The latest monthly consumer data from predictive analytics company Springboard shows shoppers more willing to go to a physical store in June compared to their sentiment in May. The report also revealed that half of the respondents had plans to visit a store over the upcoming July 4 holiday week.
The Springboard report follows news from the National Retail Federation that the organization’s top economist has upwardly revised the retail sales estimate due to a combination of factors, including the rollout of vaccines, pent-up demand and changes in consumer behavior — such as those shown in the Springboard report.
“With the majority of retail spending still occurring in-store, it is clear that the extent to which consumers visit retail destinations, and when and why they do so, remains a critical factor in the overall success of retail,” said authors of the Springboard report. “Whilst it is still early days, we are already seeing positive changes in consumer behavior that are encouraging signs for the performance of bricks and mortar retail going forward.”
Some of the highlights of the report include more shoppers feeling somewhat comfortable making trips to retail stores — 90 percent in June versus 88 percent in the May report. “But it is particularly encouraging that the degree of comfort felt by consumers has also increased; 56 percent now either feel very or completely comfortable compared with 50 percent in May, with the greatest uplift being amongst those who feel completely comfortable (30 percent in June versus 26 percent in May).”
Springboard said a key element in the understanding of the impact of COVID-19 on consumer behavior “is examining the extent to which consumers continue to stay close to home, prioritizing visits to neighborhood centers over larger downtowns, and also the influence of online shopping, both of which have been key trends of the pandemic period.” Based on the results, physical retail is positioned well for the second half.
Other findings include that 48 percent of those polled intend to shop in person over the July 4th weekend. And 76 percent of respondents said they shop more or the same amount in smaller neighborhood shopping centers now than before the pandemic, which compares to 71 percent in May. The research also showed that 52 percent of respondents are working partly from home, which compares to 57 percent in May.
Regarding NRF’s retail sales revision, Jack Kleinhenz, chief economist at the organization, said it’s become “clear that the U.S. economy and retail sales are growing far faster and more steadily than anyone could have expected just a few months ago. We are seeing not just unprecedented growth from months of pent-up demand as the economy reopens but momentum as well.”
In a statement, the NRF said it now expects retail sales this year to swell between 10.5 and 13.5 percent over 2020’s numbers, ranging between $4.44 trillion and $4.56 trillion. “That compares with the initial forecast released in February of between 6.5 percent and 8.2 percent growth and a total between $4.33 trillion and $4.4 trillion,” the NRF said.
Kleinhenz explained that the initial forecast was made when there “was still great uncertainty about consumer spending, vaccine distribution, virus infection rates and additional fiscal stimulus.”
He said since then, the NRF has seen “spending grow, vaccines have become available to virtually anyone who wants one, infections have fallen and additional stimulus in the form of the American Rescue Plan has been signed into law.”