What Piper Sandler’s consumer survey means for retailers post-COVID

A recent survey released by Piper Sandler, which assessed consumer behavior changes amidst COVID-19, concluded that most respondents were generally optimistic about the economy, more than half are spending less since mid-March, and 55% of consumers don’t expect to return to normal spending behavior for >6 months after COVID-19 concerns fade. The Final Round panel breaks down the survey and discusses what the survey means for retailers in a post-coronavirus world.

Video Transcript

- Time now for our call of the day. Today we're looking at Piper Sandler's latest consumer survey on how habits have changed in the time of COVID-19. The firm running through a number of the areas that I know are of most interest, I think, to each of us individually and certainly, the investment community-- the shift to online shopping. Are people going to go back to restaurants? What are they spending money on at all?

But I think the big headline for me here, Jen, that stands out right at the top, which is that respondents now expect things to go back to, or rather, they're spending to go back to normal levels in seven months time. That's up a little bit from the 5 and 1/2 months that we thought in April. And so if we do the math here, essentially, consumers are telling Piper Sandler they'll be back to spending at levels they would consider normal by the time Christmas rolls around, not Halloween.

- Yeah, and that is pushed out. But still, I mean, as long as they get their spending back to where they're going. What I think is interesting here is to dig in to the mix, right? It's like how are you-- you think you're going to be spending the same amount of money, but they're telling Piper that they're going to be spending it on different things. So the stay at home trade, what has that done? We've talked before about some of the athleisure trends. That is front and center in here again. Lulu, Nike, yet again, those names here are picks.

Then you also have the home improvement and the home furnishings with more people working at home. Saw Home Depot-- all time high. This is like, you're going to be spending money. You're going to be spending it differently though, is what they're saying here. You're going to be cooking at home. So we have some of those names doing well. I will point out that they put Campbell's soup in there, which today in this little rotation we're seeing, is off some 4%. So I don't know. Maybe people didn't tell them the truth about how much soup they were going to be imbibing come Thanksgiving.

- And guys, when you look at the spending expectations here and the report, as with many of these consumer based reports over the last, I guess, 2 and 1/2 months already or two plus months, there are some things that are not at all surprising. That if you watch the markets or watch business news at all, you would believe is what would naturally happen. And then there are the things that are kind of personalized enough that maybe it's surprising based on your own habits.

So Nike, not surprising. Lulu, not surprising. We've talked about these companies a lot during the quarantine. We've talked about how resilient they'll be because they have devotees who we're willing to spend money. We know that in Nike's case the e-commerce is very strong. Netflix, remaining the top dog in streaming-- not very surprising. We can talk so we're blue in the face about the recent gains of Hulu, because Disney added the FX library. Or Disney Plus. Or, you know, the failures of Quibi. But, it's like, the king stays the king-- of course Netflix is still the first thing people think of.

That said, there are some surprises in here. But maybe they are only surprises to me. Crocs and the momentum--

- Oh, that's what I was going to bring up. Yes.

- Well, you know, and they argument counter makes as well, comfort is going to continue to be important, so the outlook is good for Crocs. I never had interest in wearing Crocs any other time in my life and I don't have any interest in wearing them now during quarantine. But, you know, look.

And then with cereal, too. I mean, you're either someone who already ate cereal-- this is what I would think-- and you're still eating it now during quarantine. It's just hard for me to imagine a large number of people are now turning to General Mills. And then finally another one that surprised me was the idea that Best Buy is going to benefit big right now.

I mean, I think that, Jen, I know you're kind of a big Amazon flag waver. You're either someone who buys such things on Amazon or you have-- or your Walmart.com. You sort of have your place you go to. I mean, I don't think, unfortunately, and I remember years and years ago going into Best Buy, but I don't think in five years I've gone into a best buy or bought something online at bestbuy.com.

- So, on a couple of those points. I know, Jen, you called out Dan so-- or Dan you called out Jen.

- Yeah, Gladly.

- Jen, defend yourself. Two points on Dan. Go Jen.

- I was just going to say, I say even on my Instagram profile, I am a recovering Amazon addict. I have changed, Dan. I try and spread my money around. I have indeed bought something from Best Buy very recently even. So--

- What was it?

- I am not all in. It was a Chromebook. There you go.

- Well, also all the gear that I am using now to make this a better broadcast I bought on Best Buy. And I would never have dreamed of going on Amazon, because Amazon is a nightmare when you're trying to find anything. You don't know if it's a real thing-- anyway. The point about cereal, of course, is hilarious. I haven't been in a grocery store in like six weeks. But I happened to go in one yesterday. And I went in the cereal aisle and what did I do, Dan? I bought cereal. I never ever eat cereal.

But I said, hm, I could use some cereal right now, because it's something that's familiar and, as you know from my fiance's Instagram, every meal is quite elaborate. I'd like something simpler. Something that I could just open the box, dump the cereal in, and then that's it. That's the whole meal, instead of like an hour long process.

- Now what's interesting about that, and one other note I wanted to mention on the Cowen report, we've talked also about whether the stay at home cooking bump will finally spell a turnaround for Blue Apron. And I believe we had the Blue Apron CEO on saying, you know, oh, another middling quarter. But next quarter we expect the numbers to be good, because people are staying at home cooking more.

You would think or I would think that cereal is an on the go thing when you don't have as much time. Right now when you're at home you've got a little more time. I would understand if more people were making eggs in the morning, whereas in the past they have cereal. Or making coffee by hand instead of a quick--

- Yeah, but--

- --shot from the Keurig.

- I think something I've been thinking a lot about more is like, we just had so much energy for quarantine when this first started. That we're going to make eggs in the morning and we're going to hand grind our coffee. And we're just-- it's just wearing all of us down and I think in a different way and we're defaulting back to some things that are more normal. We got to go. I was shocked that 47% of people said they'd go back to a restaurant though. I will not be going back to a restaurant anytime soon, but that is just me and we all make our own choices.