Whether April’s pause is a blip — a downturn before spending picks up again — may be no sure bet.
The looming question remains: Was April a temporary halt to consumer spending, or did it signal a continued tightening of budgets, potentially prolonging a downturn for merchants as summer draws near?
This week, we will explore the changing landscape of shopping behaviors and analyze what April’s retail sales say about the consumer in 2024.
Today’s Rundown
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Retail revival: What’s driving the national retail trend toward smaller stores?
Capitalizing on Consumer Shopping Demographics
Recent research from e-commerce consulting firm 2 Visions delves into consumer shopping habits, revealing intriguing insights into preferences across generations and regions.
According to 2 Visions, which polled 2,411 Americans from February to April 2024, 72.41% of consumers believe online shopping provides a wider variety of products compared to traditional brick-and-mortar stores. However, in-store shoppers often perceive that physical stores offer higher-quality goods, with 77.08% expressing this preference. Conversely, 53.85% of online shoppers think that online platforms offer superior quality.
High-income earners have nearly universal access to shopping within 30 minutes, in stark contrast to lower-income individuals. Only 85.19% of consumers earning less than $50K have the same level of access. This disparity highlights significant economic differences in consumer behavior.
Gen Z stands out once again, reporting an exceptionally high desire for in-store experiences compared to other generations, with a 30.77% preference for physical shopping options. Additionally, they have a 76.47% satisfaction rating for their local shopping options.
Is a Summer Slowdown Looming?
It remains uncertain whether April will provide a brief pause for consumers or if they will continue to tighten their budgets, leading to a prolonged slump for merchants as summer approaches.
The U.S. Department of Commerce detailed Wednesday (May 15) that in April, retail sales were unchanged in March, which in turn had been revised downward from 0.7% in the previous reading to 0.6% over February’s levels.
The headline April data missed consensus estimates, which had been for a 0.4% gain in the month.
In April, the Federal Reserve found that consumers expect higher inflation both one year and five years ahead. PYMNTS Intelligence reported that 42% of consumers anticipated higher loan interest rates in 2024, and about 20% of paycheck-to-paycheck consumers (roughly 60% of the population) expected to dip into savings to cover monthly bills.
16% of Generation X consumers indicated that splurging had led to financial distress. As many as 24% of millennials confessed that splurging on nonessential items contributed to their financial woes, and 34% of Generation Z consumers said the same.
Whether April’s pause is a blip — a downturn before spending picks up again — may be no sure bet.
Retail Trends
The Supply Side More retailers rethink self-check options.
BNPL: The Buy Now, Pay Later trend has been jet fuel for online shopping.
Retail revival: What’s driving the national retail trend toward smaller stores?
Random Irrelevance
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‘Slow living’: The latest fast-rising consumer trend.
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