Yahoo Finance’s Brian Sozzi and Alexis Christoforous speak with TruePublic CEO Kaben Clauson on how Americans will spend their money after the coronavirus isolation ends.
ALEXIS CHRISTOFOROUS: The COVID-19 pandemic has definitely transformed the way we, as consumers, are spending our money. But the question is when we do start to reopen the economy, will consumer spending bounce back, and will it go back to normal? Here to take a deeper look into that we have got the CEO of TruePublic, Kaben Clauson. And Kaben, good to have you with us. I know that you guys--
KABEN CLAUSON: Thank you.
ALEXIS CHRISTOFOROUS: --conducted a survey recently. And you asked folks, what, if anything, will they be spending their money on when we reopen. What did they have to say?
KABEN CLAUSON: So TruePublic is crowdsourcing the opinions of people all across America. We're able to get to two hard to reach groups-- young and wealthier-- who typically won't do a traditional survey. What we're finding is really shocking.
We knew a lot of people were going to be scared to go back, but the amount of young people, particularly-- for this study, we focused on 13 to 35-- were unwilling to go back to places like sporting events-- 47% until they have a vaccine-- gyms, international travel, domestic travel. The story, really, here is there's two young types of young people in America. There is one type that doesn't really care about this coronavirus situation. And they're still seeing friends, and they're still going out. They're going to be very quick to go back to most of these things. What's surprising, though, is there's a group of people who are going to wait an awfully long time. We could be looking at nine months to a year, especially for things like international travel.
ALEXIS CHRISTOFOROUS: What about-- Go ahead, Brian.
BRIAN SOZZI: Yeah, no, what do you-- is it just vaccine-related, or is it just a lot of these young folks have concerned about their job prospects?
KABEN CLAUSON: Two factors here. The Generation Z and Millennials are hit very differently by this. Millennials are feeling the pinch a lot more as a lot of them are starting to start families. If you remember back in the '08 recession, a lot of them were coming out of college, so this generation has been decimated by this twice. Spending is not as much the issue. What we were getting at here is do you feel safe going to these things?
I think the most shocking one, and the industry that has to be really concerned, is the gym industry. Gyms already had such a challenge convincing young people to sign up for these large gyms. And now there's actually a health crisis developing around it, so that's a real issue.
I think the group that can rest the easiest is restaurants and bars. Restaurants and bars are going to see young people come back in droves. But international travel, domestic travel, it's really going to slow, and needing that vaccine, I think, is the big change that's going to keep a lot of people back. Until that vaccine comes out, they're not ready to do it.
One other interesting thing for you-- you guys mentioned Neiman Marcus earlier. What we found is something even more of a threat, I think, to long-term clothing retail. 31% of young women in this country bought clothes online for the first time in the last three weeks.
Almost all of them, around 90%, are saying they're going to continue to buy clothing online again. So what happened was a lot of people have been forced to buy clothing online for the first time, whereas before, they were always held back because they felt like they needed to go into the store and physically try things on. So that's going to be an interesting thing to watch as well.
ALEXIS CHRISTOFOROUS: Yeah, I was looking through your survey. 33% say they shop online more now and will continue to shop online more, even after a vaccine is available. But let's get back to when there is this vaccine available, which we are hopeful for and which we're hoping can happen in the next 12 to 18 months, did your survey find that people are going to be comfortable going back to all of these large events, like sporting events, like events like Coachella, for instance?
KABEN CLAUSON: Yes, with one caveat. The vaccine is key for sporting events, for gyms, for domestic travel. There's still almost 30% of young people are not going to want to travel internationally, even after a vaccine is out.
Now I will caveat this-- I will caveat our research in this way, we are in the midst of a crisis. So whenever we're in the midst of a crisis, we know there's a bias that forms because if you're stuck at home, you're watching the news all day. You're thinking, ah, it's kind of scary to go back out.
Let's wait, and we're going to watch this data change week by week. And our hope is as people start to venture out-- and we know that young people have a herd mentality, right? If all your friends are going to a sporting event, are you going to be the one or two that stay back because you're worried about corona? It's going to be interesting to watch it happen.
One other interesting piece for us has been the deterioration in how people are viewing travel. Like travel-- I think the idea of travel is going to completely flip. We've seen comments on TruePublic from young people across this country where they're re-imagining what the ideal trip is. A lot of them are seeing traveling within the United States as something that's more enticing for them on their next trip. This could be a boom for places like Miami, and Las Vegas, and more local travel spots as opposed to the ones outside of the states.
ALEXIS CHRISTOFOROUS: That is really interesting, and especially because you are looking at the younger set. How is this going to affect study abroad programs at colleges? You know, a lot of that still yet to be seen, but great insights. Kaben Clauson, CEO of TruePublic, thanks for stopping by. We'll have you back for updated results, OK, as you continue to survey the young.
KABEN CLAUSON: Absolutely. Thank you.