Speaker 1: It's Tuesday, April. I'm Oscar Ramirez from the Daily Dive
Speaker 1: podcast in Los Angeles, and this is reopening America. Vaccination
Speaker 1: rates are going up and people are ready to get
Speaker 1: out there and start shopping again. But how will consumer
Speaker 1: spending change? With the increased use of delivery apps and
Speaker 1: curbside pickup, grocery shopping might see the most sustained changes.
Speaker 1: Younger shoppers will also be a big force and apparel spending.
Speaker 1: Melissa Repco, retail reporter at CNBC, joins us for more.
Speaker 1: Thanks for joining us, Melissa, Thanks for having me. As
Speaker 1: more people get vaccinated, a lot of companies and businesses
Speaker 1: are looking forward to how consumers spending will look like next.
Speaker 1: There's been a lot of changes that happened throughout the pandemic.
Speaker 1: Some of those things will stick. You know, the rise
Speaker 1: of online shopping has really made a difference for a
Speaker 1: lot of companies. So grocers, you know, might see a big,
Speaker 1: dramatic and long lasting shift in that sense. You know,
Speaker 1: this curbside pick up all that stuff. And then young consumers,
Speaker 1: you know, they're gonna be driving a lot of this
Speaker 1: post pandemic purchases as they're the most willing to get
Speaker 1: out there, start buying and interacting with more people. So
Speaker 1: Melissa tell us a little bit about how consumer spending
Speaker 1: is going to change once everybody starts getting back out
Speaker 1: there again. To be fair, the jury is still out.
Speaker 1: It's still early days, and we're just starting to see
Speaker 1: kind of the indicators of what people's mindset is. But
Speaker 1: I have looked a lot at different reports and surveys
Speaker 1: by consultants, which pretty much every company is passing through
Speaker 1: to try to get a better sense of what to
Speaker 1: anticipate in the month ahead, and one of the big
Speaker 1: themes that jumped out at me is that grocery behavior
Speaker 1: has really shifted. You mentioned online shopping has gotten bigger
Speaker 1: during this time, but more of us are also trusting
Speaker 1: other shoppers to pick out our produced and our meat,
Speaker 1: and that convenience factor may really have a huge impact
Speaker 1: long term on grocers who traditionally didn't have a lot
Speaker 1: of online shoppers relying on them. The other thing that's
Speaker 1: really changed is that people are living differently, so more
Speaker 1: people are working remotely and plan to continue to do
Speaker 1: that at least on some level going forward. So that
Speaker 1: may mean they're eating more breakfast and lunches at their
Speaker 1: homes in their kitchens, versus having them to capture it
Speaker 1: with coworkers. According to some of the data you had
Speaker 1: in your article, said they plan to spend more money
Speaker 1: on groceries, said they will spend less on dining out
Speaker 1: post pandemic. So that shift is there, and it's a
Speaker 1: little sad because our restaurants need that business. But these
Speaker 1: are the things that people have kind of grown accustomed to.
Speaker 1: And you know, you talked about people picking out our
Speaker 1: produce center items for us. There's a lot of trust
Speaker 1: in that trust that they're gonna give you the quality
Speaker 1: stuff but also give you good alternatives when things aren't
Speaker 1: in stock anymore, and that you know people have been
Speaker 1: doing that. That builds up a lot of trust in
Speaker 1: that brand, in those companies, and and people are gonna
Speaker 1: want to stick with that. So, yeah, you're right, that's
Speaker 1: a very big one. We also talked about I mentioned
Speaker 1: a little bit about young shoppers, you know, Generation Z.
Speaker 1: They're really ready to get out there and they're gonna
Speaker 1: be big drivers of purchases. Teams and twenty some things
Speaker 1: are really the ones that are starting to buy kind
Speaker 1: of post pandemic purchases. Think things like clothes, and I'm
Speaker 1: talking about non workout clothes for want new shoes, and
Speaker 1: and also buying handbags, which is something that traditionally people
Speaker 1: haven't needed as much. Those younger consumers also seem to
Speaker 1: be more likely to have the mindset of getting back
Speaker 1: out to the movies, out to malls, and so they
Speaker 1: may really be the first wave of consumers that companies
Speaker 1: see return and may also be more willing to spend
Speaker 1: money out at the restaurants, not just outdoor restaurants, but
Speaker 1: also indoor restaurants, so they're kind of leading the way
Speaker 1: with some of that spending. We've seen the fashion trends
Speaker 1: change over time as well. Everybody's has seen those memes
Speaker 1: about how skinny jeans are and millennials, you know that's
Speaker 1: old news. And you know we're seeing like baggear and
Speaker 1: wide leg jeans for Generation Z now. So those are
Speaker 1: all things that are at play, and those companies have
Speaker 1: to cater to that, you know, they have to get
Speaker 1: ready for that. Contactless modes of shopping and dining are
Speaker 1: still going to remain popular. Also after the virus fades. Cleanliness,
Speaker 1: all of these things that companies have really tried hard
Speaker 1: to work on. Those things are going to stick around
Speaker 1: for some time, and some companies have already spoken about
Speaker 1: how it's influencing how they think of their stores. So Target,
Speaker 1: for example, which continues to open more stores every year,
Speaker 1: they said they're going to factor spaciousness into their future design.
Speaker 1: So having more room for people to spread out because
Speaker 1: we've all become works to social distancing and it may
Speaker 1: not want to go back to being crammed into aligned
Speaker 1: close together. So that's an example of how it may
Speaker 1: even shave things like architecture. Yeah, I mean, everybody wants
Speaker 1: their space and their personal space allowed to them, so yeah,
Speaker 1: definitely can see that sticking around and kind of in
Speaker 1: that vein. You know, a lot of retailers that are
Speaker 1: getting ready to come back have to start. You know,
Speaker 1: it's kind of this balance they need to achieve. They've
Speaker 1: been trending towards a lot of online shopping, having employees
Speaker 1: pick out those items, getting those readies for curbside pick
Speaker 1: up all that stuff. And on the other side of things,
Speaker 1: some of the appearance of these stores have not been
Speaker 1: kept up so much because of kind of how hectic
Speaker 1: things have been. You mentioned in another article of yours
Speaker 1: how Walmart and Macy's have been accused of having unkempt
Speaker 1: stores because of all the ruckets that's going around, and
Speaker 1: they really need to step that part of it up,
Speaker 1: the appearance, or they risk losing some more customers. Yes,
Speaker 1: I think that's a misconception that people are either online
Speaker 1: shoppers or in person shoppers, and the reality is much
Speaker 1: more complicated, and that's why retailers need to think through
Speaker 1: how they present themselves, not just on their website but
Speaker 1: also in their stores. So often people's relationships with those
Speaker 1: brands are actually deeper, both online and in stores, and
Speaker 1: they do a variety of things. They maybe use curbs
Speaker 1: I pick up some of the times, they shop in
Speaker 1: persons on the time, and it's more of a blend.
Speaker 1: So a lot of the time when people shop for groceries,
Speaker 1: they're actually going into the store sometimes and they're relying
Speaker 1: on those online shopping services other times. It's not an
Speaker 1: either or, and that's why this relationship between their store
Speaker 1: and its appearance matters so much. But stores are juggling
Speaker 1: more balls in the air than they ever have, so
Speaker 1: that's why their stores are taking on all these new roles.
Speaker 1: They're storing a lot of those online purchases in the
Speaker 1: front of their store near the door, so that you
Speaker 1: can run in as a customer and grab it and
Speaker 1: not spend a lot of time in the mall. So
Speaker 1: that's what's really challenging them is how much of their
Speaker 1: time should they be spending folding clothes and making the
Speaker 1: display less beautiful, and how much other time should they
Speaker 1: be spending making the online orders ready to go for
Speaker 1: consumers who do try these new online focused approaches, it
Speaker 1: is a tough balance. And some of the experts you
Speaker 1: spoke to, you know, a good storefront is one of
Speaker 1: your best salesman. It's it's so true, but it impacts business.
Speaker 1: You know. One of the other people that goes around
Speaker 1: and kind of does analysis of all this stuff, they
Speaker 1: downgraded Walmart stock because of these unkempt stores and how
Speaker 1: sloppy they looked in some cases. And and it's just
Speaker 1: not it's not just Walmart, it's other stores. To Macy's
Speaker 1: was part of this, but it can impact their business
Speaker 1: and they're kind of credibility and here's the their dilemma
Speaker 1: with that. So yes, R five Capital, which is one
Speaker 1: of the analyst firms that covers Walmart downgrade at their
Speaker 1: stock because they were saying, hey, look, you're offering a
Speaker 1: better experience for online shoppers than you are for in
Speaker 1: store shoppers based on what we've seen in stores. And
Speaker 1: the problem for that for businesses is it's more expensive
Speaker 1: to to build online orders a lot of the time
Speaker 1: because you're having an employee pick and pack that order. Traditionally,
Speaker 1: something that shoppers have done for them spells when they
Speaker 1: come to the store and grab it and even carry
Speaker 1: it home. So all of those additional costs come with
Speaker 1: an online order. And if you keep pushing people to
Speaker 1: you online because the store experience feels inferior, but it
Speaker 1: actually hurts your business. Yeah, I mean there's a lot
Speaker 1: of stuff to go through as we get back to
Speaker 1: this new normal, and consumers are more comfortable to get
Speaker 1: back out shopping. So a lot of stuff on both
Speaker 1: the business side and the consumer side. Melissa Repco, retail
Speaker 1: reporter at CNBC, Thank you very much for joining us.
Speaker 1: Thank you. I'm Oscar Ramirez and this has been reopening America.
Speaker 1: Don't forget that. For today's big news stories, you can
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