My colleague Jitender Migliani and I’ve simply printed a report (Shopper Spending And The Economic system Develop Regardless of Persistent Pessimism) based mostly on the H2 2024 US macroeconomic traits and shopper conduct knowledge that we’ve collected and analyzed. This report goals to make clear the economic system’s trajectory over the previous yr, its continued course in 2024, and the implications for shopper conduct and model technique.
The US Economic system Marches Proper On …
The US economic system, defying all expectations of a slowdown, continued to develop within the first half of 2024: Inflation continues to ease, and the unemployment price stays beneath historic ranges; wages and disposable earnings per capita proceed to extend, and rates of interest have been stored unchanged for over a yr now. Forrester expects average financial progress within the second half of 2024.
… However Shopper Pessimism Defies Financial Optimism
This yr’s reassuring macroeconomic knowledge hasn’t made a dent within the American gloomy psyche; the College of Michigan’s Index of Shopper Sentiment hit a brand new low for the yr in June. Chinks are showing in an in any other case stable US economic system — shopper mortgage default charges are at a historic excessive, whereas financial savings charges have fallen to a historic low. A big a part of this obvious paradox is defined by the diverging sentiments of the “haves” and the “have-nots” (see determine beneath). That is on the coronary heart of the paradox of a robust economic system and mushy confidence.
Manufacturers Should Tweak Their Development Methods To Replicate Their Shoppers’ Wants
There isn’t any one American shopper, and types should deal with the disparate wants of the purchasers they serve. Some manufacturers, like McDonald’s and Goal, have accommodated frugality with new pricing and merchandise. Retailers like Bass Professional Outlets facilitate affordability (usually with out compromising on worth) utilizing financing. Some, like P&G, haven’t ceded on worth; as a substitute, they provide premium worth for a premium worth, comparable to when charging $5 extra for a razor to shave “difficult areas!”
Forrester purchasers can learn our full forecast report. To remain related to model, advertising and marketing, and progress technique matters, go to my Forrester bio and select “Observe.” In case you are a Forrester shopper focused on discussing these matters, please schedule time with me.
