WEBVTT - How Post-Pandemic Consumer Spending Will Change Now That More People Are Getting Vaccinated

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<v Speaker 1>It's Tuesday, April. I'm Oscar Ramirez from the Daily Dive

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<v Speaker 1>podcast in Los Angeles, and this is reopening America. Vaccination

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<v Speaker 1>rates are going up and people are ready to get

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<v Speaker 1>out there and start shopping again. But how will consumer

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<v Speaker 1>spending change? With the increased use of delivery apps and

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<v Speaker 1>curbside pickup, grocery shopping might see the most sustained changes.

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<v Speaker 1>Younger shoppers will also be a big force and apparel spending.

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<v Speaker 1>Melissa Repco, retail reporter at CNBC, joins us for more.

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<v Speaker 1>Thanks for joining us, Melissa, Thanks for having me. As

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<v Speaker 1>more people get vaccinated, a lot of companies and businesses

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<v Speaker 1>are looking forward to how consumers spending will look like next.

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<v Speaker 1>There's been a lot of changes that happened throughout the pandemic.

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<v Speaker 1>Some of those things will stick. You know, the rise

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<v Speaker 1>of online shopping has really made a difference for a

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<v Speaker 1>lot of companies. So grocers, you know, might see a big,

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<v Speaker 1>dramatic and long lasting shift in that sense. You know,

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<v Speaker 1>this curbside pick up all that stuff. And then young consumers,

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<v Speaker 1>you know, they're gonna be driving a lot of this

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<v Speaker 1>post pandemic purchases as they're the most willing to get

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<v Speaker 1>out there, start buying and interacting with more people. So

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<v Speaker 1>Melissa tell us a little bit about how consumer spending

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<v Speaker 1>is going to change once everybody starts getting back out

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<v Speaker 1>there again. To be fair, the jury is still out.

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<v Speaker 1>It's still early days, and we're just starting to see

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<v Speaker 1>kind of the indicators of what people's mindset is. But

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<v Speaker 1>I have looked a lot at different reports and surveys

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<v Speaker 1>by consultants, which pretty much every company is passing through

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<v Speaker 1>to try to get a better sense of what to

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<v Speaker 1>anticipate in the month ahead, and one of the big

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<v Speaker 1>themes that jumped out at me is that grocery behavior

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<v Speaker 1>has really shifted. You mentioned online shopping has gotten bigger

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<v Speaker 1>during this time, but more of us are also trusting

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<v Speaker 1>other shoppers to pick out our produced and our meat,

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<v Speaker 1>and that convenience factor may really have a huge impact

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<v Speaker 1>long term on grocers who traditionally didn't have a lot

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<v Speaker 1>of online shoppers relying on them. The other thing that's

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<v Speaker 1>really changed is that people are living differently, so more

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<v Speaker 1>people are working remotely and plan to continue to do

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<v Speaker 1>that at least on some level going forward. So that

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<v Speaker 1>may mean they're eating more breakfast and lunches at their

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<v Speaker 1>homes in their kitchens, versus having them to capture it

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<v Speaker 1>with coworkers. According to some of the data you had

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<v Speaker 1>in your article, said they plan to spend more money

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<v Speaker 1>on groceries, said they will spend less on dining out

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<v Speaker 1>post pandemic. So that shift is there, and it's a

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<v Speaker 1>little sad because our restaurants need that business. But these

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<v Speaker 1>are the things that people have kind of grown accustomed to.

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<v Speaker 1>And you know, you talked about people picking out our

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<v Speaker 1>produce center items for us. There's a lot of trust

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<v Speaker 1>in that trust that they're gonna give you the quality

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<v Speaker 1>stuff but also give you good alternatives when things aren't

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<v Speaker 1>in stock anymore, and that you know people have been

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<v Speaker 1>doing that. That builds up a lot of trust in

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<v Speaker 1>that brand, in those companies, and and people are gonna

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<v Speaker 1>want to stick with that. So, yeah, you're right, that's

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<v Speaker 1>a very big one. We also talked about I mentioned

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<v Speaker 1>a little bit about young shoppers, you know, Generation Z.

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<v Speaker 1>They're really ready to get out there and they're gonna

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<v Speaker 1>be big drivers of purchases. Teams and twenty some things

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<v Speaker 1>are really the ones that are starting to buy kind

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<v Speaker 1>of post pandemic purchases. Think things like clothes, and I'm

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<v Speaker 1>talking about non workout clothes for want new shoes, and

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<v Speaker 1>and also buying handbags, which is something that traditionally people

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<v Speaker 1>haven't needed as much. Those younger consumers also seem to

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<v Speaker 1>be more likely to have the mindset of getting back

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<v Speaker 1>out to the movies, out to malls, and so they

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<v Speaker 1>may really be the first wave of consumers that companies

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<v Speaker 1>see return and may also be more willing to spend

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<v Speaker 1>money out at the restaurants, not just outdoor restaurants, but

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<v Speaker 1>also indoor restaurants, so they're kind of leading the way

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<v Speaker 1>with some of that spending. We've seen the fashion trends

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<v Speaker 1>change over time as well. Everybody's has seen those memes

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<v Speaker 1>about how skinny jeans are and millennials, you know that's

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<v Speaker 1>old news. And you know we're seeing like baggear and

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<v Speaker 1>wide leg jeans for Generation Z now. So those are

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<v Speaker 1>all things that are at play, and those companies have

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<v Speaker 1>to cater to that, you know, they have to get

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<v Speaker 1>ready for that. Contactless modes of shopping and dining are

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<v Speaker 1>still going to remain popular. Also after the virus fades. Cleanliness,

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<v Speaker 1>all of these things that companies have really tried hard

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<v Speaker 1>to work on. Those things are going to stick around

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<v Speaker 1>for some time, and some companies have already spoken about

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<v Speaker 1>how it's influencing how they think of their stores. So Target,

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<v Speaker 1>for example, which continues to open more stores every year,

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<v Speaker 1>they said they're going to factor spaciousness into their future design.

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<v Speaker 1>So having more room for people to spread out because

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<v Speaker 1>we've all become works to social distancing and it may

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<v Speaker 1>not want to go back to being crammed into aligned

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<v Speaker 1>close together. So that's an example of how it may

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<v Speaker 1>even shave things like architecture. Yeah, I mean, everybody wants

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<v Speaker 1>their space and their personal space allowed to them, so yeah,

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<v Speaker 1>definitely can see that sticking around and kind of in

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<v Speaker 1>that vein. You know, a lot of retailers that are

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<v Speaker 1>getting ready to come back have to start. You know,

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<v Speaker 1>it's kind of this balance they need to achieve. They've

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<v Speaker 1>been trending towards a lot of online shopping, having employees

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<v Speaker 1>pick out those items, getting those readies for curbside pick

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<v Speaker 1>up all that stuff. And on the other side of things,

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<v Speaker 1>some of the appearance of these stores have not been

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<v Speaker 1>kept up so much because of kind of how hectic

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<v Speaker 1>things have been. You mentioned in another article of yours

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<v Speaker 1>how Walmart and Macy's have been accused of having unkempt

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<v Speaker 1>stores because of all the ruckets that's going around, and

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<v Speaker 1>they really need to step that part of it up,

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<v Speaker 1>the appearance, or they risk losing some more customers. Yes,

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<v Speaker 1>I think that's a misconception that people are either online

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<v Speaker 1>shoppers or in person shoppers, and the reality is much

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<v Speaker 1>more complicated, and that's why retailers need to think through

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<v Speaker 1>how they present themselves, not just on their website but

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<v Speaker 1>also in their stores. So often people's relationships with those

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<v Speaker 1>brands are actually deeper, both online and in stores, and

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<v Speaker 1>they do a variety of things. They maybe use curbs

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<v Speaker 1>I pick up some of the times, they shop in

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<v Speaker 1>persons on the time, and it's more of a blend.

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<v Speaker 1>So a lot of the time when people shop for groceries,

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<v Speaker 1>they're actually going into the store sometimes and they're relying

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<v Speaker 1>on those online shopping services other times. It's not an

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<v Speaker 1>either or, and that's why this relationship between their store

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<v Speaker 1>and its appearance matters so much. But stores are juggling

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<v Speaker 1>more balls in the air than they ever have, so

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<v Speaker 1>that's why their stores are taking on all these new roles.

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<v Speaker 1>They're storing a lot of those online purchases in the

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<v Speaker 1>front of their store near the door, so that you

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<v Speaker 1>can run in as a customer and grab it and

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<v Speaker 1>not spend a lot of time in the mall. So

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<v Speaker 1>that's what's really challenging them is how much of their

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<v Speaker 1>time should they be spending folding clothes and making the

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<v Speaker 1>display less beautiful, and how much other time should they

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<v Speaker 1>be spending making the online orders ready to go for

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<v Speaker 1>consumers who do try these new online focused approaches, it

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<v Speaker 1>is a tough balance. And some of the experts you

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<v Speaker 1>spoke to, you know, a good storefront is one of

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<v Speaker 1>your best salesman. It's it's so true, but it impacts business.

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<v Speaker 1>You know. One of the other people that goes around

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<v Speaker 1>and kind of does analysis of all this stuff, they

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<v Speaker 1>downgraded Walmart stock because of these unkempt stores and how

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<v Speaker 1>sloppy they looked in some cases. And and it's just

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<v Speaker 1>not it's not just Walmart, it's other stores. To Macy's

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<v Speaker 1>was part of this, but it can impact their business

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<v Speaker 1>and they're kind of credibility and here's the their dilemma

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<v Speaker 1>with that. So yes, R five Capital, which is one

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<v Speaker 1>of the analyst firms that covers Walmart downgrade at their

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<v Speaker 1>stock because they were saying, hey, look, you're offering a

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<v Speaker 1>better experience for online shoppers than you are for in

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<v Speaker 1>store shoppers based on what we've seen in stores. And

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<v Speaker 1>the problem for that for businesses is it's more expensive

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<v Speaker 1>to to build online orders a lot of the time

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<v Speaker 1>because you're having an employee pick and pack that order. Traditionally,

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<v Speaker 1>something that shoppers have done for them spells when they

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<v Speaker 1>come to the store and grab it and even carry

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<v Speaker 1>it home. So all of those additional costs come with

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<v Speaker 1>an online order. And if you keep pushing people to

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<v Speaker 1>you online because the store experience feels inferior, but it

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<v Speaker 1>actually hurts your business. Yeah, I mean there's a lot

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<v Speaker 1>of stuff to go through as we get back to

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<v Speaker 1>this new normal, and consumers are more comfortable to get

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<v Speaker 1>back out shopping. So a lot of stuff on both

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<v Speaker 1>the business side and the consumer side. Melissa Repco, retail

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<v Speaker 1>reporter at CNBC, Thank you very much for joining us.

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<v Speaker 1>Thank you. I'm Oscar Ramirez and this has been reopening America.

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<v Speaker 1>Don't forget that. For today's big news stories, you can

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<v Speaker 1>check me out on the Daily Dive podcast every Monday

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<v Speaker 1>through Friday. So follow us on I Heart Radio, or

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<v Speaker 1>wherever you get your podcast