As we work our way through the pandemic, it’s common to look at consumer confidence to see where consumers stand. The good news is that September saw an uptick in all areas of consumer confidence, giving retailers hope as we enter the holiday season and retail payments quickly become a hot topic.
In fact, the Conference Board’s Consumer Confidence Index went up from 86.3 to 101.8 and the Expectations Index, which measures consumers’ forecast on income and labor market conditions went from 86.6 to 104. Consumers are more confident even though no one really knows what may happen.
Why Worry about Consumer Confidence?
As we enter the holiday season, consumer confidence is more important than ever. It’s no secret that the pandemic blew all of us away. Consumers stopped spending because millions of people lost their jobs.
Now, as we work through the pandemic and enter one of the busiest times of the year, retailers want to know what consumers are thinking. Will they spend? Will they be frugal this year? How does all of this affect their retail payments?
With more and more stores closing every day, it’s a scary time for retailers, no doubt, but the rising Consumer Index provides hope.
Consumers are Confident about the Labor Market
Something that plays a big role is the consumers’ confidence in the labor market. If consumers feel good about it, they feel confident there will be plenty of jobs, which means they won’t worry about spending.
If consumers have a bad feeling about the labor market, they may not spend as much because they’ll worry about their job security.
Right now about 33% of consumers feel the labor market will steadily increase between now and March. Since unemployment rates keep falling and more jobs seem to be opening up, consumers may have good reason to feel confident.
What Should Retailers Do?
It’s a scary time for any business, that’s for sure. As we enter the holiday season, you hope for the normal hustle and bustle that the last few months of the year bring in, but not this year. If anything, you went less of the hustle and bustle and more sales are done online.
Will that help or hurt consumer confidence? Only time will tell as we quickly enter the holiday season. As a retailer, you need to keep up your retail payments by opening up a variety of channels to meet consumers’ needs no matter where they are.
Some consumers will go on with business as usual, but most will want omnichannel shopping, the ability to pay how they want, and as little contact as possible. If you want to ride the wave of the consumer confidence index, you too need to think outside the box to make the most of your sales for the rest of 2020, which is hopefully a year we can all say we survived.
