Purchasing in a Pandemic

The Strawhecker Group (TSG) and Visa Consulting & Analytics (VCA) teamed up in July 2020 to survey a representative sample of U.S. consumers, and analyzed Visa’s proprietary spend data with the goal of understanding how the COVID-19 pandemic has impacted consumer lifestyles, payment methods, and how behaviors may change after the pandemic.

Key Takeaways

While travel remains hard-hit, Consumers are divided on when and if things will return to “normal.”
COVID-19 has accelerated growth in certain vertical markets of eCommerce payments.
Spending has bounced back but has not yet reached pre-pandemic levels.

CONSUMER SPEND

U.S. Total Payments Volume:
After a sharp decline in April saw a V-shaped spending recovery and reached positive territory again in June, with further a climb into July. Volumes declined 18% in April before returning to positive territory in June.

||Jan|Feb|Mar|Apr|May|Jun|Jul| |---|---|---|---|---|---|---| |Volume|30%|20%|10%|0%|||

Source: Visa Form 8-K Filed September 1, 2020

48% of consumers surveyed decreased overall spending since the pandemic started, but 28% of respondents have increased their spending.

Source: The Strawhecker Group and Visa Consulting & Analytics Consumer Survey, July 2020

VERTICAL IMPACT

Shifts in spending have differed across industries. The image below shows how respondents of the survey have changed their spending habits across various industries since the pandemic began.

Most Positively Impacted

Pharmacy
Online Purchases in General
Healthcare
Personal Services
Restaurant Delivery
General Retail (not curbside)

Most Negatively Impacted

Air Travel
Grocery (curbside/delivery)
Hotel
Grocery (not curbside/delivery)
Dine-In Restaurants

Source: The Strawhecker Group and Visa Consulting & Analytics Consumer Survey, July 2020
Visa reports that U.S. spend in these verticals declined 10% to 50% in April, but recovered to growth by end of June.

U.S. spend in verticals:

||Retail|Department and Business Supplies|Services|Apparel Stores| |---|---|---|---| |Education|Government|Automotive|~|

Source: Q3 2020 Visa Earnings Release

PAYMENT METHODS

CASH
26% of surveyed consumers expect to use cash less after the pandemic than before and 18% expect their use of cash to increase.

Source: The Strawhecker Group and Visa Consulting & Analytics Consumer Survey, July 2020

CARDS
27% of consumers surveyed expect to use credit/debit cards more after the pandemic than before.

Source: The Strawhecker Group and Visa Consulting & Analytics Consumer Survey, July 2020

DIGITAL WALLETS
34% of respondents expect to use mobile/digital wallets more after the pandemic than before and 7% expect their use to decrease.

Most stores do not accept digital wallets.

Source: The Strawhecker Group and Visa Consulting & Analytics Consumer Survey, July 2020
I have privacy and security concerns.

CONTACTLESS CARDS
41% of respondents reported they have a contactless credit/debit card, showing there is room to grow consumer access. Of those respondents, 60% use their contactless card for at least half of their purchases.

Source: The Strawhecker Group and Visa Consulting & Analytics Consumer Survey, July 2020

Growth in Contactless Payments

2020 vs. 2019

Retail
Food and Grocery
Drug Stores & Pharmacy
Healthcare
Restaurant & QSR
Travel
Fuel
Home Improvement
Visa contactless usage is up 40% in Q2 2020 year-over-year.

Source: April 28, 2020 Visa Earnings Release

BACK TO “NORMAL”

Most consumers feel comfortable with social activities such as smaller events and being outdoors, but generally fall into two categories: those that are comfortable now and those that are not.

Average Comfortability Score
Darker = More Popular Response

24% When there is a COVID-19 area for 2 weeks
18% I am now comfortable with protective measures
17% Attending small indoor gatherings with friends and family (10-20 people)
10% Visiting public parks, beaches, etc.

Source: The Strawhecker Group and Visa Consulting & Analytics Consumer Survey, July 2020

Forward Looking Statements

This report contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are generally identified by words such as “outlook,” “forecast,” “projected,” and other similar expressions.