The impact of COVID-19 has brought about major changes in where – and how – consumers spend their money. As Randy Frederick, VP of Schwab Center for Financial Research notes, “With the economy shutdown, people have had fewer places to spend their money.” Restaurants, movies and sporting events are, obviously, among the hardest hit categories. Yet Seth Carpenter, Chief U.S. Economist of UBS, says this reduction in service spending – combined with the $1,200 stimulus checks sent earlier by the U.S. Government and enhanced unemployment benefits – has triggered an increase in the savings rate. According to the U.S. Commerce Department, the personal savings rate (the percentage of people's incomes left after they pay taxes and spend money) jumped to 25.7% in second quarter 2020. That’s more than triple the 8.1% rate in Q2 2019.
Among the product sectors benefiting from fatter savings accounts is home furniture. “Since people are spending a lot more time at home and they have additional savings, they are investing in their homes with home improvements as well as new furniture,” says Stephanie Digeon-Heath, Manager of The Media Audit Customer Care department. “This is great for radio as radio has such a strong story to tell.”
For starters, radio reaches 82% of planned furniture purchasers and these furniture purchasers spend more than 2.5 hours a day with radio, giving it the largest share of the media day among traditional media.
According to Coresight Research, Millennials (those born from 1981-1996) are now the largest consumer group. Millennials just edge out Gen Xers as the largest cohort for planned furniture purchasers. “Again, this is good news for radio as Millennials are heavy radio listeners” says Digeon-Heath.
TV garners substantial retailer furniture dollars and radio works well with TV advertising in reaching those furniture purchasers who watch less than an hour a day of TV, Digeon-Heath points out. Radio reaches 80% of Americans who don’t watch TV or watch less than an hour a day, while online radio reaches 82%. “Over-the-air and audio streaming combined reach 95% of planned furniture purchasers who watch less than an hour a day of TV,” she says.
The Media Audit’s online survey of 60,000+ respondents shows the importance of streaming audio is only going to strengthen. One in five planned furniture purchasers own at least one smart speaker and another 23% plan to purchase at least one smart speaker within the next year.
“Radio, both over-the-air and streaming, is a big part of Millennials’ lives,” Digeon-Heath adds. “Millennials now make up the largest consumer cohort for furniture so the astute furniture retailers are well advised to ensure radio is a significant portion of their media buy.”