Strategy in TECH...
In the latest data on consumer confidence, The Conference Board reports a positive, if only “slightly” so (their words), uptick in consumer confidence readings in March as compared to the sentiment in February. The organization’s Consumer Confidence Index (CCI), a widely followed read on how consumers are feeling about both existing and upcoming business conditions, is an important indicator of potential economic activity.
By now, data clearly shows that vinyl record sales here in the U.S. have been growing steadily for more than a decade. When initially detected, many thought it was simply a fad… They thought that at first CDs…and then digital downloads…and finally digital streaming would supplant vinyl. Now we know that is just not the case and that vinyl is continuing to grow in importance again to the music industry.
Think this is just a U.S. phenomenon? Think again! A report by the Nikkei in Japan notes the dramatic growth of vinyl sales there, as well.
Even though consumers report rising financial insecurity as inflation rages on, the Fed keeps raising interest rates, and the economy begins to slow, they say they intend to continue to prioritize spending on health and wellness – a new priority since the onslaught of COVID-19 – according to new research from Accenture. This is potentially good news as more in the custom integration industry look to offer various residential health and wellness solutions as part of a whole-home residential or commercial installation.
After 70+ days of declining gas prices and news that inflation has peaked, consumers are feeling a little bit better about things. And that is especially true of wealthier consumers, according to the latest reading from the Morning Consult/Axios Inequality Index – which includes consumer sentiment information broken down by income level.
Walmart surprised analysts in its latest earnings report for its fiscal second quarter. After having issued a warning last month that its profit may drop as shoppers were feeling the effects of high inflation and focusing purchases on necessities like food rather than discretionary (and more profitable) items such as electronics. But on Tuesday, the company reported solid revenue increases and although earnings tightened a little, they still beat analysts’ forecasts.
In a tough economic environment for retailers, how did they do it? The company says they are attracting more middle- and high-income shoppers. These high-income consumers are ‘trading down’ – an effect that has been discovered in past times of economic slowdowns and recessions. And it seems to be happening now…
This past Friday, the University of Michigan released a preliminary reading of its Index of Consumer Sentiment for the month of August. This survey, one of the more widely followed readings by economists on how consumers are feeling, showed a small but meaningful jump as consumers are feeling a little better about the future. However, the overall results were a bit mixed.
This month, the United Nations released its report on the latest global population trends and it delivered quite a few surprises…and even a bit of a shock. The data shows that major population shifts are coming…and coming soon. First, in a bit of a surprise, we learn that by November 15 of this year, the world population will total 8 billion people. The U.N. says that, in the world we hope to build, that population number will represent “8 billion opportunities to lead dignified and fulfilled lives.” But it also represents 8 billion reasons to remember “our shared responsibility to care for our planet.”
And, in a bit of a shock, we learn that by next year, China will be replaced as the most populous nation in the world by India, whose rate of population growth supersedes China’s. Surprised?
The Conference Board announced on Tuesday that consumer confidence in June, as measured by their Consumer Confidence Index, a key indicator of the state of mind of the U.S. consumer, has dropped to a reading of 98.7. This is the first time that the Index has been under its 100 reference level since a post-2020 pandemic recovery. Generally, a reading under 100 indicates a pessimistic consumer likely to cut back on spending.
This is the lowest reading for consumer confidence since February 2021.
Things are changing in the economy faster now, causing a dramatic uptick in economic anxiety. The fuse was lit last Friday when the latest government data showed that inflation increased to 8.6% in May compared to last year. The reading on inflation had been widely expected by most economists to drop a point or two from the 8.3% rate of inflation reported in April. The news sent Wall Street into a tailspin as traders interpreted the increase in inflation as a heightened risk of recession.
A new analysis that correlates consumer confidence by income level has produced a shocking red flag for any business that offers goods and services to the luxury customer – as do many custom integrators. Fire up your sensors and watch closely to see if clients in your market are subject to this alarming trend.
