Consumer Spending Strained
Spending is down in the US for household items like furniture and electronics, as food, gasoline and other essentials have become more expensive. Retailers including Walmart and Best Buy are expecting to feel the pinch.
The change in spending habits is uneven. Many people are dining out and traveling more after not being able to during the height of the pandemic. And high-income individuals continue to purchase items they desire. But for the rank and file, sentiment about the economy appears pessimistic.
Open Questions for Leaders:
- Should loyalty programs innovate to preserve middle-income consumer spending on durables, or shift to focus on essentials?
- Will high-income consumers eventually respond to continued inflation, and if so, how can digital marketing and loyalty programs get ahead of that shift?
- What data might provide leading indicators for the next shift, since consumer sentiment and behavior seem poised to keep changing?
Related DCA Resource:
Commerce Code Ep. 123: The Economy & The Consumer – On this episode of Commerce Code, Dan Currell explores consumer behavior in the current, volatile economy with Tim Lee of Full Stack Economics. Full Stack Economics is an independent publication based in Washington, D.C.