We’re Feeling the Warmth
While we still have a couple weeks of winter left (Thanks, Punxsutawney Phil), we at Marketsmith are feeling the warmth. Not just because the weather can’t make up its mind here in NJ, but because we’re seeing higher than expected growth in retail sales as well as in the “Back to Normal Index” (yes, this is a real thing that measures the current status of the economic recovery, created by CNN and Moody’s). According to Census Bureau data for January, retail sales were up 5.3% over December and 7.4% versus last year. In context, this was a major turnaround from the month-over-month dips we saw in the last two months of 2020. Moreover, every category measured showed improvement compared to December, and most were up when compared to last year. This is also highlighted in the “Back to Normal Index,” a measure that has reached a score of 82.3, up from the previous month.
Source: https://economy.com/economicview/indicator/usa_btn/83D21079-96E8-48AD-8969-12372AC216B1
Retail for the New and Improved Consumer
It’s interesting to note which retail categories have seen the largest movement; it paints a picture of what consumers are consistently spending money on during these interesting times. We are starting to see some signs of life among the hardest hit categories, such as food services and clothing (up month over month but still down on the year). The data also shows us that consumers are extremely bullish on products/services that promote self-care, help, and growth. There is currently an insatiable thirst for escapism and growth, highlighted by the increases in the adoption of at-home projects, hobbies, self-improvement projects, and personal care. For example, home-focused products continue to grow, with furniture up 12% since December and building material/garden supplies up 4.6% month over month and 19% year over year. This suggests that with more time spent at home, consumers are interested in leveling up their spaces by redesigning and redecorating. Moreover, health and personal care continue increase, up 1.3% month over month and outpacing last January by 6.2% as consumers have an emphasized focus on staying healthy mentally and physically.
How Brands Can Capture Consumer Confidence
With consumer confidence increasing, we expect to continue to see growth in retail sales. Consumers are looking for things to do and will spend money if brands can tap into their emotions as well as make the buying process as easy as possible (see our Holiday Whitepaper for how to reach consumers). In order to tap into this sentiment, as a brand you can:
- Create content that empowers conversation, community, and growth:
- DIY guides, conversation starters, educational videos
- Produce virtual and safe, in-store experiences for consumers to engage with
- BOPIS, gaming experiences, try-at-home guides, safe in-store customer care
- Reach users with a contextual message that supports their mission, when they are most interested in purchasing products
- Communicate exclusive promos, utilize dynamic targeting
- Show support and empathy for those who need it most
- Set up donation funds and campaigns, get involved in the community
