What to Watch: The Second-half Consumer

Retailers often head into the second half with fingers crossed, knowing cooler weather, a change of wardrobe and the holiday season could make all the difference in their annual numbers. ” data-reactid=”19″>Retailers often head into the second half with fingers crossed, knowing cooler weather, a change of wardrobe and the holiday season could make all the difference in their annual numbers. 

This year, merchants will also have their lucky rabbit’s foot, horseshoe and four-leaf clover at hand given the coronavirus, a bruising recession, what’s likely to be a nail-biter of a U.S. election and a good deal more than the usual dose of uncertainty. ” data-reactid=”20″>This year, merchants will also have their lucky rabbit’s foot, horseshoe and four-leaf clover at hand given the coronavirus, a bruising recession, what’s likely to be a nail-biter of a U.S. election and a good deal more than the usual dose of uncertainty. 

Much is changing or on hold, but for retailers, what matters most in the here and now is how shoppers react to it all. ” data-reactid=”28″>Much is changing or on hold, but for retailers, what matters most in the here and now is how shoppers react to it all. 

The consumer outlook always requires a little art and a little science, but it is now more muddled than ever. The questions to ponder are thornier than usual and, in many cases, intertwined. ” data-reactid=”29″>The consumer outlook always requires a little art and a little science, but it is now more muddled than ever. The questions to ponder are thornier than usual and, in many cases, intertwined. 

  • Will COVID-19 case counts rise with the colder weather, forcing cities and states to shut back down?
  • How quickly can the economy bounce back from the second quarter’s 32.9 percent drop in GDP, at an annual rate? 
  • How much more aid will be forthcoming from Washington now that emergency supports have expired and unemployment stands at 10.2 percent? 
  • And just how sticky are all of those consumer quarantine habits, from shopping online to ath-leisure all the time? 

There are some themes that are emerging.” data-reactid=”35″>There are some themes that are emerging.

Marcie Merriman, cultural insights and customer strategy leader for EY Americas, said many consumers are thinking more about affordability first. ” data-reactid=”36″>Marcie Merriman, cultural insights and customer strategy leader for EY Americas, said many consumers are thinking more about affordability first. 

“That’s not just bottom-line price, what we’re also seeing is much more focus on, ‘Do I need this?’” Merriman said. “We just don’t need as much stuff either. It’s less cool to be flamboyant and to show all these things you’re buying or what you’re doing when there are so many people who are struggling. So I think that’s a social shift. It doesn’t mean you won’t buy luxury, but it means you might buy one purse and really make it last.”” data-reactid=”37″>“That’s not just bottom-line price, what we’re also seeing is much more focus on, ‘Do I need this?’” Merriman said. “We just don’t need as much stuff either. It’s less cool to be flamboyant and to show all these things you’re buying or what you’re doing when there are so many people who are struggling. So I think that’s a social shift. It doesn’t mean you won’t buy luxury, but it means you might buy one purse and really make it last.”

It’s a shift that also comes with some pandemic nuance. ” data-reactid=”38″>It’s a shift that also comes with some pandemic nuance. 

Where Merriman noted people have moved away from buying stuff in recent years, spending more on experiences and trips, the pandemic has them staying closer to home. ” data-reactid=”39″>Where Merriman noted people have moved away from buying stuff in recent years, spending more on experiences and trips, the pandemic has them staying closer to home. 

That could have more people “having the old-fashioned Christmas,” she said. ” data-reactid=”40″>That could have more people “having the old-fashioned Christmas,” she said. 

Consumers will also have to be understood as individuals since it will be a patchwork recovery, with each sector, region and demographic going their own way and in accordance with their own circumstances. ” data-reactid=”41″>Consumers will also have to be understood as individuals since it will be a patchwork recovery, with each sector, region and demographic going their own way and in accordance with their own circumstances. 

“Right now, risk is almost your currency — your willingness to re-engage depends on your own situation,” said consultant Katie Thomas, who leads Kearney’s Global Consumer Institute. “Some people are OK starting to travel. A lot of categories will see these slow ticks back up as people are willing to re-engage. We are slowly more engaged and figuring out what works. The outlook, at least, is stable right now.”” data-reactid=”42″>“Right now, risk is almost your currency — your willingness to re-engage depends on your own situation,” said consultant Katie Thomas, who leads Kearney’s Global Consumer Institute. “Some people are OK starting to travel. A lot of categories will see these slow ticks back up as people are willing to re-engage. We are slowly more engaged and figuring out what works. The outlook, at least, is stable right now.”

But how long that lasts is anyone’s guess — and disruption could come on several fronts.” data-reactid=”43″>But how long that lasts is anyone’s guess — and disruption could come on several fronts.

“Things could change on a dime,” Thomas said. “Even with our election, there are still enough unknowns, it’s hard to say just how close the light at the end of the tunnel is.”” data-reactid=”44″>“Things could change on a dime,” Thomas said. “Even with our election, there are still enough unknowns, it’s hard to say just how close the light at the end of the tunnel is.”

After months of curbside pickup and more online shopping and other workarounds for the age of COVID-19, Thomas said consumers are changing and are going to continue to want all the flexibility and options they see in their shopping experience today.” data-reactid=”45″>After months of curbside pickup and more online shopping and other workarounds for the age of COVID-19, Thomas said consumers are changing and are going to continue to want all the flexibility and options they see in their shopping experience today.

But however the supercharged lurch to a much more brick-and-click integrated approach plays out in the years to come, for now it seems consumers are only going to want more easy-in, easy-out options. ” data-reactid=”46″>But however the supercharged lurch to a much more brick-and-click integrated approach plays out in the years to come, for now it seems consumers are only going to want more easy-in, easy-out options. 

As retailers opened back up, shoppers proved to be ready to shop, even more ready than many retailers anticipated as they were met with stronger-than-expected demand. But that demand petered off for many in late July and early August as cases spiked in Florida, California, Texas and elsewhere and back-to-school sputtered with kids around the country hitting the books remotely.” data-reactid=”47″>As retailers opened back up, shoppers proved to be ready to shop, even more ready than many retailers anticipated as they were met with stronger-than-expected demand. But that demand petered off for many in late July and early August as cases spiked in Florida, California, Texas and elsewhere and back-to-school sputtered with kids around the country hitting the books remotely.

Mark that as just the latest example showing that however hard it is to take the measure of consumers, it’s even harder during the pandemic. ” data-reactid=”48″>Mark that as just the latest example showing that however hard it is to take the measure of consumers, it’s even harder during the pandemic. 

It is safe to say, though, that shoppers are feeling at least a little bit mopey. ” data-reactid=”49″>It is safe to say, though, that shoppers are feeling at least a little bit mopey. 

The Refinitiv/Ipsos Primary Consumer Sentiment Index fell 2.5 percent this month to 47.1 after confidence held steady between June and July. (Sentiment is down sharply from the reading of 62.9 in February). ” data-reactid=”50″>The Refinitiv/Ipsos Primary Consumer Sentiment Index fell 2.5 percent this month to 47.1 after confidence held steady between June and July. (Sentiment is down sharply from the reading of 62.9 in February). 

Chris Jackson, senior vice president, U.S., Public Affairs at Ipsos, pinned the recent slip in confidence to the rise of new COVID-19 hotspots. ” data-reactid=”51″>Chris Jackson, senior vice president, U.S., Public Affairs at Ipsos, pinned the recent slip in confidence to the rise of new COVID-19 hotspots. 

“While many consumers are embracing a new normal, it has become increasingly difficult for them to maintain confidence as the virus rages and unemployment numbers are at levels unparalleled in the last decade,” he said. ” data-reactid=”52″>“While many consumers are embracing a new normal, it has become increasingly difficult for them to maintain confidence as the virus rages and unemployment numbers are at levels unparalleled in the last decade,” he said. 

All of that has retailers watching consumers extra closely headed into the key fourth quarter.” data-reactid=”53″>All of that has retailers watching consumers extra closely headed into the key fourth quarter.

Michelle Gass, chief executive officer of Kohl’s Corp., noted recently: “Holiday will be like no other. And the team has been hard at work. I mean, we work on this year-round as most retailers do. But we’re paying very close attention to what will be the shifts in consumer behavior. There’s still a lot of fluidity and a lot of uncertainty on what this holiday is going to look like.”” data-reactid=”54″>Michelle Gass, chief executive officer of Kohl’s Corp., noted recently: “Holiday will be like no other. And the team has been hard at work. I mean, we work on this year-round as most retailers do. But we’re paying very close attention to what will be the shifts in consumer behavior. There’s still a lot of fluidity and a lot of uncertainty on what this holiday is going to look like.”

Source Article

Next Post

Falling Covid-19 cases create opportunity and peril for Trump

Wed Jun 28 , 2023
Coronavirus infections are down in nearly every state. That could either give President Donald Trump just what he needs to prime his reelection odds or become another missed opportunity to capitalize on a lull during the pandemic. The positive trends are real. Covid-19 cases have been falling since late July, […]

You May Like