Until now, the main struggle retailers had to contend with was the push-pull relationship between online marketplaces and brick-and-mortar stores. Now, though, retailers might have to convince shoppers to buy their products — or anything at all.
Speaking to Bloomberg Business, several retail experts described a subtle change happening within U.S. retail markets: Instead of purchasing the typical range of physical products, American consumers are increasingly spending their hard-earned cash on services and experiences. Jack Kleinhenz, chief economist for the National Retail Foundation, told Bloomberg that the increased desire for things do to over things themselves can be traced back to financial hardships stemming from the 2008 collapse.
“There’s been a shift,” Kleinhenz told Bloomberg. “Consumers have sort of a pent-up demand for services that they had to put aside during the Great Recession.”
Alia Barksdale, a New York resident, explained to Bloomberg that purchasing services like nail treatments and tickets to Broadways shows provide her with more value than any physical item could.
“I’m doing my nails and hair more this year, things that make me feel good, rather than buying clothes,” Barksdale said. “I’d rather have a shared moment with my daughter that she’ll remember than buy her a toy.”
The news comes after retail sales experienced a marginal increase in October, which did not help confidence in retailers’ abilities to pull themselves into the black during the holiday shopping season. Moreover, what money consumers are allocating for gift purchases is expected to fall as more funds are diverted toward experiential expenditures.
“It’s a really challenging time to be a retailer,” Steve Barr, U.S. retail and consumer-sector leader for PricewaterhouseCoopers, told Bloomberg.
As if brick-and-mortar merchants weren’t already aware of the dire straits they’re in, a consumer population that not only isn’t buying their products but isn’t even interested in them at all could remain a pressing issue in retail for months to come.