Difference in consumer spending, 2019 vs 2020.

A large part of any country’s economy is garnered from its consumers. Consumers play a large tole in the spending on goods and services. Good customer spending means better sales and an improved economy. The way in which a customer spends also affects the brands and companies. 

What is customer spending? 

Customer spending in literal terms means, ‘the total money spent on final goods and services by individuals and households for personal use and enjoyment in an economy’. This includes all durable and non-durable goods and services. It is the largest part of aggregate demand at the microeconomic level. 

Why is customer spending important?

Customer spending is important because it plays a crucial role in determining any nation’s economy. Higher consumer spending indicates higher economic growth. 

Customer spending in 2019

The customer of 2019 was safe, secure and free. They spent according to their needs and wants. The spending style of the customers was free and unabashed. That is why the customer spending in 2019 reached a record breaking, all-time high of 21823.52 INR Billion in the fourth quarter. Consumers used to spend on luxury. They even indulged in unnecessary buying at some point in 2019. The buying style of customers was free and there was variation in buying styles. People bought different products according to their needs and wants. Several industries were benefitted because of this. This unabashed spending by the customers led to the all-time high in the economy. 

Customer spending in 2020

The customer spending styles drastically changed in 2020. This was mainly because the world was struck with a pandemic. The needs and wants of the customers changed. And so, did the buying habits. Because of the pandemic the spending of customers was more focused on the health and sanitation industry. The brands were all promoting health related products because it was the need of the hour. There was a scare among people and they were mainly focused on personal safety more than anything else. The lockdown also restricted unnecessary buying. The household spending of 2020 is 1.2% higher than 2019 and the pandemic is the reason behind this. 

The pandemic, all in all will be affecting the buying styles of consumers until it subsides. Till then, the main focus will be on the health industry.