Good piece in the Boston Globe this morning about how many retailers may be about to seen an enormous surge in customer demand, though the degree to which spending will grow remains unknown.
"The signs are all there: Vaccination rates are rising, retailers are hiring, and signs of normalcy, such as sports games with fans and concert announcements, are sprouting with the warmer weather. A combination of pent-up consumer demand and sharp increases in savings for some and federal stimulus payments for others will fuel an unparalleled spending spree, said economist Eric Hilt.
"'This recession has been very different from historical patterns. It’s highly unusual for households to come out of a recession with an enormous accumulation of savings,' said Hilt, an economics professor at Wellesley College. The conditions of the past year, he said - a fall in spending in high-ticket categories like travel and hospitality coupled with a big increase in some household incomes - has resulted in 'this giant accumulation of savings that’s historically unprecedented'."
The Globe notes that LL Bean is an example of what is happening at the moment. During 2020, many consumers went on "a pandemic buying binge for stuff that provided comfort in a time of fear and alienation," which resulted in a revenue increase of five percent for the year, as well as a million new customers.
Now, the story says, "like thousands of other retailers around the country, the famed Maine outfitter is trying to guess what we’ll splurge on next. It’s doubling the number of bike mechanics on staff in Freeport (Maine, where its headquarters is located) and has crews hurriedly building Adirondack chairs. It’s restocking adventure duffels, backpacks, and travel clothing and preparing for another record-breaking year of water and winter sports sales.
CEO Stephen Smith has said that he hopes the buying patterns established in 2020 "will translate into a lifestyle change that begets even more business, since 'once you’ve hiked a coastline or paddled a kayak next to seals,' the couch seems much less appealing."
You can read the entire piece here.
- KC's View:
The key to this approach, it seems to me, is that it is focused on an aspirational customer. Not only that, it creates aspirational customers, an approach that pays off in the long run. It takes more effort than just selling to the base, but the effort generally is worth it.
That's critical for food stores, too, I think. Retailers and brands have the opportunity here to maximize their connections to shoppers by appealing to their aspirations and working to create inspiration. Sure, that takes perspiration. But no pain, no gain.
My own experience with LL Bean - as well as with its brethren - is that it is working. Mrs. Content Guy has been shopping online for a kayak, and finding one has proven almost impossible; the local bicycle shop said it could have a bike for her, within her price range, by June 2022.
(I've had better luck - virtually every shirt I wear when I do my FaceTime videos is from LL Bean, and for the most part, its in-stock positions have been pretty good.)