It doesn't take a surfeit of smarts to recognize that most consumers will think twice before splurging on a designer handbag or OLED-display TV during a recession. The challenge is in figuring out what, beyond household basics, they will spend money on, and how long any change in purchasing habits will last.
Granted, even in a recession, there are always people who can afford a luxury bag or top-of-the-line TV. In fact, people who were already wealthy going into a recession may very well see their wealth grow during a time when everyone else's is shrinking. But the financial uncertainty wrought by COVID-19 means most consumers need to reevaluate the necessity of even garden-variety purchases — and everything from a new set of tires to the continuation of a gourmet coffee shop habit is up for consideration.
To anticipate how consumer spending patterns might change in the face of an ongoing pandemic, it can be helpful to look to the past. But first, a caveat, courtesy of two Federal Reserve Bank of New York economists: "Recessions typically develop gradually over time, reflecting underlying economic and financial conditions, whereas the current economic situation developed suddenly as a consequence of a fast-moving global pandemic." Weare officially in a recession now, but there is an element to our current situation that also makes it a bit like the fallout from a natural disaster. As Ori Heffetz, an associate professor at Cornell University who researches the psychological, social, and cultural aspects of economics, told Wired, "This is going to be the social-distancing recession, and we've had nothing like that before."
All of which is to say, there are a lot of unknowns when it comes to the coronavirus consumer. Comparisons of COVID-19 to the 1918 Spanish flu, the last truly global pandemic (and one that also entailed social distancing) are complicated by a variety of factors: the confounding impact of a world war; that the pandemic hit working-age people the hardest, resulting in labor shortages and wage increases; and the differences inherent in a pre-internet economy.
It's more useful to look at purchasing behavior through the lens of recent history. In fact, buyer conduct is already mirroring that of the Great Recession of the late 2000s… except when it doesn't.
Here's a snapshot: