Many retailers count on holiday sales for 20 to 30 percent of their annual sales, with some stores deriving even more annual revenue from the short time period between Thanksgiving and year-end. With that in mind, here is a cliff notes view of the economic environment that will influence holiday sales this year. Inflation Down, Prices—Not So Much The good news is that inflation has come down compared to last year, when the rate in July reached a peak of 9.1 percent. So far this year, the inflation rate average is 3.7 percent, compared to …
An Anti-Tech Backlash
Forget the Metaverse, AI, self-driving cars, and aerial drone pizza delivery; there is an emerging movement among customers who are focusing on yesterday instead of tomorrow. If you think that brings to mind a bit of history from the industrial revolution—the Luddite movement—you would be right. There is an alignment between the original Luddites and growing concerns today about the tech revolution and its negative impact on human lives, livelihoods, mentality, social interaction—and even the future of humanity. Luddites Redux We are …
Shifting Economic Gears Present Challenges for Retailers
The Federal Reserve has dramatically raised interest rates over the past few months focused on taming inflation. While some data [and hopeful thinking] suggest that inflation may have recently peaked, we have yet to see major price moderation. The economy however has started to shift gears indicating that deceleration may be at hand. Four emerging factors will impact the retail economic picture in coming months. We are seeing big changes in real estate, consumer preferences, shopping channels and human capital. Real Estate Stumbles Into a …
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A Cogent Economic Review
Christopher Waller, a senior Federal Reserve official, announced on May 30, that he supports the U.S. central bank’s main interest rate to rise to a level at which it starts to stunt economic growth by the end of the year, with increases in interest rates at every meeting until inflation is decisively curbed. This strategy is thought to have been successful in the past in mitigating inflation and hopes are that it will do so again. But the Fed may be taking a huge gamble considering today’s volatile climate. The current economy may be …
Maybe It’s Not Inflation, but an Economic Recalibration
What if the current price increases American consumers are experiencing are not temporary, caused by inflationary pressures, but instead are signs of a once every 70- to 100-year massive economic recalibration? Free Range Pricing We saw this happen in the last century. It started with a gasoline crisis in 1973, and it continued into the 1980s. During that period, prices for nearly everything soared and then most stayed at higher levels creating an entirely new consumer reality. Prices were rising so fast that many retailers for a time did …
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Why Green is More Than a Color for 2022
The Covid-19 recession of 2020 saw big gains for categories of merchandise including groceries, health and wellness-related products, pet food/supplies, furniture, and the DIY or home improvement category. It came as no surprise that while spending more time at home, people sought to improve the comfort, safety, visual appeal, and functionality of their environments. A study by Harvard University researchers found that 2020 was a record-breaking year for home improvements, with consumers spending around $420 billion on DIY projects. By May …
Living [and Shopping] Through Clouds of Emotion
By the 1980s, marketers understood that when consumers had all the “essential stuff” they needed and that in the future, those shoppers would buy based on desire, driven by emotion. That supported Maslow’s well-known hierarchy of human needs, a psychological theory first put forth in the 1940s. When the majority of peoples’ physical needs for shelter, food, clothing and such have been met they can venture into the realm of personal relationships, social connections, status among peers, feelings of accomplishment—and ultimately, aspirational …
What Home Buyers Want Now: 10 Post-Pandemic Priorities
The residential real estate market has been a bright spot during the pandemic-driven economic downturn that began early last year. There were initial fears that we might see a repeat of the real estate meltdown that started in 2008, when millions of homes entered foreclosure and homes lost an average of 30 percent of their market value. But so far, housing has performed better than expected. Boom Towns According to the National Association of Realtors (NAR), in 88 percent of metro areas tracked, single-family, existing home prices rose by …
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