It's Tuesday, April. I'm Oscar Ramirez from the Daily Dive podcast in Los Angeles, and this is reopening America. Vaccination rates are going up and people are ready to get out there and start shopping again. But how will consumer spending change? With the increased use of delivery apps and curbside pickup, grocery shopping might see the most sustained changes. Younger shoppers will also be a big force and apparel spending. Melissa Repco, retail reporter at CNBC, joins us for more.
Thanks for joining us, Melissa, Thanks for having me. As more people get vaccinated, a lot of companies and businesses are looking forward to how consumers spending will look like next. There's been a lot of changes that happened throughout the pandemic. Some of those things will stick. You know, the rise of online shopping has really made a difference for a lot of companies. So grocers, you know, might see a big, dramatic and long lasting shift in that sense. You know,
this curbside pick up all that stuff. And then young consumers, you know, they're gonna be driving a lot of this post pandemic purchases as they're the most willing to get out there, start buying and interacting with more people. So Melissa tell us a little bit about how consumer spending is going to change once everybody starts getting back out there again. To be fair, the jury is still out. It's still early days, and we're just starting to see
kind of the indicators of what people's mindset is. But I have looked a lot at different reports and surveys by consultants, which pretty much every company is passing through to try to get a better sense of what to anticipate in the month ahead, and one of the big themes that jumped out at me is that grocery behavior
has really shifted. You mentioned online shopping has gotten bigger during this time, but more of us are also trusting other shoppers to pick out our produced and our meat, and that convenience factor may really have a huge impact long term on grocers who traditionally didn't have a lot of online shoppers relying on them. The other thing that's really changed is that people are living differently, so more people are working remotely and plan to continue to do
that at least on some level going forward. So that may mean they're eating more breakfast and lunches at their homes in their kitchens, versus having them to capture it with coworkers. According to some of the data you had in your article, said they plan to spend more money on groceries, said they will spend less on dining out post pandemic. So that shift is there, and it's a
little sad because our restaurants need that business. But these are the things that people have kind of grown accustomed to. And you know, you talked about people picking out our produce center items for us. There's a lot of trust in that trust that they're gonna give you the quality stuff but also give you good alternatives when things aren't in stock anymore, and that you know people have been
doing that. That builds up a lot of trust in that brand, in those companies, and and people are gonna want to stick with that. So, yeah, you're right, that's a very big one. We also talked about I mentioned a little bit about young shoppers, you know, Generation Z. They're really ready to get out there and they're gonna be big drivers of purchases. Teams and twenty some things are really the ones that are starting to buy kind
of post pandemic purchases. Think things like clothes, and I'm talking about non workout clothes for want new shoes, and and also buying handbags, which is something that traditionally people
haven't needed as much. Those younger consumers also seem to be more likely to have the mindset of getting back out to the movies, out to malls, and so they may really be the first wave of consumers that companies see return and may also be more willing to spend money out at the restaurants, not just outdoor restaurants, but also indoor restaurants, so they're kind of leading the way with some of that spending. We've seen the fashion trends
change over time as well. Everybody's has seen those memes about how skinny jeans are and millennials, you know that's old news. And you know we're seeing like baggear and wide leg jeans for Generation Z now. So those are all things that are at play, and those companies have to cater to that, you know, they have to get ready for that. Contactless modes of shopping and dining are
still going to remain popular. Also after the virus fades. Cleanliness, all of these things that companies have really tried hard to work on. Those things are going to stick around for some time, and some companies have already spoken about how it's influencing how they think of their stores. So Target, for example, which continues to open more stores every year, they said they're going to factor spaciousness into their future design.
So having more room for people to spread out because we've all become works to social distancing and it may not want to go back to being crammed into aligned close together. So that's an example of how it may even shave things like architecture. Yeah, I mean, everybody wants their space and their personal space allowed to them, so yeah, definitely can see that sticking around and kind of in that vein. You know, a lot of retailers that are getting ready to come back have to start. You know,
it's kind of this balance they need to achieve. They've been trending towards a lot of online shopping, having employees pick out those items, getting those readies for curbside pick up all that stuff. And on the other side of things, some of the appearance of these stores have not been kept up so much because of kind of how hectic
things have been. You mentioned in another article of yours how Walmart and Macy's have been accused of having unkempt stores because of all the ruckets that's going around, and they really need to step that part of it up,
the appearance, or they risk losing some more customers. Yes, I think that's a misconception that people are either online shoppers or in person shoppers, and the reality is much more complicated, and that's why retailers need to think through how they present themselves, not just on their website but also in their stores. So often people's relationships with those brands are actually deeper, both online and in stores, and
they do a variety of things. They maybe use curbs I pick up some of the times, they shop in persons on the time, and it's more of a blend. So a lot of the time when people shop for groceries, they're actually going into the store sometimes and they're relying on those online shopping services other times. It's not an either or, and that's why this relationship between their store
and its appearance matters so much. But stores are juggling more balls in the air than they ever have, so that's why their stores are taking on all these new roles. They're storing a lot of those online purchases in the front of their store near the door, so that you can run in as a customer and grab it and
not spend a lot of time in the mall. So that's what's really challenging them is how much of their time should they be spending folding clothes and making the display less beautiful, and how much other time should they be spending making the online orders ready to go for consumers who do try these new online focused approaches, it is a tough balance. And some of the experts you spoke to, you know, a good storefront is one of your best salesman. It's it's so true, but it impacts business.
You know. One of the other people that goes around and kind of does analysis of all this stuff, they downgraded Walmart stock because of these unkempt stores and how sloppy they looked in some cases. And and it's just not it's not just Walmart, it's other stores. To Macy's was part of this, but it can impact their business and they're kind of credibility and here's the their dilemma
with that. So yes, R five Capital, which is one of the analyst firms that covers Walmart downgrade at their stock because they were saying, hey, look, you're offering a better experience for online shoppers than you are for in store shoppers based on what we've seen in stores. And the problem for that for businesses is it's more expensive to to build online orders a lot of the time
because you're having an employee pick and pack that order. Traditionally, something that shoppers have done for them spells when they come to the store and grab it and even carry it home. So all of those additional costs come with an online order. And if you keep pushing people to you online because the store experience feels inferior, but it
actually hurts your business. Yeah, I mean there's a lot of stuff to go through as we get back to this new normal, and consumers are more comfortable to get back out shopping. So a lot of stuff on both the business side and the consumer side. Melissa Repco, retail reporter at CNBC, Thank you very much for joining us. Thank you. I'm Oscar Ramirez and this has been reopening America. Don't forget that. For today's big news stories, you can check me out on the Daily Dive podcast every Monday
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