The latest quarterly reports from Walmart, Macy’s, and Cisco, together with the continuing decline in beer and soda, have Wall Street analysts talking about consumer exhaustion. On Wall Street, consumer exhaustion is just a number, but I believe consumers really are exhausted in some sense. Consumer exhaustion could imply a few different things: bank accounts drained by bank fees, workers not earning as much as they would like, consumers tired of shopping and buying things.
I know in my case, it is mainly a case of time pressure. My income is higher this year, but aside from a series of new energy-efficient appliances, my spending has barely budged. The appliances may help to explain why I am spending so little. It took me from May till August, in my spare moments, to bring home and install a washing machine and dishwasher. Now a dryer and a wood-burning furnace are waiting for my attention. Until those installations too are complete, I may not have the energy or the inclination to do much shopping. It was hard enough for me to pull together the energy to write this blog post, and that didn’t require me to drive anywhere. So it is not just my strategic purchases that are filling up my schedule, and from what I can see, everyone has something challenging or difficult that they are trying to get through or work around.
Time pressure is part of the story of consumer exhaustion. Empty bank accounts and a weak job market must also be taking their toll. But I have to believe there is a note of actual fatigue in the consumer fatigue that is showing up this week. Consumers are postponing purchases just because that makes their lives easier today. It is a shift in attitude — from “A new gadget will make my life easier” to “Just staying home will make my life easier.”
Lower prices and more interesting merchandise don’t have much pull in this state of mind. Over the weekend, I missed out on a going-out-of-business sale, with everything that remained in my favorite garden shop marked down 80 percent, then 90 percent. It seemed simpler to stay home. To win back bargain-weary consumers, retailers might look for ways to make shopping seem easy again. It would be the opposite of the loyalty programs and impulse merchandising that are at the heart of retail these days. Retailers may also need to be patient, as opposed to the one-year-and-we-give-up we just saw from JCPenney.
If consumers feel reluctant to go shopping, it is because these expeditions have ended badly more often than not in recent years. The tricks that retailers go through to get into people’s wallets create a hostile environment, a minefield of sorts, so it is hardly surprising if people stay away when they can. Three years ago, shoppers were going into Walmart on payday and spending all the money they had. The payday effect is still visible at Walmart, but shoppers are less likely to be loading up their carts, more likely to be getting a few things and getting out. As stressed retailers try to win a few bucks from stressed consumers, it seems the stress is getting to everyone.