New Year’s resolutions: They’re not just about unattainable goals and broken promises. For retailers, consumers’ goals for the new year can mean big business. According to a survey conducted by GOBankingRates, these are some of the most popular resolutions for 2016 and how they can be a boon for merchants’ bottom lines.
PAY DOWN DEBT
We’ll start with the resolution that is not such good news for retailers: paying down debt. A growing trend in the past few years, especially among Gen Xers, this goal received the lowest response rate, with 27.5 percent of all respondents saying it was their top resolution.
In the short term, the idea of potential shoppers using their extra income to pay off debt may not be great for merchants looking to move goods off their shelves (be they physical or digital). But the consumer practice of paying down debt now will create less encumbered customers down the road. These debt-free shoppers will have more income and better credit scores, allowing them to make more substantial purchases and investments, like real estate, high-end electronics and automobiles.
Generation X has a particularly enmeshed relationship with debt, with 76 percent of them, according to a report from Allianz Life, opening their first credit card when they were between the ages of 18 and 24. While millennials are more focused on saving, Gen Xers acknowledge that they use credit cards to support their lifestyle.
“Over the last three decades, there has been a collective shift in how people view debt. It’s now perceived as a normal part of one’s financial experience, and that has fundamentally altered the way people spend and save,” said Katie Libbe, Allianz Life vice president of consumer insights.
Retailers shouldn’t be too concerned, as overall the GOBankingRates survey found that money goals were not as big a priority for the new year, with more focus being put on having fun and living life to the fullest.
SAVE MORE, SPEND LESS
With 30.1 percent of respondents saying this topped their list for the new year, it does not necessarily mean that shoppers will stay out of stores — they’ll just be on the lookout for better deals. Retailers, like T.J.Maxx, Nordstrom Rack and others, who offer discount prices and aggressive promotion strategies may have an upper hand here.
Consignment retail may be another category that fits this resolution trend like a glove. As shoppers look to de-clutter — there is a decided millennial trend for younger generations to own less and experience more — consignment retail is in a great position to capitalize. As CNBC reports, online resale sites The RealReal and thredUP are bracing for a new year boom in the number of items being listed on their sites. ThredUP, which resells brands, ranging from the low end (H&M) to high-end luxury (Gucci), told CNBC that it sees more than a 60 percent lift in the number of items for sale on its site from December to January.
“It’s a combination of people wanting to clean out their closet after the holidays, as well as … [gifts] that maybe people didn’t want or wanted a different color,” said Rati Sahi Levesque, chief merchant at The RealReal.
SPEND MORE TIME WITH FAMILY AND FRIENDS
Great news for restaurants, bars, movie theaters and live and at-home entertainment: 33.2 percent of respondents said more time with friends and family was a top resolution for 2016. Whether it’s going to see the latest Star Wars movie or streaming media at home, spending quality time with loved ones usually entails some form of food or entertainment.
Going to the movies didn’t get any cheaper this past year, with the average ticket price in the U.S. hitting $8.61 over the summer, according to Variety. While it seemed that appreciation for 3D presentations was on the rise with some notable summer releases, including “Jurassic World” and “Mad Max: Fury Road,” Variety also noted the rise of luxury seating and IMAX formats contributing to the increase in ticket prices. Theaters, like AMC and Regal, are jumping on the growing trend, investing in more amenities, which allow them to charge visitors higher prices. The growth in mobile ticket ordering also makes it easier to push these upcharges.
Meanwhile, eating out isn’t getting any cheaper, either. The average cost of dinner at the 22 most popular chain restaurants in the U.S. ranges from $88 per person (Eddie V’s) to $12.17 (Red Robin). Not interested in going bargain basement, the average cost of dinner per person comes out to just over $28 per person. That adds up quickly for restaurant chains.
A perennial favorite on the list of top resolutions. The GOBankingRates survey found that 39.6 percent of respondents listed this as their top resolution. There are obvious perks for the gym and fitness industries that tend to see a sizeable (no pun intended) increase in gym membership signups annually in the month of January.
But new services like ClassPass that allow fitness enthusiasts more options for achieving those goals are experiencing widespread popularity and astronomical growth. Perhaps the choose-your-own-adventure model of fitness will be less intimidating to those looking to keep those resolutions after the first few weeks of the year.
Weight Watchers also seems to be upping its promotional game to mark the annual resolution event with a new spokesperson featured in its on-air advertising: Oprah Winfrey, the veritable high priestess of retail consumer advice. No stranger to the rollercoaster of gaining and losing weight, Oprah is not just a spokesperson — she is also an investor in the company.
Earlier this fall, Winfrey purchased a 10 percent stake in Weight Watchers — that’s a total of 6.4 million shares with the option to buy another 3.5 million — causing the stock price to double in a single day. This jump brought the media tycoon’s own share value to $70 million, not a bad profit for a single day. While it is unclear what her involvement in the company will be long-term, her impact on the brand has already been felt.
LIVE A HEALTHIER LIFESTYLE
But beyond just focusing on weight loss, the next most popular resolution was to live a healthier lifestyle at 41.1 percent. This speaks to larger trends in healthy living, among them healthy eating. Grocery chains, like Whole Foods (which has taken a few hits in the past year, including a pricing scandal that ended up costing it $500,000 in fines from the City of New York and recent layoffs that included handing out pink slips 30 days before Christmas), are seizing the opportunity, along with their patrons, for a fresh start in the new year. Whole Foods co-CEO John Mackey has a plan that he thinks will take the grocery chain in the right direction.
Mackey recently spoke with PYMNTS about the plan, saying, “I think the biggest thing that is going to happen for Whole Foods is the nine-point [plan]. Some of the points that we emphasized there: We are cutting costs; we’ve cut significant amounts of money out of our cost structure already, and we’ve pledged that, by the end of 2017, we’ll have a run rate of $300 million reduced from the end of fiscal 2015. That’s a significant amount of money … Some of that money is going to be invested in lower prices all through the store.”
“We are going to increase our differentiation,” Mackey continued. “We are going to innovate more. We are going to do a better job of marketing or explaining and communicating those differentiations of our quality standards.”
ENJOY LIFE TO THE FULLEST
Lastly, we come to the most popular (and perhaps most vague) resolution: to enjoy life to the fullest. With a whopping 45.7 percent of respondents to the GOBankingRates poll saying this was their primary resolution, there seems to be a clearly defined focus on the positive and the experiential among consumers for 2016. This may be particularly good news for the travel and hospitality industry, as millennials — more so than any other age group — seek out experiences over acquiring more stuff.
Travel among millennials is on the rise, especially with new ways to finance those exotic getaways. In fact, seemingly antiquated finance options, like layaway, are a great option for these money-conscious young travelers who are averse to acquiring debt.
But millennials aren’t just better at paying for their vacations; Conde Nast Traveler says they’re better at pretty much every other aspect of vacationing, too. From more flexibility when it comes to finding off-the-beaten-path accommodations via apps, like Airbnb or Love Home Swap, to in-flight upgrades, like first-off-the-plane privileges, millennials seem to have the inside edge on vacationing in style on a budget.
They are also better at finding things to do once at their final destination. Thanks to their digital fluency and hyperconnected social networks, millennials rely on apps and social recommendations to give them the insider edge on the ground at any locale.
That doesn’t mean they’re the only ones who will be living life to the fullest this year.
“Who wouldn’t want to live life to the fullest?” said Cameron Huddleston, GOBankingRates’ Life + Money columnist. “Unfortunately, the small things in life can get in the way of actually enjoying life. Perhaps that’s why so many people are resolving to live life to the fullest — as a reminder to take advantage of the time they have.”