Our newest McKinsey Global Institute (MGI) report on consumer demand after COVID-19 has something for everyone. It offers big-picture economic analysis across five countries, along with deep dives into the details of daily life: what we eat for dinner, how we exercise, what we do for fun.
Sydney Bub, Henry Pollock, and Maciej Latocha were part of the MGI research team that produced the report. They helped to identify six case studies in areas that reflect a broad swath of daily consumer life and three-quarters of consumer spending: e-grocery, virtual healthcare, home nesting (investing in products and services that improve the experience of being at home), leisure air travel, entertainment, and education. The team analyzed nine consumer segments, based on age and income, in China, France, Germany, the United Kingdom, and the United States. And they devised a ‘stickiness’ metric, earmarking the economic, emotional, and social factors that help make a behavior last as times change.
The report also features many of the ingenious ways organizations reached out to their customers during the pandemic. The top line? E-grocery, virtual healthcare, and home nesting are here to stay and likely to grow; leisure travel and dining, which have been dramatically curtailed, will resume with some changes; and kids will definitely go back to the classroom when it’s safe.
To learn more, we caught up with Sydney, Henry and Maciej. They gave us a behind-the-scenes look at the findings and reflected on the ways the pandemic has changed their own lives.
The case studies I covered were virtual healthcare, remote education, and entertainment. When I reflect on this past year, my favorite innovation has been the increased use of outdoor space by gyms, cultural institutions, and restaurants.
I personally love to work out and many of my favorite studios have begun offering classes with disco headsets for outdoors, from bootcamps on lawns to spinning on patios, that don’t disturb neighbors. This will definitely continue post-pandemic as the classes have been so popular.
Similarly, a number of museums and galleries are offering outdoor and drive-through exhibits. My parents live in California and went to the Field of Lights, a solar-powered exhibit recreating a field of poppies, the state flower of California. It covered acres—there were glowing poppies everywhere, and it was designed to be COVID-19-safe and sustainable. There are other examples: in Toronto, Van ‘Gogh by car’, in Sao Paulo, a drive-through exhibit set up with in-car audio.
Museums are also using digital in creative ways. Since they couldn't host student tours, a museum in the UK began sending museum in a box to schools, with carefully chosen objects on loan. Students can engage with materials while doing an online tour. Last June, when The Brooklyn Museum knew they wouldn't open their doors for months, they collaborated with Netflix on a stunning digital exhibit of costumes from “The Crown” and “The Queen's Gambit.” The costumes could actually be more easily seen in the well-lit, beautifully designed virtual rooms; normally costume exhibitions are held in dark rooms to preserve the clothes.
These alternative settings offer benefits such as highlighting difficult-to-show pieces, offering more information, and reaching new audiences, that I think make them likely to “stick” post-COVID-19.
I focused on leisure travel, e-grocery, and home nesting. When I think back on consumer life this past year, it's nothing short of amazing to have gotten so many older people online. This is a complete cohort, some of whom had been on the sidelines of the digital world, that is now very adept at online shopping, exercise classes, and video calls.
One reason is because of the expansion and accessibility of online instructional material—tutorials on social media, videos on YouTube, and other sites. This, combined with people having the time and opportunity at home to learn, has brought the majority of an entire generation’s lives online in less than a year. They have developed skills that will help them feel more connected and functional in our post-COVID-19 world, where our research shows that services such as telehealth and e-grocery will remain strong.
Digitization and remote working also allowed people to move away from their office locations, often in urban areas, and live in places they preferred. I moved to a small mountain town in Idaho—2,500 people—for a more active outdoors life this past summer and know a number of “digital nomads” who made similar moves to Texas, Nevada, and North Carolina.
On a more casual note, a small but fun innovation has been the use of QR codes in place of menus in restaurants. I remember thinking: “Wow, I can’t believe we haven’t done this before.” It integrates seamlessly with our phone, a medium that for better or worse, is an extension of our selves. You can get far more information, from photos to listings of ingredients and nutritional data, and then order and pay. It provides a level of experience that's impossible to replicate with a simple paper menu or chalk board on a wall.
I did the overall economic analysis for the report. The case study that felt most personal to me was the home nesting. This trend is very interesting to me. Over the last ten to 20 years, as economies were doing well, people were spending more time out of the house on entertainment. As we know, that changed instantly last March when everyone, everywhere was suddenly forced to stay home. We saw a significant investment in furnishings, technology upgrades for work, learning and entertainment, gym equipment, and outdoor spaces. It was one of the bright spots in consumer buying. Because of this material commitment and the increased availability of better entertainment and streaming services, we think there will be a strong incentive for people to spend more time at home post-COVID-19.
I saw this in my own life. With restaurants and bars closed, I’ve learned how to cook, and ordered takeaway more than I did prior to the outbreak. Some restaurants have been very creative in devising entire dining experiences-in-a-box, with food, table décor, cocktails or wines, and even music playlists. That is a change I think is likely to stay.