Zip Co’s weekly spending index for May has revealed some key purchasing behaviours with spending on building and renovations increasing over the past quarter, despite a sluggish property market, a continuing trend toward a cashless society and buy now pay later usage experiencing a slow recovery.

Zip co-founder and COO, Peter Gray said there is a clear two-speed recovery emerging in the business economy, based on what consumers are spending their money on.

“While large shopping centres have resembled Christmas shopping sized crowds in recent weeks, pubs and bars are still limited to 50 patrons. This disparity of easing will continue to impact the business landscape, and particularly the small to medium sized enterprises, who are fronting large costs to adjust their places of trade.

“We have been particularly interested in the bolstering of spend in the past quarter on building and renovation, which is interesting in light of the recent government stimulus package.

“The shift to ecommerce-first and online payments has intensified, and we’ve seen the transformation of retail accelerate over the past three months. For businesses, the move to online and creation of frictionless payment routes is crucial. Online will become the biggest battleground for Australian retailers.”

At the beginning of June, the Australian Government announced it would be handing down significant grants for housing renovations to help reinvigorate the construction industry.

However, Zip Weekly Index data from May 2020 shows that home renovations and trade services saw a boon when compared to May 2019. Security installation, roofing, gardening, outdoor home improvement and, home pools and spas all saw significant increases in consumer spending in May 2020, while trade services like electricians, plumbers and painters were all sought-after.

Similarly, the hospitality industry has been left to struggle due to lockdown measures. Forced to pivot significantly during May, spending in pubs, bars, cafes and restaurants remains significantly lower than seasonal averages. While adaptive models have helped reclaim some of the lost revenue, the gap won’t be closed until lockdown measures are completely pulled back.

One of the biggest shifts during the COVID-19 lockdown has been the acceleration of the transition to a cashless society. During the weeks of lockdown, ATM usage plummeted, and that trend continued in May (down 43%), while spending on online marketplaces almost doubled compared to the same period last year (up 89%).

The steady move out of lockdown had an influence over how Australians were using buy now, pay later. As beaches opened, outdoor gear buying on Zip was up 47%; the move to offices and more face-to-face interaction saw cosmetics (103%), and jewellery (55%) all up.

Home renovations were commonplace throughout May, and furniture purchases through Zip was up 19% throughout May 2020.

The Zip Weekly Spending Index is based on anonymised transaction data from a sample of more than 1.5 million Zip customers and 300,000 Pocketbook users.