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Consumer Confidence Index drops in the month of August

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Katie Thomas, Lead of Kearney Consumer Institute joins Yahoo Finance Live to break down the latest Consumer Confidence Index numbers, as well as her new report on consumer shopping trends.

Video Transcript

MYLES UDLAND: Top of the hour, we got the latest downbeat data on consumer confidence, this time from the Conference Board. That follows what we've heard from the University of Michigan last week. And joining us now to talk about the state of the consumer and what habits have changed, which haven't during the pandemic, let's bring in Katie Thomas, lead of the Kearney Consumer Institute.

Katie, thanks so much for jumping on this morning. So let's just kind of start with how you guys in your data are seeing the state of the consumer. However you define that, we've seen a lot of habits change certainly. But we've seen a robust rebound in spending through most of the year. But it does seem to have leveled off a little bit. I'm curious if there's any data you guys are looking at that either supports or contrasts with some of that other economic data that's out there.

KATIE THOMAS: Absolutely. Thanks, Myles. So what we've really decided to dig into as a result of the changing habits during the pandemic was the idea of consumer convenience and how that's frequently stated as a top priority now for consumers. We've all ordered more online and gotten more familiar with technology. But after talking to consumers directly for our latest quarterly briefing, our Kearney Consumer Institute brief, we realized the way that we often discuss convenience, usually around speed and speed alone, is not how consumers are defining convenience.

So we really deconstructed this concept and started to tease out, instead, the different tradeoffs consumers are willing to make with their time. So, in fact, if you think about all of us in the day-to-day, we're often willing to go out of our way or even be inconvenienced to go to the grocery store. You know, favorite snacks from Trader Joe's, I'll drive an extra 10 minutes.

And even how we define convenience, in some cases, it's easier for some people to run into the store than to get delivery. And so, these time tradeoffs and these shifts in consumer behaviors really ladder up to a broader experience, rather than being overly focused on the nitty gritty of speed in all aspects.

BRIAN SOZZI: Katie, I think we've been talking so much today about Zoom's quarter and how its stocks is getting slammed. And it's clear that consumer behaviors are, in fact, changing. And they're willing to change them further as they go back to work or as they go back to school. I mean, do you think that focus on convenience and delivery, that will go away, as people get back to a normal life, like get back to their 2019 lives?

KATIE THOMAS: Absolutely. I think you're seeing it already with the comp store sales numbers we saw with Q2 with Target, Walmart, Macy's. People were excited to get back into the store. And that's exactly what we asked them. Overall preference in store versus delivery, we still saw in-store across the board-- food groceries, home decor, apparel. And so, consumers really loved that in-store experience. And they're willing to get back there.

I mean, certainly with the confidence numbers, you're seeing some reticence around the Delta variant and a little bit of reluctance that we were starting to overcome. But in general, I think some of those convenience metrics were really due to forced closures and really high levels of concerns, as opposed to permanent behavior changes.

MYLES UDLAND: You know, Katie, a company you guys highlighted in your report is StockX, about kind of the frictions, the inherent frictions that are within that transaction. But I'm also curious just about where they sit in consumer habits. You look at the streetwear market, the sneaker market, the watch market. Some of this is bleeding into NFTs now, I guess. But there's been this push into luxury. And all this excess money has fed into goods. How has that changed maybe the landscape here for consumers as well and maybe leads to more permanent changes after the pandemic?

KATIE THOMAS: Well, it's an interesting commentary I think on overall access. So the reason we highlighted StockX in our report was because consumers are willing to stretch to accommodate a transaction for limited edition sneakers and some of the other products that they sell. So they offset that by having a really strong differentiated offering and an interface that's super user-friendly.

I think in general, we've seen luxury hacks to think about how they're going to redefine themselves in terms of access, as consumers are changing their behaviors in terms of resale, all of those different shifting dynamics there. But in general, there's still-- people still want that exclusivity. And that still drives differentiation for consumers. So it's really about just figuring out what levers you can pull and how far a consumer is willing to be inconvenienced or kind of wait or spend more in order to accommodate a transaction.

MYLES UDLAND: All right, we'll leave it there. Katie Thomas, lead at the Kearney Consumer Institute. Katie, appreciate the time this morning.

KATIE THOMAS: Thank you so much.