BCG Consumer Spend Pulse #5: Looking up from the bottom

Our data scientists are continuing to analyze a growing number of high-frequency indicators to monitor trends and anticipate the shape of the COVID-19 demand curve across categories, countries and companies. This article shows the trends in the United States and UK based on weekly credit card data for hundreds of thousands of consumers up to the end of March.

Insight #1: Precipitous, across-the-board declines last week

The last week of March saw a dramatic deceleration of US consumer spend across almost all categories. The declines last week were stunning and all-encompassing. Every category we tracked except Amazon and DIY saw a deceleration in growth rates relative to the months before the crisis. Unlike in previous weeks, even grocers and other food/drug/mass retailers saw declines.

Insight #2: Similar progression across US vs. UK

We have also started tracking cases and spend by category in the UK. Over the course of March, the curve of infections and spend curves in key categories have evolved remarkably similarly across the US and UK, suggesting a link between the advance of the epidemic and spending patterns across geos.

IMPERATIVE: Looking up from the bottom

What are YOU doing to monitor high frequency indicators to inform decisions you will need to make, such as what products to order when from your suppliers, when to restart marketing campaigns, when to reopen stores or when to restart promotional activity.

A starting list of indicators our data scientists at BCG and our clients are following are below – what are ones you have found especially helpful for your business (share your ideas in the comments)?

To show what these rapid scenario modeling dashboards can look like, check out this link that showcases a tool our data scientists have built to anticipate the spread of COVID-19 at geo level: https://www.bcg.com/industries/health-care-payers-providers/insights.aspx?video=243153&anchor=tcm-9-212189&redir=true#tcm-9-212189

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This is the fifth analysis of our consumer spend series. To read the previous versions, please visit – first analysis, the second analysis, the third analysis and the fourth analysis.

ABOUT THE AUTHORS

Mark Abraham is a Managing Director & Senior Partner in BCG's Seattle office. He leads BCG's Marketing & Sales Practice in North America as well as BCG's Personalization & Digital Marketing teams globally.

Aaron Arnoldsen is an Associate Director and AI Software Engineer in BCG's Seattle office and a leader on BCG's GAMMA team of over a thousand data scientists and engineers.

Appendix: Data and methodology

This study is based on BCG GAMMA data science analytics, leveraging credit card spend data compiled by Earnest Research, other sources and also BCG internal estimates. The categories are as defined below:

·       Airlines: airlines like United, Southwest, etc.

·       Amazon: Amazon, Amazon Prime, Amazon Prime Now, Pillpack, Amazon Fresh, Zappos, Diapers.com, Kindle and a select few smaller Amazon properties. Does not include Whole Foods.

·       Apparel & Accessories: Broad range of apparel brands like H&M, Zara, J Crew, The Gap, UnderArmour, A&F, VF, Urban Outfitters, Ralph Lauren, Tapestry, Levi’s, Luxottica, Lululemon, etc. luxury accessory brands like Gucci, Louis Vuitton, etc. and jewelry brands like Tiffany’s.

·       Auto services: auto services like AutoZone, Advance Auto Parts, Pep Boys, Juffy Lube, etc.

·       Away-from-home Entertainment: mostly covers cinema chains like AMC and Regal, as well as other venues like Six Flags and Dave & Busters.

·       Beauty: beauty chains like Ulta, Sephora, The Body Shop.

·       Car rentals

·       Club chains: club stores like BJ’s, Sam’s Club and Costco.

·       Convenience stores: convenience stores like Kwik Stop.

·       Cruiselines: cruiselines like Carnival and Norwegian.

·       Department stores: Higher end (e.g. Neiman Marcus, Nordstrom, Saks Fifth Ave, Macy’s) as well as mass (e.g. Kohl’s, JC Penney, T.J. Maxx etc.).

·       Dollar & discount stores: Dollar and discount stores like Big Lots, Dollar Tree, Family Dollar.

·       DIY: DIY retailers like Home Depot and Lowe’s.

·       Electronics retail: electronics and gaming retailers like Best Buy, GameStop.

·       Fitness: fitness chains and brands like Orange Theory, SoulCycle, Peleton and Planet Fitness.

·       Home & furniture: homewares stores like Bed Bath & Beyond and furniture stores like Restoration Hardware.

·       Hotels

·       Grocers: Largest grocery chains (including in-store and online sales for those brick and mortar grocers) owned by Kroger, Alberstons, HEB, Giant Eagle, also includes Whole Foods.

·       Mass retail: mass retailers like Walmart, Target, includes their online businesses like Jet.com for Walmart.

·       Media & books: Barnes and Noble as well as media companies like Netflix, NY Times, Hulu, Spotify and WWE.

·       OTAs: online travel agents like Expedia.

·       Pharmacy: pharmacy chains like Walgreens, CVS, RiteAid, etc.

·       Restaurants: broad coverage of largest QSR and casual dining chains.

·       Rideshare: ride-share companies like Uber and Lyft.