Attention to Retail Panel Recap
How do you offer guidance on consumer behavior in the current economic climate, when the only certainty is uncertainty? You gather the top voices in retail, media, and technology from the NRF, CNBC, and Affinity Solutions and ask them to draw on their experiences, their deep understanding key economic indicators, and their expertise in data-driven insights to provide tangible strategies for navigating this unprecedented territory.
They delivered.
At our inaugural Attention to Retail event in the heart of Manhattan, the audience including marketers, advertisers, bankers, and retailers, benefitted from an enlightening discussion featuring CNBC Senior Economics Reporter, Steve Liesman, Executive Director of Research at the National Retail Federation, Mark Mathews, CEO of Affinity Solutions, Jonathan Silver, and Courtney Reagan, CNBC Senior Retail Reporter. The discussion titled, Every Purchase Tells a Story: Unpacking Consumer Behavior in an Uncertain Economy, focused on the current economic climate and what brands and retailers can do to meet the moment.
Economic Outlook: Understanding the Gap Between Perception and Reality
Despite ongoing economic uncertainty – largely due to flip-flopping tariff announcements – an overarching theme of the afternoon was optimism. Our speakers noted several crucial economic indicators remain strong. Wages are exceeding inflation and the most recent jobs report was better than expected with a 29K increase in employment in transportation and warehousing – notable as tariffs will directly impact these industries.
And yet, consumer sentiment is at an all-time low. Mathews offered some sobering historical perspective noting that usually when consumer sentiment falls this low, a recession follows. But the panelists agreed, we aren’t there yet and may not get there. Liesman said, “We don’t have a huge problem at the moment. We have an attitude problem,” acknowledging the anxieties of retailers and consumers. He cautioned that people are more worried than what is actually happening. In reality, businesses are still investing and consumers are still spending, even amid uncertainty.
During the next several months, it will be important to keep an eye on how businesses respond to changing policies and announcements. “The moment that businesses stop investing, can’t make the decisions they need to make, and stop hiring or start firing – all the things we’re saying about the economy right now, start to go out the window,” Mathews said.
What can retailers do to meet the moment?
Part of the gap between perception and reality stems from the reliance on survey data as the true pulse of what’s happening. How customers say they intend to spend — is often different from how they actually spend. Silver reinforced this point and stressed the importance of consumer purchase data as the true measure of consumer behavior. “Our data shows that consumers have their wallets open.” The CNBC/NRF Retail Monitor powered by Affinity Solutions tracks monthly consumer spending in twelve key retail categories. In April, the report showed total retail sales, excluding automobiles and gasoline, were up 0.72% seasonally adjusted month over month and up 6.76% unadjusted year over year.
To succeed, the panelists agreed that retailers need to understand not just broad category trends but also where and how their customers spending – outside their four walls. If access to these insights requires further investment in data and technology, it’s worth it. “Companies that succeed during a downturn are the ones that invest,” said Mathews.
Silver echoed the importance of leaning into strategic investments in times of uncertainty, noting that the right data and technology allows retailers and advertisers to change strategies and improve outcomes – especially because not all retailers will be impacted in the same way, at the same time. The panelists all agreed that now more than ever, retailers and advertisers, need deep insights into customer behavior and a true and accurate measure of ROAS to be able to adapt with agility.
Still, this issue of not knowing what the future holds lingers.
Mathews offered a view five to six months in the future, when retailers will feel some effect from the tariffs. Retailers will need to worry not just about selection, but critically about pricing, because consumers might not buy if the price isn’t right. “[Consumers] are, after all, the ultimate judge on price.” On the issue of pricing, Liesman explained that tariffs create a need for retailers to go to the third or fourth most optimal place for their goods, adding complexity and cost.
Silver reminded the audience to take advantage of their controllables. “You can’t change the tariffs, you can’t control unemployment and wage growth, but you can control what you do to respond to these pressures. The one thing retailers can do is get a better understanding of their customers.” He pointed out the need to consider customers at different income levels and geographic areas, noting we don’t live in a homogeneous economy. A price point that works for one customer may not work for another. For example, the low-income demographic is highly elastic, making their spending very sensitive to price changes.
Reagan agreed and expanded on this idea, adding a crucial observation about the retail landscape itself. “We often focus on the big players, but the TJMaxx market gap, that off-price sector, is much more important than we give it credit for. It speaks to a segment of consumers who are actively seeking value, which could be particularly relevant in this evolving economic climate.”
As a result, the group emphasized the need for nuanced understanding. Once retailers recognize and embrace that we do not live in a one-size-fits-all economy, they can better reach more customers because what resonates with one consumer segment might not with another.
Ultimately, this multi-faceted conversation painted a picture of an economy navigating a complex “transition of the transition.” While concerns about tariffs and historical indicators of recession are present, there’s also a sense of underlying consumer resilience and a call for businesses to be agile, data-driven, and keenly aware of the diverse needs and price sensitivities of their customer base. The path forward may be uncertain, but the insights shared offer valuable guidance for navigating the economic maze.
