CATEGORY / Strategy

Quarantine-Pandemic Deficiency Effect

Why consumer spending has uniquely shifted during the COVID-19 pandemic.

“There are decades where nothing happens; and there are weeks where decades happen.” ― Vladimir Ilyich Lenin

COVID-19 has radically altered life for people around the world. It has also radically altered the trajectories of businesses everywhere.

Some companies are fighting to survive.

Some are holding steady.

And some are reaping unexpected rewards.

No one is sure how long this pandemic will last and how severe the effects ultimately will be. But we now understand it might not be short-lived.

And so, even if people and life might expect to return to their “normal” state post-pandemic, businesses everywhere are now asking the same question: What do I do now until a recovery occurs?

Strategic planning to operate within this pandemic requires an understanding of how it is both similar and different from what we have experienced in the past.

COVID-19 in context: similarities

Like other recessions, the COVID-19 pandemic has resulted in economic tightness, leading in turn to reductions in consumer spending behavior. Not only are people spending less, they are saving more, with personal savings rates at historic highs.


The current pandemic is about more than economic tightness. Attempts to mitigate COVID-19 have produced unique circumstances that are creating a temporary new normal for individuals:

  • Restricted Individual Mobility : state governments have enacted social distancing and stay-at-home orders for many individuals in an attempt to slow the spread and decrease the immediate burden on the healthcare system. These policies have limited people’s movement outside the home and limited their purchase options and activities.
  • Restricted Physical-Social Interaction : The combination of social distancing and mask-wearing have severely limited individuals’ ability to experience life in traditional social settings.
Recovery from COVID-19

A full recovery from the COVID-19 pandemic has three criteria:

  1. Recovery from economic tightness to pre-pandemic consumer confidence and spending power.
  2. Recovery from restricted individual mobility to pre-pandemic freedom and confidence to experience life outside the home without limitations and fear.
  3. Recovery from restricted physical-social interaction to pre-pandemic planned and spontaneous physical interactions.

Recovery along these lines is now tentatively starting as states begin to ease stay-at-home orders and reopen for business (Restricted Individual Mobility), which will likely result in more in-person interaction and an eventual decline in mask-wearing (Restricted Physical-Social Interaction), which hopefully encourages consumer spending (Economic Tightness). However, actions at the state level and surges of illness in some areas suggest a recovery may be experienced in regional spurts as restrictions are turned off and on, which will make immediate strategic moves for both local and national businesses and marketing crucial, not optional.

Consumer spending amidst COVID-19

The current combination of economic tightness, restricted individual mobility and restricted physical-social interaction have resulted in a new reality: consumers are saving more, spending less, and spending differently. The Quarantine-Pandemic Deficiency Effect is forcing individuals to think, behave and spend in unique patterns.

Why is The Quarantine-Pandemic Deficiency Effect forcing individuals to think, behave and spend in unique patterns?


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