Recession, Poof! WSL Research Shows 70% are Fiscally Upbeat
WSL’s How America Shops® research shows more than 70% of shoppers are secure or optimistic about their finances. And as the weather warms, vaccinated shoppers are more eager to return to brick stores. Here’s what retailers can do to meet the shopper’s pent-up passion to go out and spend.
Talk About a Shot in the Arm – for Retail
March retail sales rose more than 26%, year-over-year, according to Mastercard Spending Pulse. And, WSL researchers learned in March, 43% of shoppers feel financially secure and 27% are optimistic about improving their financial futures.
These figures, detailed in our latest How America Shops® report, indicate consumer optimism is at the same level as pre-pandemic.
All of this suggests that retailers and brands should expect a surge in discretionary spending from exuberant shoppers. And not just online – although that will continue to be a component. Retailers in 2021 will have to duplicate their pandemic-era digital feats in their stores, with experiences that deliver new energy, innovation and discovery.
And they’ve got a lot of ground to cover.
What the Demographics Tell Us
We broke down consumer feelings about their financial standings into three areas, and then examined these sentiments by demographic. In there, WSL spotted a few noteworthy differences that should help retailers reach different consumer segments.
Financial sentiment 1: I feel secure and satisfied where I am now.
Older consumers dominate in this feeling – 61% of Boomers and 69% of seniors are secure. That’s twice the percentage of Millennials (31%) and nearly twice that of Gen Z (35%) and Gen X (36%). Still, these are all encouraging figures. So switch on the experience: Retailers can display goods and categories older shoppers like as “rediscovery” products they’ll celebrate buying again; while more discretionary goods can be positioned to younger shoppers as “you’ve earned this” discoveries. Want to see an example? Watch our video of the Amazon Fresh store in Woodland Hills, Calif., which inspires shoppers to be kitchen creative and helps them shop fast. The in-store Alexa gives recipes and shows which aisles the ingredients can be found – including affordable options. It’s entertaining, budget-flexible and simple.
Financial sentiment 2: Optimists expect to improve their standard of living.
Here we have a reversal, with one-third of Gen Z, Millennials and Gen X optimistic about improvement, compared with just 12% to 14% of Boomers and Seniors, who are likely beyond their peak earning potentials. Swap predictable for positive: Retailers should consider these results auspicious regardless of age and create energetic environments that tap into positivity. The Shiseido store in Japan blends striking innovation into its beauty offerings, making it accessible to all who have the desire to indulge. It’s technology includes completely digital, touch-free sampling and ordering stations, for budget-conscious discretion, as well as a dedicated space for meditation (and aspiration) in individual “reflection” pods, tapping into the mental wellness that is most popular among younger shoppers.
Financial sentiment 3: Pessimistic and barely holding on to my standard of living.
Consistently over recent years, one-third of shoppers struggle to stay financially sound. This includes one-fifth of Gen Z and Millennials and one-third of Gen X who feel pessimistic, and 16% of older shoppers. Retailers and brands see the opportunity in these shoppers, and the success of the dollar channel, Aldi and the expanding Lidl supermarket chains supports the spending power of these consumers. Trade it up: There is further opportunity for the dollar chains, Walmart and other value retailers to innovate by folding surprise goods and digital services into the mix (especially in non-CPG categories). The 7-Eleven Lab store in Texas, for example, injects energy into convenience by incorporating better-for-you, grab-and-go alternatives, from a Kombucha station to organic meals, but displays them alongside less expensive brands.
Retailers can learn more about what shoppers are experiencing in stores through our Virtual Retail Safari® here. And learn more about consumer financial sentiment from our latest How America Shops® report, here.