Is Consumer Confidence Getting Reignited?
You may have seen it. People are beginning to return to the streets. Maybe it’s just spring. But maybe it’s something deeper and more hopeful.
With the recent economic turmoil, there’s been a lot to be worried about lately. But as we see some indicators that lockdowns are easing and stimulus money is being disbursed, we can take this time to look forward with some optimism.
Confidence Declined in March
It doesn’t take an economist to realize that consumer confidence showed a nosedive in the past couple of months. According to the Consumer Confidence Survey® that’s published every month detailing attitudes and buying intentions, confidence sharply declined in March after an increase in February and the Expectations Index (consumers’ outlook for the short-term for income, business and labor market conditions) declined as well. Needless to say, things looked pretty dark.
Are Things Looking Up?
But now, things look like they may be taking a turn. According to the HPS-Civic Science Economic Sentiment Index which tracks consumer sentiment and their willingness to make purchases, several indicators started to make an about-face.
The ESI, as it’s called, is a real-time index that measures economic expectations going forward as well as current sentiment. This indicator shows a more updated accounting than other measurements. Confidence is a funny thing and can be psychologically motivated. Is it wishful thinking for “normalcy” to return? Is it the inoculation of government money into the system? Whatever the cause, sentiment can be powerful.
Consumption Psychology at Play
We know this because consumption is often psychologically driven. And consumer spending currently drives approximately 70 percent of our GDP. In fact, after the first wave of stimulus checks were received, there was an increase in online spending with Shopify showing what they called “Black Friday level traffic”.
But even while consumer sentiment was crashing, online spending was up. According to a survey conducted by Engine, figures published from March 20 to March 22 indicate that 42 percent of people surveyed had increased their online spending. Much of that was because it was one of the only ways people could get the goods they needed during quarantining. But it didn’t show any reluctance in spending the money to get those goods.
Will This Turn Into Outright Optimism?
Will this continue after this first wave of stimulus cash is gone? It’s difficult to say. But we now see movement across the United States toward tiered lifting of quarantines and business lockdowns. Behind that movement may be an exponential pent-up desire for everything from haircuts to gym memberships. After being curtailed from moving about freely for several weeks, we’re seeing an increase in people who have lost patience with waiting things out and are ready to get their lives back to normal.
So What Happened With Marketing During this Time?
Not all of us were reorganizing our closets during COV-19. In fact, a recent blog post on Singular cited 250 CMOs’ take on marketing during our current pandemic. Every one of them said that this was not the time to stop marketing but, instead, readjust their strategies particularly when it came to digital commerce. With more people confined at home, the way they marketed and the messages they sent had to be reconsidered for the time and circumstances.
What Can We Look Forward To?
What does this mean for our customers and clients?
It may mean that once this is all behind us, people will be downright exuberant about getting back to normal. We hope that small businesses and retailers have been able to ride this out successfully. For those who have taken this downtime to double down on their SEO, it could have an exponential impact on business. Here at SSA, we look forward to seeing that happen and offer our help to get you back on track if your SEO has taken a back seat.