Survey: ‘Home nesting’ and telehealth spending to keep rising

With many high-earning employees not expected back in the office full time, the “home nesting” that became a feature of the pandemic is set to continue, leading to sustained higher spending on home offices, gym equipment and renovations, a new report by McKinsey has found.

Online grocery shopping and virtual health care appointments are also expected to rise even as the COVID-19 pandemic recedes, while spending on remote education and digital entertainment will dip, the study by the Mckinsey Global Institute said.

The report, based on surveys of consumers in China, France, Germany, the U.K. and the United States, analyzed a series of pandemic-induced spending behaviors to predict which would outlast the crisis.

Two groups whose behavior Mckinsey predicts will have an outsized impact on how the post-pandemic economy functions are high-income, middleaged women, who for the past year have balanced work with caregiving responsibilities; and younger, high-income earners, who have accumulated significant savings but may hold back from spending until the outlook is more certain.

Here are some key trends highlighted in the report.

Virtual health care

Virtual health care visits increased tenfold in Germany, 25 times in the United States and 50 times in France during the pandemic, according to the report. Whether that continues will depend to what extent regulators and insurers are prepared to make temporary relaxations in rules around that kind of appointment permanent,

Mckinsey warned.

Doctors have seen investment in and demand for telehealth services soar, creating the infrastructure for the sector to stick post-pandemic.

Online shopping

The online share of total grocery spending doubled in some countries over the past year, rising to around 10% in the United States and U.K., according to the report.

Older shoppers, once hesitant to use e-grocery shopping, were forced to do so out of necessity, and are likely to keep shopping online after the pandemic.

Home entertainment

More than 60% of consumers across the five countries said they intended to maintain some of the home entertainment services they had subscribed to, implying a longer term drop in demand for cinemas and theaters.

Travel

Over 1 in 5 consumers surveyed by Mckinsey said leisure travel was one of the top activities they were excited about restarting post-pandemic, but whether routes and prices they were used to be will still be available is an unknown.

Mckinsey expects business travel to drop by 20% after the pandemic, putting cost pressures on airlines that previously subsidized leisure seats with profits from business seats. Just 10% of seat demand contributed to 55%-75% of profits pre-pandemic, Mckinsey said. But as videoconferencing and remote working have become more widely accepted, businesses are likely to see less need for in-person meetings.