Brian Meeks’ Post

“Generation-Z (roughly twenty-somethings) is the first consumer group to grow up in an all-digital world—digital natives. Just like the cutting-edge technology that is their second nature, members of Gen-Z are breaking rules and charting new lifestyles, a challenge for consumer-facing companies to target and plan for.” “It matters more every year because, while Gen-Zers represent only 5% of U.S. consumer spending today, in five or so years, it will be closer to 20%, when they begin to enter their peak spending years and become about a third of the workforce. This is why the number of headline-grabbing Gen-Z studies and media reports is proliferating.” “Three out of four Gen-Z adults prefer mobile shopping, and nearly half use YouTube to research products before they buy, according to HubSpot.” “A recent study by consulting giant Deloitte reported that 86% of Gen-Zers say “having a sense of purpose is important to their overall job satisfaction.” Nearly 90% “are increasingly willing to reject assignments or employers who don’t align with their values.”” “Gen-Z is having an outsized influence on the purchase decisions of their parents, Gen-X. Gen-Zers’ moms and dads are 42% more willing to pay extra for sustainable products, according to EcoCart.” “A third of Gen-Zers say they have a shopping addiction, and one in five are on board with a “no-buy” pledge for 2024, according to a study commissioned by Credit Karma. The study also found that 43% of Gen-Zers are experiencing “money dysmorphia,” defined as a distorted negative view of one’s finances.” “Sam’s Club is experiencing its highest growth rates from bargain-hunting Gen-Zers—63% over a two-year period, according to Walmart.” “A survey by Bank of America found two-thirds of Gen-Zers are cutting back on dining out (43%), passing up events with friends (27%) and shopping at more affordable grocery stores (24%).” “One takeaway may be that Gen-Z is coming of age with an intense awareness of prices and value, a willingness to trade down or out (for example, a no-buy year), and a rapid response to perceived injustices and gimmicks.” - Greg Petro

“One-third of consumers decreased their overall spending during the second quarter, while about a quarter said they increased their spending, according to a Q2 trend report from Jungle Scout.” “The report, which measured Q2 versus Q1 2024, found that across generations, Gen Z consumers increased their spending the most, both overall and online specifically. Baby Boomers were the least likely to alter their spending this quarter, while Gen X were the most likely to cut their spending overall and Millennials were most likely to cut their spending online, per the report.” “Jungle Scout also found that almost half of shoppers start their online product searches on social media platforms, and many consumers view social media ads as more important than ads on e-commerce marketplaces like Amazon. Eva Hart, content marketing and demand generation manager at Jungle Scout, said the findings around social media advertising are crucial for sellers and brands as they need to adapt their strategies to meet prospective buyers where they shop.” - Howard Ruben

“According to the CNBC/NRF Retail Monitor, powered by Affinity Solutions, overall retail sales (excluding automobiles and gas) saw a 3.42% year-over-year increase in June, the strongest since November 2023. However, month-over-month sales saw a slight increase (0.47%), suggesting some stabilization after May's higher month-over-month growth (1.35%), likely driven by Memorial Day sales.” “The Retail Monitor calculation of core retail sales (excluding restaurants in addition to automobiles and gasoline) was up 0.3% month-over-month in June and up 3.07% year-over-year. That compared with increases of 1.2% month over month and 2.88% year-over-year in May.” “Online and other non-store sales were up 1.78% month-over-month seasonally adjusted and up 23.08% year-over-year unadjusted.” “Clothing and accessories stores were down 0.11% month-over-month seasonally adjusted but up 5.35% year-over-year unadjusted.” “Sporting goods, hobby, music and book stores were up 0.68% month-over-month seasonally adjusted but down 0.52% year-over-year unadjusted.” ““Consumers are being thoughtful about their spending, prioritizing non-discretionary purchases as they continue to face high interest rates and lingering inflation,” said NRF president and CEO Matthew Shay. “Inflation has dropped to nearly zero for goods, but remains persistent with services, and solid economic fundamentals are helping consumers make ends meet. Month-over-month sales growth was moderate in June, and year-over-year gains for total retail sales were the largest we’ve seen since last fall.”” - Zachary Russell

“Chinese e-commerce vendors are struggling for survival as sales growth slows, price pressure rises and shopping platforms compete with ever-more aggressive policies to attract increasingly cost-conscious customers.” “A once-thriving e-commerce industry punctuated by shopping bonanzas featuring galas and celebrities is bearing the brunt of a sputtering economy that has seen consumers all but tie knots in their purse strings.” “While extreme discounting, influencer-led sales campaigns and generous returns policies did much to enrich the sector, those same practices by which vendors have to abide are now hurting those upon which the sector rests.” “Profit margins are being squeezed at big platforms such as those of Alibaba (9988.HK) and JD.com (9618.HK), but also at the thousands of small businesses which joined the e-commerce boom decade that started around 2013.” “That boom has left e-commerce accounting for 27% of retail, with 12 trillion yuan ($1.65 trillion) of goods sold annually.” “But as the economy slows, so does e-commerce, with the double-digit growth of recent years set to be replaced by single digits, showed data from Euromonitor.” “One outcome is that enthusiasm for participating in sales festivals is noticeably cooling, Lu said, with the biggest - Singles Day, centred on Nov. 11 - a "risky" proposition.” “During online shopping event "618" - stemming from JD.com's 18 June founding - the owner of womenswear brand Inman called on authorities to rein in platforms' "purchase return protection" policies which force sellers to bear the cost of returns.” “"The return rate on e-commerce platforms is 60%," Inman founder Fang Jianhua wrote on social media. Before such policies, it was about 30%, he said.” “E-commerce operator Lu said return protection policies had caused return rates to soar in categories such as apparel.” “Though apparel return rates have always been relatively high, they have jumped since the requirement for buyers to pay for postage when returning goods was scrapped, sellers said.” “Lu said the operating environment is poor because the peaking of e-commerce has created what is known in Chinese as the "neijuan" effect - working harder for smaller returns.” “"There is no growth in sales, because there are no new customers and the average income of people is not rising like 10 years ago," Lu said. "There is only competition, between platforms, between sellers. This is the new normal for the e-commerce industry in China."” “Retailers are also feeling the impact of factories selling directly to consumers at factory prices. Consequently, some vendors on Pinduoduo have been running at a loss for two years, said He-Ling Shi, an economics professor at Monash University in Melbourne.” - Sophie Yu, Casey Hall

“China's consumer prices grew for a fifth month in June but missed expectations, while producer price deflation persisted, with domestic demand mired on a slow recovery track despite support measures for the world's second-largest economy.” “Beijing has sought to revive consumption after a stuttering post-COVID recovery, but concerns are lingering over more fundamental issues including a protracted housing downturn and job insecurity. That has dented consumer and industrial activity and reinforced calls for more effective policies.” “The consumer price index (CPI) in June rose 0.2% from a year earlier, against a 0.3% uptick in May, the slowest in three months, data from the National Bureau of Statistics showed on Wednesday, below a 0.4% increase forecast in a Reuters poll.” “CPI edged down 0.2% month-on-month, versus a 0.1% drop in May and worsening from an expected 0.1% fall.” “"The risk of deflation has not faded in China. Domestic demand remains weak," said Zhiwei Zhang, chief economist at Pinpoint Asset Management.” “"Government policy is still prioritising investment which is set to exacerbate the problem further. This will continue to weigh on inflation," said Ng, who estimated full-year CPI would rise just 0.5%, well below an official inflation target of 3% for 2024.” “Policymakers' repeated calls for average folks to "dare to spend" have drawn a lukewarm response. With households and companies expected to borrow less, that strengthens the case for policy support other than the piecemeal subsidies for auto and consumer goods trade-ins.” “Core inflation, excluding volatile food and energy prices, stood at 0.6% in June, unchanged from May.” - Qiaoyi Li, Ryan Woo

“When he wasn’t on the driveway beginning to develop the skills that would make him one of the most famous BMX riders in the world, Nigel Sylvester could often be found inside watching “Family Matters” with his grandmother.” “Now, in a campaign video for Sylvester’s latest Air Jordan sneaker collaboration, the actress who played the show’s matriarch, Jo Marie Payton has been cast in the role as the woman whose driveway helped pave the way to his professional career.” “The Nigel Sylvester x Air Jordan 4 RM “Grandma’s Driveway,” which releases July 20, is the most personal sneaker yet in his decade of collaborating with Jordan Brand and Nike. In addition to helping design the sneaker, which comes with a nubuck colored to match the emerald green fence around his grandmother’s driveway, Sylvester penned the script read by Payton telling of his journey from the Queens neighborhood of Jamaica to becoming a global superstar.” - Ian Servantes

“The membership-based warehouse club said Wednesday that it will increase its membership fee by $5 in the U.S. and Canada as of Sept. 1. That’s an increase to $65 from $60 for annual memberships. Its higher-tier plan, called “Executive Membership,” will increase to $130 a year from $120.” “Costco said the fee increases would affect around 52 million memberships, a little over half of which are executive memberships.” “It marks Costco’s first membership rate increase since June 2017. On average, the company has raised rates roughly every five and a half years — which would have put Costco on track to raise the fee in late 2022 or early 2023.” “Costco relies on membership fees to drive most of its revenue and help keep merchandise prices low. Its rival, Walmart-owned Sam’s Club, hiked its own membership fee in 2022 for the first time in nine years. Yet even after the fee bump, a Sam’s Club membership was cheaper — at $50 for club members and $110 for members of its higher-tier level, “Plus,” on an annual basis. At BJ’s Wholesale, annual membership fees are $55 and $110, for club members and its own higher tier, respectively.” - Melissa Repko

“Nike And Jordan are coming together for its first-ever dual-brand presence in the world, and they’re setting up shot in one of the fastest growing city centers in the world with an exploding economy.” “What to know: this new retail location will open on July 11th and is located at Gante 4 in the Centro Histórico neighborhood, with two entrances on Madero Street. Boasting over 20,000 square feet across three floors, this location is Nike, Inc.’s largest retail location in Latin America and its only dual-brand presence.” “For the store opening, Nike and Jordan have prepared a number of choice product offerings, including exclusive high-heat footwear, hyperlocal apparel, and the Jordan Workshop experience where you’ll get to customize your own Air Jordan 1, Diamond Short, and more.” “In addition to the latest and most modern retail displays seen from Nike worldwide, Nike/Jordan World Of Flight in Mexico City will house The Lounge, a gathering place for the basketball community decorated with local basketball-inspired art and photography.”

“Many retailers, restaurants and other consumer companies have seen sales fall as shoppers pull back their spending. Businesses are now trying to convince customers that they offer the best deals, fueling a rise in discounts, promotions and value meals.” “Consumers are fed up with deceptive pricing, said Jean-Pierre Dubé, a professor of marketing at the University of Chicago Booth School of Business. They've seen smaller items on shelves, paid tacked-on fees and felt pressure to tip workers for things they didn't tip for in the past.” “Grocery prices have risen just 1% in the past year, according to data from the U.S. Bureau of Labor Statistics. But food at home prices have climbed more than 24% since May 2019, stretching consumers' wallets and stoking anger with companies.” “Consumers' buying power has also increased as inflation cools and the job market remains strong, boosting real hourly earnings for the average private sector worker, according to the BLS data.” “Other key costs are raising Americans' expenses, such as electricity and rent, which have climbed over the last 12 months.” “In a Pew Research Center survey from May, 62% of U.S. adults said inflation was "a very big problem in the country today," a higher percentage than any other issues they were asked about including illegal immigration, gun violence, violent crime and the federal budget deficit.” “That percentage has held roughly steady, even as inflation cools. In the year-ago survey by Pew, 65% of Americans said inflation was a very big problem.” - Melissa Repko, Amelia Lucas

“UK retail sales slumped last month as cold weather deterred shoppers from buying summer clothing and gardening supplies, despite pressure easing on households amid a slowdown of inflation.” “The latest snapshot from the British Retail Consortium showed a 0.2% drop in total UK retail sales compared against June last year.” “Highlighting the pressure on retailers amid a wider slowdown in spending as households grapple with the cost of living crisis, the trade body blamed the drop on unseasonably cold weather.” “The gloomy consumer outlook comes as high Bank of England interest rates continue to weigh on household spending power. While inflation has returned to the 2% target set by the government, prices still remain significantly higher than before the cost of living crisis took hold.” “Separate figures from Barclays also released on Tuesday showed card spending fell 0.6% in June, the first decline since February 2021, as cold weather sapped consumer demand and forced some fashion brands to adjust their sales schedules.” “The BRC said it expected retail sales to bounce back over the coming months, helped by the men’s Euro 2024 tournament.” - Jonathan Yeboah, Richard Partington