The indications from tracking we are running for clients is that it could be a very long the road to recovery for business in Ireland. This is underpinned by the proportion of the population still NOT prepared to get back to what we might call “normal” consumer behaviour, writes John Rogers of RED C Research.
Even before the government announced a return to somewhat stricter conditions earlier this week, great swathes of the Irish public remain very cautious as they go about their lives for the next four weeks. The extent of this concern and the impact that this has on consumer behaviour puts real barriers up for both the economy and brands as they struggle to recover.
The government has this week called for people to avoid public transport over the next 4 weeks, but even before this decree over two thirds of the population (68%) suggested they would avoid using public transport if at all possible. The impact for city centre economy and retail/restaurant locations is significant, with a large proportion of visitors using public transport to access these shops and restaurants.
Likewise, 2 in 5 workers were suggesting they would avoid a return to work in an office, shop or site, even before the government again asked people to stay at home if at all possible. Outside of the impact that some argue office collaboration has on firing the engine of the economy, the impact of the loss of workers from city centres and business parks, is in itself devastating to the shops, cafes, restaurants and retail outlets based there.
Even without the barriers of access, over 1 in 4 (29%) still suggest that they would avoid visiting retail shops anyway, with the rapid move to online seen throughout lockdown very much continuing. This unfortunately suggests that bricks and mortar retail will remain under severe pressure in the months ahead.
On top of this is the change in behaviour among those that are prepared to use retail is forcing further change and costs for retailers. Far less people are willing to use cash in shops when they do visit, in fact over 2 in 5 (46%) would avoid using cash, in the future.
Our economy is also hugely reliant on inbound Tourism, which has been decimated by a very short green list and tough quarantine requirements. The push has been for Irish consumers to holiday at home and try to bridge the lost revenue from incoming tourists. But many consumers remain very cautious with the majority (58%) still suggesting they would avoid staying overnight in a hotel in Ireland.
The green list currently limits where people can travel without quarantine on return, and government have advised people that it is safer to stay at home. The impact on our airports and airlines and all the associated economic business that support these is crippling. With the advice in place, over 8 in 10 Irish consumers (83%) say they would avoid or simply not get on a plane in the next four weeks. Numbers at Ireland’s five main airports are down 98% on normal capacity, while Ryanair has cancelled 30% of flights in its schedule. These companies can’t continue to survive in the longer term at this level of business.
Business and marketeers are going to need to find ways to encourage consumer spending and tap into the “Covid charged” accelerated move online. In particular, the need to target and unlock the grey spend through new channels is clearly highlighted by the research. Those in older age groups are of course most at risk from the virus, so it is not a surprise that this group is most resistant to getting back to normal behaviour. But this is also tying up cash that would otherwise be helping drive the economy to recovery.
It is clear any government advice in terms of curbing behaviour to stop the spread of the virus, also has a secondary impact of breeding further caution among the public, even in areas where restrictions haven’t changed.
As such, the balance between health and hospital capacity, vs. the ability for the economy to function of course remain at the forefront of debate. Any increase in limitations on behaviour for health reasons, have a multiplied impact on economic activity.
Clearly we need to protect the public from the impact of the virus, but in the longer term there is an argument that we may need to take a more balanced long term view, building on how we as a country learn to live with a virus that isn’t going anywhere soon, and so avoid or at least mitigate a possible long and heavy recession.
John Rogers is Research Project Manager, RED C Research