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What have European consumers been buying during Covid-19 lockdown

author headshot Written By: Ken Byrne (CEO & Founder, Red Sky Europe)
Category: Leadership & Growth

Contributed by Platinum SUBTA Resource Partner, Red Sky Europe

 

With the world retail industry shattered by the COVID-19 global pandemic, spend has shifted massively into the eCommerce space. Information retrieved from bank cards is a clear indication of what consumers are purchasing in recent weeks.  

New data shows a significant increase in revenue generated from home fitness products, gaming, and streaming services since coronavirus restrictions were introduced. Spending on air travel and accommodation has plummeted, and data shows similar trends across most of Europe.

As cited from The Irish Times, an analysis of debit card transactions by Bank of Ireland tracks debit card spend since March 12th and compares it with the average spend before restrictions being implemented from January 1st to March 11th.

 It showed that retail spend during the period was buoyed by online activity and a 37 percent increase in grocery shopping. While overall debit card spending was down by 25 percent, retail spending shifted online with significant increases in clothing, gaming, electronics, household appliances, home fitness products, and streaming services.

Reflecting on the unprecedented changes to public life across Europe, spend on air travel, passenger travel, and accommodation dropped over 80 percent. Restaurant spending was down 69 percent as the recent trend towards a food delivery model continues.

Bank of Ireland director of products John O’Beirne said the changes to consumer patterns reflected the “new normal” in Irish society since the Government introduced restrictions on movement.

“COVID-19 has changed our lives immensely, impacting health, social interaction, travel, and also affecting the livelihoods of many,” he said.

“Our data, which tracks debit card spend in March once the schools closed, demonstrates the importance of card services in the current environment, with retail activity driven by online and grocery sales. Shoppers are responding to the new normal, adapting behavior and spend on their personal circumstances. As we continue to travel less, we are looking for more ways to keep ourselves and our families engaged, and spending habits are clearly reflecting that trend. Home exercise and entertainment are being prioritized, while spend on travel and restaurants has dropped significantly in line with the required restrictions.” Mr. O’Beirne added that a “significant proportion” of the bank’s customers seeking mortgage breaks were doing so online.

“The people and technology supporting payment services are the engine-room for retail sales, and our colleagues are working 24/7 to keep cards, payments, online and a range of other services running,” he said. “Our digital channels are extremely busy, with a significant proportion of those applying for a mortgage break doing it through our website. We will continue to ensure these critical services are resourced appropriately, providing stability for consumers and businesses to transact during this challenging time.”

Separately, digital bank N26 said there was a decrease of 56 percent in ATM transactions since the lockdown to deal with Covid-19 began. It said e-commerce now makes up 7 percent more of the average consumer’s spend than it did four weeks ago, while consumer spending has increased by an average of 16 percent per transaction. In weeks one and two of the lockdown, grocery stores were the strong players, along with Amazon, Apple.com, and its various subscription offers, such as iTunes, iBook, and iCloud. This shifted in weeks three and four to include media-service providers such as Netflix and food delivery services such as Deliveroo, both now among the top 10 merchants. Travel, urban mobility, nightclubs, and out of home entertainment fell well down the list.

With reduced outside-shopping time and very few shopping options available, payment volumes fell less than the number of transactions, with people making fewer purchases but spending more each time.

“Traditional retail growth predictions for Q3 and Q4 remain uncertain, but we can confidently say that the eCommerce industry will continue to flourish on a global scale as consumer behavior evolves further.”

 

 

Written by Ken Byrne, CEO & Founder, Red Sky Europe
Learn more at Redskyeurope.com

 

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