In this episode:

Wendy Liebmann talks to WSL’s president Candace Corlett about the latest How America Shops® research that reveals how Americans are feeling (not happy), and what that means for 2024 and beyond (challenging).

They discuss:

  • How shoppers see the challenges for their standard of living in 2024, and what they plan to do about it.
  • The lack of innovation that leaves shoppers wanting – with little inspiration to pay more.
  • Where shoppers will actually spend more in 2024 – categories, services and retail experiences. There are some.
  • New ways shoppers are defining convenience, value and values. There’s a whole new vernacular emerging.
  • And lots of surprising white space opportunities (segments of shoppers, categories and more….). Hint: Pet Owners.

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Watch the video episode:

Wendy 00:09

Hello, I'm Wendy Liebmann, CEO and chief shopper at WSL Strategic Retail and this is Future Shop. This is where I talk to iconic class disruptors and something else. I don't remember what it is because I'm talking to my business partner. We're really talking to my business partners already making me laugh. Candace Corlett, so I never think about having a great lead into her. disruptors iconic class and something else and Candace anyway. Hello, dear Candace, how are you?

Candace 00:39

Oh, my dear Wendy,

Wendy 00:41

good to see you. As always, it's so always such a pleasure to just hang out in video land with you.

Candace 00:47

I know. It's so easy. It is it

Wendy 00:51

is. Well, there you go. That's what happens when you've been together for so long. On a serious note, last time we talked in the summer the end of summer, we were very focused on all things baseball. Most people know that I then stopped looking at sports listening to sports until pitchers and catchers show up in February. However, most people do not know of course, that you and I and WSL do work in the football and other sporting arenas. So we are now immersed in the football season as we keep an eye on our football clients who are looking to build innovative merchandising and retail experiences at stadiums. So anyway, now so

Candace 01:32

football going, right, we need to add the NBA Wendy.

Wendy 01:36

So here we are in the middle of the football season or towards the end anyway, enough of that that was just my little pitch for you to all know that we do other things and health, beauty, food, beverages, pets, and anything retail. So there you go. Here we are towards the end of the holiday season moving into 2024. And so Candace and I want to talk to you a bit about our latest work, our latest research, as you know, we're always talking to shoppers about how they're feeling about things and how that's impacting what they do and how they spend. So as we come towards the end of the year, we have some new workout that we are calling caution retail curves I send to Candace, who's going to be the caution. And who's going to be the curves. I did you pick curves I picked cause Oh, well, whatever. So that new work was really designed to help our clients, all of you think about what 2024 and the beginning of 25 will look like. And if I'm doing a little pitch. Before I let Miss Candace, tell us much about what's going on in the world of people and shopping. This is one of two pieces of work studies that we've just done that you really do need because it will set the ground for you shifting ground caution curves for 2024. The other piece we'll talk about for a minute is some another piece of work that we've done an update on all our health and wellness work that we do, which is also interesting. So anyway, long intro drum roll or we go hey, Candace, what's been so interesting in that study as we move towards the end of the year.

Candace 03:14

Well, you know, Wendy, I think that there is a big gap between what we hear the newscasters and the politicians report about the economy. And what shoppers are telling us, we have some startling numbers, we track people's attitudes towards their future finances, and the percentage of people who say that they are barely holding on to their current standard of living doubled from 2021 to 2023. That doesn't happen very often. optimists are down and people who feel secure are down. So the shopper is painting a very different picture from the economists and the politicians. So shoppers are not reflecting what we're hearing on the news media, and from politicians about the economy. And that's a whole other topic. But shoppers feel that prices are still going to continue to go up even though gas prices have settled. But they are looking at, you know, the price of eggs and bread and rent everywhere they shop.

Wendy 04:36

And of course then you've got student loans coming due and all of those things, the pressures there right

Candace 04:42

now we do and the interesting thing about student loans is that it is hitting hardest at the shoppers that brands and retailers covered most millennials Gen Z and parents of young children and if Do you want an explanation for maybe why traffic is down? It is certainly with people coming face to face with having to repay those college loans to say nothing of the rising cost of housing, groceries, utilities and medical expenses. Yeah,

Wendy 05:19

the other thing that strikes me in all of this is because, you know, we've all been out looking at stores, obviously, the holidays, all of those sorts of things. So there's all of that. And sometimes we think consumers, people decide, you know, it's the holidays been a rough year, carpe diem, I'm going to spend and be done with it or not. And we've said it in spite of the earlier in the year projections by the National Retail Federation, we didn't agree with them when they were so optimistic, and they've finally changed their comments, their story. But the thing that struck me when I was out the last couple of weeks is there's not that matches, it's really interesting to buy. I mean, I was in Anthropology, which I love. Sorry, Anthropology, I'm gonna dump on you, looking for holiday presents for the office and things like that. Nothing. I was in the Apple Store, returning something, fortunately, not buying something returning something. I was stunned. It was like I've seen all this stuff, even if I was willing to spend $50 billion on a watch or a phone or something. And it was like, this is dull. This is commoditize. So anyway, that's just my sharper point of view.

Candace 06:24

Well, on the other observation is, everything is on sale. And we are looking at 30 40 70% off sales, friends and family day at Macy's. I told you my story about walking down Amsterdam Avenue, my destination was the quilt shop because things were 30% off. And then I'm sitting having a coffee and looking and even high end jewelry, like Alexis Bitar has a sign in the window 30% off and two doors down, the iframe place has a sign that says 30% off. So people who never thought to participate in sales are doing so well.

Wendy 07:07

That's part of the reason I returned these earbuds to Apple because I bought them at Apple at some outrageous $ 249. Then I noticed them on Amazon for $189 or $185 or something. And that's a big savings big so then but I'd already was like enough already. I think on Walmart, they had them for 169 or something. And I would have changed some but I wasn't quite sure if they were the same anyway, whatever that is, to your point. There's so many factors here, this nervousness that concern about what the new year will look like. And I think to your point, this understanding that are this expectation that prices will not go down. Other expenses will continue shortage of housing all of those things not to be the Grim Reaper and the holidays, New Year, first quarter because we want to allow clients and companies to do well to this is a really substantial concern on the part of Americans about what 2024 will look like. And then of course toss in an election toss and all of those things, the world politics that just make people feel very concerned. So are there any bright spots that in this new work? We've seen new segments of shoppers categories? I know one?

Candace 08:20

Well, I think you know, there are the new utilities, the mobile phone and the streaming service, and no matter how much they go up, people will pay. There is also a commitment to convenience. We formed habits around convenience. And we've become such a convenient oriented culture that we will do curbside pickup, even though they're charging us $5 For someone to run around up and down the aisles for us. I think that there are not a heck of a lot of bright spots.

Wendy 08:54

While we no one. Shall I give you a clue. Woof woof Meow, meow.

Candace 08:58

Very interesting. We did a deep dive into pets because pets get treated better than children. I mean, we did a blog on how people with pets will hold on to their values. I mean, they will buy organic, they will buy vegan they will buy natural

Wendy 09:18

for their pets not just for themselves for their pets, right? Yes,

Candace 09:22

they will cut back for themselves. And I'm wondering if you know if your pet gets sick pet insurance is really expensive, whereas you have insurance. And so maybe people are factoring in if this pet gets sick. I'm looking at two $3,000 in bills.

Wendy 09:38

There was another thing in our caution curves. I'm coaching your curves of research which is fascinating that I thought about pet owners that reflected that pet owners forget pets, but they also buy more presents

Candace 09:52

when you're doing they entertain more and they just seem to be the generosity that is exhibit Did for their pet seems to overflow into their whole world,

Wendy 10:03

which there's a segment for clients, listeners, viewers, all of those things. Always dog

Candace 10:09

or cat in your head. That too,

Wendy 10:12

but I was thinking about that and how do you as listeners viewers, think about as we move into 2024 25 this real need to challenge the accepted norms and look for new whitespace. So there's one that sounds really bizarre. Why would you look at a segment called pet owners when you don't sell pet products, it's not just showing a pet in the ads. But it's also that this group of people for some reason and knowing Candice and Debbie and Devin and team that will just keep pursuing this to understand why but this group of people beyond what they do for pets are more hospitable, more engaging, entertain more. This is a segment that if you're on the beauty business, you probably wouldn't even think about Misha looking for dog shampoo or something that even they're not. And so this tells us in really important ways that we have to go beyond the typical segments and assessments as we look at things and look for growth in 24, 25. Because if we just keep looking at things the same way we will miss some of those opportunities. So I found that particularly fascinating in all the work we were doing and that the other thing that I found really interesting in this the obvious cautions about spending in general I was fascinated to think about the channel shifts and having conversations with some retailers that we stay close to to listen to what's on their mind for our clients and ourselves. And talking about the relevance of different channels you know, how critical is that you talked about convenience, the drugstore on the corner, which we've always thought of as a convenient model convenient place, whether it's for my health or milk, oh pet food, that hat is that really convenient now because you know I can Amazon Thank you click and it can be here or FreshDirect or wherever in an hour or two. What does that definition of convenience really look like moving forward? And how do we think about things in a different way about is it about easy or is it about you know, how do we articulate that

Candace 12:18

we articulated by price, and I am in awe of how the dollar stores Aldi and Lidl are on everybody's list, if you live near, I was talking with a woman a client last Friday, and she said she is in and out of Aldi twice a week. And you know, she's an affluent woman with two daughters, but she's in and out of Aldi twice a week. And that is the new convenience and affordable convenience. And you're right about Amazon, you know, if you don't need your ice cream fix this hour, Amazon has it for you the next day.

Wendy 13:00

Yeah. The other example I'll toss into that, which is when we think about the relevance of retail and what we're hearing from people as shoppers and their preferences. I mean, there's a product I love which is a skincare product and the makeup product that I love that has been out of stock in my drugstore for forever. That's where I get all my skincare. And I finally said to the woman who works in the department was restocking the shelf. Are you just out of stock of this continually? She said actually, I think they might have just, we're not getting it anymore. I think the company may have discontinued at L'Oreal miracle blue, which I love. Anyway, she said you might try Amazon, right? So I went on to Amazon, right. And then all of a sudden, I realized this a product I love I do not want to be out of stock of this product, you know, I do not want to not get it. So all of a sudden, I signed up for a subscription for it to be live. And so now there's a reason I'm not in the drugstore. Because well there are other things, but maybe I'll put those on this. So you know all of these things that forced you

Candace 13:58

while hanging? Well, we're going to check out the subscription model in one of our studies and 2024. Because the savings I mean, that's the lead line on subscriptions, not that you will run out, but how much you will save.

Wendy 14:14

See, I didn't care about that I cared about wanting this product. I couldn't get any more. But you're right then I was like wow, look at how cheap This is. And I have prime so I'm not going to charge

Candace 14:23

when you're looking at 55% of the population that has virtually no discretionary income or less than they had last year. The subscription price becomes very affordable.

Wendy 14:37

So I think those things are really interesting to me the other thing you were talking about value and price. You know the other thing you know, again, we listen to what people say we observe we're terrible, sticky bakes if everybody knows what that term is in Australia, you know we listen on subways and places and traffic and lines of restaurants the best ride in theater line The lines wherever. So all of those hearing people start to talk about no you can order from, you know, whatever Alibaba team, you whoever, wherever. And you get the cheapest thing in the world bad for the environment maybe bad geopolitically? I don't know. But that option of what is convenient where I can get the lowest price if that's what I want? And then okay, well, what does that mean for these traditional places I'm used to seeing on street corners. So I think all of this is really important for people to understand and not just the underpinning of concern that people have about their finances and their financial situation, as they move into money more.

Candace 15:40

Now, there's this this mix shift going on in access to products. And I think, you know, we're seeing smart retailers deliver more services, because they know that the merchandise is going someplace else. And there are not many of them who managed to present their website in store. So people think first Oh, I'll go on this stores website and order. Well,

Wendy 16:05

you talked about that. We've been talking about one of the stores we really love and, and you all know we do these innovation, these retail safaris, and we just took a group to look at new ways to think about loyalty. A couple of weeks ago, we've been doing a lot in that space, because we know a lot of you are really seriously thinking about how to innovate either your brand, your marketing, merchandising, digital content, or your physical stores. Now as things aren't moving out, and about but in one of those trips, we took a group to one of the places went to see was Petco. And in New York City, there's a Petco on Union Square, which if you haven't seen go, we'll do a Safari for you here and I'm allowed to pitch and this store to your point about services. I mean, in the window, they're grooming the puppies. And listen, you just want to go and sit there, even if you don't have a puppy, and watch what they're doing. And then you talked about the services that Walmart's added their pet services in Monroe County

Candace 17:06

veterinary services. And, you know, it's so easy to go to the Walmart and drop your dog off to be groomed or drop your dog off at the vet, and then scurry around and get the few things that you need at Walmart. I mean, that is the new definition of getting a lot done under one roof. Yeah,

Wendy 17:25

that is an interesting thing. Because as we've been looking at, we're doing some futures work as you know, for one of our clients, and in that work, we've been trying to really challenge the way of thinking as it related to Okay, convenience is that everything under one roof, the big Walmart, the Amazon everything Alibaba, you know, fill in the blanks. Is that that model of convenience, and or then what happens to all the other places? So then does it have to be very specific and very category oriented, like this Petco with the services with the products, all of those things in one place, you know, the beauty specialty, the vitamins specialty, what does that look like? So they're all the things we're really seriously looking at as we move into 2024. And think about the shifting, you said seismic shifts, the shifting landscape that we are seeing, and really challenging the traditional orthodoxy as it relates to how do we all have to go and do business? And how do we present ourselves as brands and retailers in this emerging world? Was there anything else in the curves and cautions cautious curves,

Candace 18:38

you know, Wendy, they what people will give up? I mean, they continue to want high protein, natural, no added sugars or artificial ingredients. But what they will give up is things they have to pay more for. And I think it's time for us to start making the case for why organic, why non GMO? why plant based ingredients? because these products usually cost more. And, you know, the explanation of why I would pay more is kind of esoteric, not everybody gets it. And I think the other thing that we're headed into the flu COVID RSV season, I was shocked to realize that the people who are most concerned about getting sick are Gen Z and millennials. And when you think about that, it makes sense because they are the ones who can afford a disruption in the routine. God forbid you should have to call the babysitter for an extra day or an extra couple of hours. And you have to get to work and medical bills mount up. So I think people are when you reflect on it, Gen Z and Boomers have their routines, but millennials and Gen Z cannot afford interruptions.

Wendy 20:01

Yeah, and I think we saw that in earlier work we did this year or last year and our wellness studies that you know, I can't afford, why would I be willing to pay more for, you know, something that related to health and wellness, because I cannot afford to be sick, I cannot afford to be out of work. Like

Candace 20:19

all of our information, you know, it's cumulative. And we did see that where people said, I just can't, you know, I will invest in healthier products, because I can't afford to be sick, I can't afford to be out of work. I can't afford to disrupt the routine. But

Wendy 20:37

that talks to what you were alluding to before, and I was to in some ways, we have to be able to tell the stories, in more effective ways to support why we're all doing whether it's a brand, whether it's a category, whether it's a retailer, digit, whatever it is, we have to be telling that a story is because much of us were the commoditization of everything at a fingertip, you know, click or snap. And here it is means that for somebody to make a conscious change, or spend more on something or add an extra something to their list, then it's really critical that we explain why. And I think you alluded to that when you talked about ingredients and things.

Candace 21:24

We have a study coming out the end of next week on the conditions the importance of conditions for men and women. And in there, we're going to see how food is a strong competitor for vitamins and supplements. Some conditions I had to look up because healthy diet is a cure and a remedy for people with endometriosis. I had no idea.

Wendy 21:52

Yeah, I think that new health work that we're doing wellness, health, wellness, whatever we're calling it, it'll be the equivalent of cautious curves or something is that there are so many things now that we talk about in the health space, whether it's erectile dysfunction, whether it's menopause, all of these things that nobody ever talks about before that are now being talked about, which are both opportunities because they can be solved with product or their opportunities because we can sell them as products with products and services to support solutions. So that's the other thing that's disrupting on the good side is okay, this is great. These are things people are dealing with, and what are the solutions for this? And okay, now, where do they go on the store? Who's interested in it? Who is buying it? Who isn't buying it? How do we need to treat it? So that's the other thing I found really interesting in this work as we final down to think about these emerging, emerging and emerging conditions that we now speak of openly.

Candace 22:52

conditions they used to be taboo and are now on everybody. Low testosterone, muscle strengthening, hair. You didn't used to talk about those, and now people are talking about them. Yeah,

Wendy 23:05

it is interesting. We had, as you know, Muriel Gonzalez from The Vitamin Shoppe on the podcast a couple of weeks ago. And it was fascinating talking to her because I go into Vitamin Shoppe, I buy bits and pieces, but you look at the products, they've got the brands they have there, and you go, Oh, I have Where did all these come from? And who are those in influence of, you know, brands really influenced by some jock or person or celebrity somewhere. And the dynamics of that, but your point about food, healthy food, nutrition, things like that. Michael Clinton, who was also on the podcast a few weeks ago, months ago, when he talked about his new book, roar, I'm talking about roaring into the second half of your life. And one of the things he had his first in person symposium, all of those, you should register for the raw subscription. Anyway, that aside, I'm doing a lot of pitching. This must be your own Christmas pitching. Sorry, I'm excessive

Candace 24:00

wave. You are excessive moving beyond the time limit 32 second commercials over

Wendy 24:07

Candace is going to pull the plug on me any minute. But what was interesting about that he had a series of doctors, medical professionals talking about whenever in longevity. And one of the things they talked about was well, it's very complicated. Longevity is very complicated. Because the best solutions are the foods you wished the exercise you take and the sleep you get. So you go like okay, there are some solutions. Okay, people tell me that story, as you were saying. So that new report, I think is very powerful. I think it's quite diagnostic. So that beyond the broader study, which is really about how people are feeling economically about 2024. This is also about how are they feeling health wise, which is the other piece which is interesting.

Candace 24:53

The other piece is habits. We all know we get into habits and routines and it's really hard to break them. And even people who admit that they are secure or optimistic about their financial future or being cautious and once used instill that caution. It doesn't go away so easily. Well, I think we're looking at a couple of two or three years of extreme caution, especially if prices don't come down. And shoppers, over 90% of shoppers agree they're not coming down. And

Wendy 25:29

I do think you also see, and we noticed it in this isn't a pitch, although could be a new tool that we developed about a year or so ago, some of you will know it, because thank you for subscribing, called the shopper performance index. And this is where we generally look at sort of broad macro trends that are emerging and the implications. This is quite specific. This is about how people rate the importance of certain attributes in a category and then how well a retailer does on those attributes for the shopper. So short version of the long story. But the one of the things that struck me in that work most recently was when we looked at the impact of price increases on categories, like vitamins and things like that. And all of a sudden, you saw the perception of the retailer decline. Because of that those increases, which may have been small and incremental. But all of a sudden, to your point about shoppers and habits and things, all of a sudden, they're just we're seeing that reflected in how they feel about not only the category, but the retailer as a result of that. So I think, to your point, you're always very wise about these things, the longevity of some of these issues. It's not that people won't spend, it's that you have to validate why it's worth it. And the kinds of choices people are going to be making aren't going to be necessarily the obvious, this brand to that brand. Particularly and you talked about this last time, I think the increasing improving quality of private brand or exclusive brands, you know, why do I buy X when I can find that

Candace 27:05

people now have so many affordable choices? Yeah,

Wendy 27:10

and interesting choices. Interesting. Yeah, right. And,

Candace 27:13

you know, well packaged choices and store brands that can keep up with innovation. But there are other opportunities, too. I mean, most adults are going to get flu, and RSV, or at least flu shots. And they're going to do that in drugstores. And that is a definite traffic driver. And how are drugstores going to maximize that? You know, how are they going to encourage people to stop in the aisles and put more things in their cart instead of getting their shot and leaving?

Wendy 27:52

Well, that's to your point about food and nutrition. That's why I think a lot of the regional grocers that, you know, we see are being very innovative, and third retailers doing some really, really interesting things across the breadth of the store. And I think that's the kind of thing we have to think about who are the competitors? Where should we if we're a brand, think about where we're putting our products or our services in the coming years. So there's a lot 2024 is going to be for many things a year to keep our eye on, elections, economy, world, global, chaos

Candace 28:27

Candace 28:30

on the shopper's perception of all of this.

Wendy 28:34

That is the takeaway so what 2024 will bring will keep us all on our toes of course, we will be close to the shopper as always, I think we've got an interesting road as we move into January, February in particular. That's why my last pitch of the day, all the new work, okay, people get on the website sign up for it. Much to be said much to be seen in all of this. And there we go. What's your favorite holiday gifts so far? Ms. Candace? Are you just bought out of your mind? Unless it's for me? Don't tell me because I want to surprise

Candace 29:05

you. Now, I'm chasing the sales and like you, you buy something one day and it's a mindset and you get in the habit of chasing the sale.

Wendy 29:17

Of course, you're not a stupid shopper

Candace 29:21

like you with your airpods. I mean, I'm a big museum Gift Shop shopper and I got really annoyed because they sent through this super discount after I had placed my order and I called them up and you know you feel badly doing that with a museum but I got my money.

Wendy 29:40

Oh rubbish. I have to be all be smart shoppers. That's all we can say. So that's the banner for 2024 Know your shoppers will be smart. I know your shopper. That's right you be a smart shopper

Candace 29:52

and don't make any assumptions about who they are or what they want because we'll tell you In our house repair shops reform,

Wendy 30:02

oh, that's your final pitch? So I don't even have to summarize this conversation. You everybody has their list. You know what you need to buy, you know what you need to subscribe to the good news is it's a lot of free content on our website, I haven't said that for a long time. So jump in there use that and I promise not to pitch one more thing except a baseball.

Candace 30:25

And if any of this is confusing, just call.

Wendy 30:28

Exactly. I'll give you a Candace's his cell phone number. Anyway, it's always a pleasure. This is one of my favorite podcasts with you because we just talked. So may our football team win that'll make our clients happy and we'll sell lots of good merchandise. We'll be happy with that and May you all be well and happy and Kansas. I will see you soon see you in the future. So long, Wendy.

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