Consumers WILL Shell Out For Services This Spring

Will consumers be able to afford thisServices such as entertainment or events encompass some of the most discretionary spending categories This is especially important because discretionary categories track consumer confidence and other economic indicators most closelyWith inflation at historic highs it might seem like an odd time to be more optimistic about services But it39s important for marketers to dig into the nuance of the current inflation situation Some goods like gasoline up 48 YOY and food up 88 YOY are significantly more expensive and driving overall headline inflation while prices of commodities consumers have been buying throughout the pandemic like electronics homeadjacent goods and even used cars are droppingThe climbing cost of essential like groceries and gas is a big deal for all consumer spending power but it does hit some groups more than othersInflation impacts lowerincome households where marketers face greater share of wallet competition There are some signs of optimism however The job market is strong especially in services In March over 214000 jobs were created in professional and business services and leisure and hospitalityThe unemployment rate is the lowest it39s been since February 2020 US taxpayer refunds are higher on average than last year Restaurants seem to be in a better position especially as the rate of inflation for groceries is rising month to month significantly more than the price of food away from home Marketers who sell classes concerts or care to affluent consumers might finally see a break in the cloudsTravel is likely to get the biggest bumpTravel is the industry that will most likely see most of those services dollars captured Eightyone percent of consumers state they intend to take at least one leisure trip in 2022 per Mintel While 2021 bounced back significantly for the travel ampamp tourism sector with a 682 increase in total sales Mintel forecasts a smaller but continued increase of 23 over 2021 totaling 540 billion total US sales for travel ampamp tourism this yearWill this summer see consumers spending savings on plane tickets like they did last year Traffic at airports indicates they will At this time last year US airports saw about 33 fewer travelers Since the beginning of the year TSA checkpoints are approaching prepandemic levels April is seeing just about 5 fewer travelers on weekends than 2019Forecasting demand for quotstuffquot postpandemicThere is always reason to be conservative if you39ve seen hockeystick growth recently Marketers who sell stuff might be in for a bumpier few quarters as service spending increases However adjacent opportunities abound for most marketers A wedding invite might have triggered a trip to the salon for that expensive manicure but your consumer is open to a new clutch to complement itAs always we need to walk through the consumer39s mindset and behaviors as they make purchase decisions to understand where our products but especially services can add the most valueNote Inflation and jobs numbers from US BLS March reportsThis article was written by Corinne Casagrande Senior Vice President Strategy Broadbeam Media and was originally published at Mediapost on April 25 2022Click the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillagecomMyersBizNet

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Consumers WILL Shell Out For Services This Spring

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Consumers WILL Shell Out For Services This Spring

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