Group, our business is to celebrate the diversity that is transforming America. When it comes to Pride Month, we stand with the LGBTQ+ community in celebration of their many contributions to our culture, their many allies, and the brands that support them.
Reading Time: 4 minutes. June provides opportunities for brands to connect with American consumers through LGBTQ+ Pride and Juneteenth celebrations.
Reading Time: 3 minutes. Discover LGBTQ+ Consumers’ unique perspectives and motivations through their evolving demographics, complex identity, and actionable Group Traits.
Reading Time: 2 minutes. Holidays and occasions are focal points for many – learn how LGBTQ+ Americans celebrate Pride Month and what the occasion means to them.
Reading Time: 3 minutes. Holidays and occasions are focal points for many Americans—opportunities to connect with loved ones, and maintain cultural and family traditions.
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Collage Group is a certified Minority Business Enterprise (MBE)
Understand & Embrace LGBTQ+ Terminology: A Pride Month Celebration
Authentically engaging and supporting the LGBTQ+ community is about more than saying the right word to refer to the right person, it’s about dignity and empathy.
Terminology is really a matter of respect: saying I see you, and I affirm your identity.
After attending this webinar, you will walk away with enhanced vocabulary and insights for cultural resonance beyond specific groups to Cultural Fluency across many. Happy Pride!
