Global News
Apr 6, 20204 min read

How Shopping Patterns Change During the Covid-19 Crisis

Isabella Ahmadi

by Isabella Ahmadi

Consumers in the US continue to purchase clothing and accessories while sales of home and garden items are getting an unexpected boost. That’s some of the short-term trends that Klarna’s data has unveiled after investigating its consumers’ share of wallet spending during the month of March. Let’s dig into this data a little further and shed some light on how online shopping behavior is adapting to the coronavirus outbreak.

The past weeks’ turbulence has thrown many companies and brands into an uncertain future. While the virus has already impacted European commerce, the US economy is experiencing this with a slight delay. Travel restrictions, social distancing and large-scale quarantines are measurements that affect businesses. Now, millions of Americans shop online instead of in brick-and-mortar and online retail is predicted to become even more popular.

New times, new shopping priorities.

Fresh data from Klarna reveals insights into how US shoppers handle their spendings. Looking at consumers’ share of wallet spending – a tool to measure what people shop – the fashion segment experienced the biggest boost relative to all shopping categories. Young or old, all have their eyes set on apparel, footwear and accessories, cutting back on purchasing other products. Running shoe labels are especially popular in Klarna’s app. All age groups prioritize buying within the fashion category in late March, but the trend is especially strong among Millennials and Generation Z.

The lipstick effect – the theory that consumers buy less pricey cosmetics instead of luxury items during times of crises and economic recession – does not seem to have had an impact on the health and beauty segment so far. The share of wallet is stable except for Millennials who are the only age group increasing their spendings in that category.

At the same time, ticket sales have plunged. The drop is most likely due to social distancing measures taken in society. Entertainment is another struggling segment, with Millennials and Gen Zers in particular cutting back on this expense.

No place like home.

The younger generations plus Generation X used a larger share of their wallet on home and garden products, suggesting they will spend more time at home in the coming weeks. Furnishing stores are getting a boost. For example, desks and couches are popular items to buy. Other items included in this category are, among other, kitchenware, plants and cleaning and sanitary products.

It’s not just interior design and comfort that attract shoppers. Consumers also seem to embrace their creative side and explore DIY projects. For instance, they purchase paint and tools, suggesting that people are starting to upgrade their home environment. Spending more time at home could have led to a sense of urgency in improving the house.

Shoppers come back for more in the app.

It’s not only what consumers buy that is changing, but also how they shop that seems to be adjusting to the new reality. Normally, Fridays are yaydays for shopping in the Klarna app. But the recent trend shows that the difference between weekdays isn’t as strong anymore. People seem to spread out their purchases during the week more than before. One explanation could be that consumers have a higher need of buying online. The shift might also suggest that consumers find time and place for online shopping during other days.

During the month of March, data suggests that shoppers really appreciated purchasing their items through the Klarna app. One week in particular, (after the Covid-19 outbreak) had an all time high number of returning customers, substantially increasing from the last week of January. Customer loyalty is key in the competitive online market, and a seamless, inspiring app experience is crucial. Actually, 58% of US shoppers state that a good customer experience is a top driver of loyalty.

Are changes here to stay?

As the data shows, e-commerce has undoubtedly been impacted by the coronavirus outbreak, whereas the full effects are still to be determined. Online shopping behaviors are constantly changing as the environment around consumers evolves and the economy suffers from constraints. The short-term trends point us in the direction of a new era of consumer behavior – but the question is, will it last even after the crisis is over?

Some experts believe the changes are here to stay and that online retailers will come out on the other side as winners. One theory is that consumers will live a new normal when the Covid-19 crisis ends, suggesting that online shopping will become even more important in society. If changes are permanent or if new shopping behaviors are cemented is yet to be seen.

About the data

Klarna looked at purchases made by users both through retail partners and through the Klarna app where consumers can shop from any online store. The company analyzed purchases by shoppers in the Gen Z (ages
18–23), millennial (ages 24–39) and Gen X (ages 40–55) demographics over the weeks of March 22–28 and March 15–21 as well as a base period of February 1–March 7, 2020.