Article by Ethan Cramer-Flood
Source: www.emarketer.com, December 2020
Insider Intelligence and its eMarketer team generate roughly 1,500 forecasts on digital transformation topics every year. These estimates are mainly produced on an annual basis, with several of the highest-profile metrics reassessed one additional time during the year. However, given the extraordinary socioeconomic disruptions of 2020, we undertook an unprecedented effort to recalculate huge swaths of our pre-pandemic forecasting to generate more accurate projections that accounted for the pandemic.
Valuable insights can now be gleaned by examining the difference between what we thought would happen as of February 2020 versus what we now project for this year and the coming years.
Social distancing drives new trends
The unprecedented social and economic disruptions that affected all areas of life in the US in 2020 also skewed many of our pre-pandemic forecasts.
Due to widespread commercial lockdowns and quarantine-related personal restrictions, US consumers overwhelmingly reduced spending on services and entertainment this year (restaurants, bars, salons, travel, events, education, etc.). This in turn led to an unexpectedly strong outcome for spending on retail goods, as households used the suddenly available cash to splurge on consumer electronics, home furnishings, digital groceries, and a range of other products.
Despite a strained economy, high unemployment figures, and extended recessionary conditions, retail spending unexpectedly held up, thanks mainly to devastating declines in the services sector. The physical reality of social distancing requirements created analogous outcomes across a range of other pairings:
- Sales of indoor-oriented goods and services spiked, while sales of goods and services used outside the home collapsed.
- Ecommerce retailers set records, while some brick-and-mortar retailers went bankrupt.
- Entertainment services that could be accessed at home had a banner year, while out-of-home (OOH) entertainment revenues cratered.
- Demand for essential goods boomed, while demand for some discretionary products wobbled.
