Friday’s online sales set a record of over $9 billion, but now retailers are thinking of ways to bring people back into stores. o consumers have the money to keep shopping, and if so, was the media wrong about their worry over inflation?
All we have heard over and over is that consumer confidence in the economy is at an all-time low but is that more headlines than fact? e online sales record set on Friday indicates that consumers feel good about their finances. However, retailers are experiencing a substantial decline in-store traffic at a time when they have a lot of inventory to sell.
“Discounting and promotions to sell merchandise can be dangerous. If consumers expect” sales” and put off purchases, retail margins will decline, and Wall Street will throw a fit. Even in the auto industry, recent trends indicate that shoppers are not willing to pay sticker prices or higher for new cars. Sales of used vehicles are declining.”
What does all this tell us about consumer behavior?
1ne: While consumers view inflation as a problem, it may be because it’s taking away money they have saved, thus reducing their financial comfort level.
2wo: Grocery items, which have seen the most significant price increases, are losing share as consumers trade down to less expensive brands like private labels. Consumers are angry that many grocery brands reported record profits which, they feel, was at their expense.
3hree: Consumers still have money but are more careful about where and how they spend it.
4our: For retailers to thrive in today’s environment, they need to have a firm grasp of consumers’ shifting needs, wants, and desires, resulting in the acceleration of omnichannel requirements. Brands had to respond to myriad new challenges in the last year, and technology has proven to be an essential tool to gather and identify customer insights for decision-making around these changes. The positive response from our consumer survey should encourage retailers and restaurants to continue to innovate their customer operations and store locations to deliver a seamless experience and address the current needs of shoppers in-person and online.
54% of consumers stated that it felt good to return to physical stores. However, in a follow-up 2021 Mood study, 65% of shoppers still said they were not yet visiting stores as often as they did before Covid-19.
5ive: While advertising on social media is declining, customers are still sharing brand experiences online. Brands need to invest in customer service and stop with messages that say,” your call is important to us.
The coming month will indicate just how resilient consumers and the economy are. They will spend how much and on what items are to be determined.