A consumer expert says people are raring to open up their wallets and spend their cash, as soon as more of us are vaccinated.
“There will be a Roaring ’20s of the 2000s here soon,” said James Thomson, Chief Strategy Officer of Buy Box Experts.
“I think of the situation that happened in 1999, New Year’s Eve, and everybody said, ‘It’s going to be the biggest party of the year.’ I look at what happens when enough of us have had our vaccine that we’re back to going down the street, arm in arm, excited to be out, socializing, doing our shopping, just being out and about. It’s going to create an opportunity where we open our wallets and we spend a lot more money because we’re excited. Let’s be honest, people spend more money when they’re happy. And what better way to be happy than, ‘I’ve got my vaccine, I can see my friends again.’”
However, Thomson notes that there have been major changes in consumer spending since the pandemic.
“Consumers are experiencing new categories of products. They’re buying types of products they’ve never purchased before. They’re having to figure out what it’s like to buy groceries online, what it’s like to buy apparel online. These are two categories that have not done particularly well with e-commerce up until 2020,” he said.
“There will be consumers who say, ‘I’ve tried out apparel purchasing, I’ve tried grocery purchasing at places like Amazon online, Instacart, so on and so forth and I actually think this is a good experience for me so while I may go back to the mall or go back to the grocery store, I’m totally prepared to buy replenishable products through these kinds of channels.’”
That’s not a good signal for retailers that have been hurting for the past year.
According to a recent survey by the Canadian Federation of Independent Business, only 14 per cent of small businesses in Toronto are making normal sales. In addition, 64 per cent are worried that consumer spending will be reduced following the COVID-19 crisis and 59 per cent are worried about the survival of their business given their amount of debt and the pace of recovery.
Those fears are well-founded, said Thomson.
“While some of these retailers have stepped up and provided things like curbside pickup, their ability to create an e-commerce solution that allows for the delivery of products to the home takes a long time to build up and it’s very, very expensive.”
This also means a major shift for brands that have long relied on retailers to connect them to consumers. Thomson says in order for some brands to survive, they will have to learn tell their product story themselves.
“Brands are asking the question, ‘how do we go direct to customer?’”