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Given current spending trends and consumers’ buoyant outlook, analysis by McKinsey indicates fourth-quarter US consumer spending in 2021 is likely to rise by 7 per cent over 2020 and by 9 per cent compared with 2019, mostly driven by high-income earners and younger consumers. Shoppers are already embracing the omni-channel experience, it said.
As shoppers are worried about stocks running out, they are seizing opportunities to buy sooner rather than later, McKinsey said.
They’re also more willing than ever to switch brands or retailers, especially when items are unavailable, it found.
Given current spending trends and consumers’ buoyant outlook, analysis by McKinsey indicates fourth-quarter US consumer spending in 2021 is likely to rise by 7 per cent over 2020 and by 9 per cent compared with 2019, mostly driven by high-income earners and younger consumers. Shoppers are already embracing the omni-channel experience, it said.
Retailers that want to take full advantage of the opportunities provided by the decline in brand and retailer loyalty will need to meet consumers’ demands despite their supply and labour challenges, McKinsey said on its website.
While high-income consumers’ spend is expected to grow by 15 per cent year over year, the company expects 10 per cent year-over-year growth for millennials. Consumers are also increasingly bouncing between apps, websites and in-person shopping for inspiration, ordering and fulfillment.
In addition, shoppers are anxious about empty shelves, given they have been finding so many products out-of-stock. Approximately 40 per cent of respondents to the McKinsey survey (and 50 per cent of both high-income and younger consumers) said they expect to shop and spend earlier than they did in 2020 because they anticipate shortages, longer shipping times and unexpected supply-chain challenges related to COVID-19, the company said.
Finally, retailers will need to work harder to gain and retain loyalty. Among the 60 per cent of consumers who have faced out-of-stock products in the last three months, only 13 per cent said they waited for an item to come back in stock. About 70 per cent switched retailers or brands instead.
Social media is influencing the majority of US consumers’ holiday-buying decisions and inspires more than 80 per cent of younger consumers.
Fibre2Fashion News Desk (DS)
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