Consumer confidence is a funny thing. It is little more than a feeling, and yet it drives millions of dollars in business—especially around this time of year. A recent JLL Retail survey revealed that consumer confidence is high, making the outlook for the holiday season holly jolly.
Now, to be fair, Consumer Confidence is the aggregate for 5,000 U.S. households’ feelings. The Consumer Confidence Index (CCI), measures how optimistic people are about the economy. When optimism is high, people spend more money. When pessimism is high, people spend less. If you want to better understand the CCI Investopedia’s Video on it is rather helpful (and short):
The Importance of Feelings
However, much is riding on these feelings. Two-thirds of the Gross Domestic Product is dependent upon consumer spending (according to the video, anyway). Moreover, is there any question that the holiday season is the prime time for the majority of household’s consumer spending?
The JLL Retail survey predicted that holiday spending is expected to grow by 6% this year. The survey results also showed:
- Holiday Shoppers are starting early. 30% of U.S. consumers started before Thanksgiving and 30% more began between Thanksgiving and Cyber Monday. That means nearly 60% of shoppers were off and running before December even started.
- Holiday shoppers will be shopping everywhere. The survey said 40% would shop at more than six retail locations, and 66% of respondents said they would buy at Superstores. Around 44% will shop online.
- Holiday shoppers are changing generations. Generation X will spend more than Baby Boomers.
Customers are Irrational All Year Long
We are all influenced by our irrational feelings, and not just at the holiday season. We are just as irrational on the first day of spring or summer, or when we are on vacation. We are irrational on a random Tuesday—and every other day of the week.
The thing is, we don’t always know we are irrational or that our feelings are influencing our decisions. It happens in our mind, sometimes unconsciously. Our brain makes decisions about what we do based on the information it has, and a lot of that info is emotional.
Emotions become a hidden influence that drives the behavior of your customers, but it happens at an intuitive level. Feelings are always there, always interpreting our environment, and still affecting how, what, and when we buy things. Emotions also influence what we remember about the experience.
Our emotional interpretation of the world around us explains why we change our opinion about a restaurant’s experience when we go in its filthy bathroom or how a broken window makes us feel less safe when we are in a neighborhood we don’t know well. These emotional decisions are why we buy specific styles of clothes and drive the cars we do (hint: because we like how we feel wearing/driving them).
Sure, we have rational reasons for these behaviors also, but we only think of those after the emotional decision has been made. Some might call it “rationalizing.” I call it being a human who buys things.
We Feel Confident and That’s Good News This Holiday Season
The CCI is a summary of our collective feelings as consumers about how we think things are trending for our economy and our individual beliefs about our own household’s economy. It isn’t based on facts; not directly anyway. It’s our gut instinct—and it is powerful. After all, the vast majority of the GDP depends on it. I always say over 50% of the Customer Experience is influenced by emotion. Based on what we know about the CCI, one might say that over 50% of the U.S. economy is swayed by feelings, too.
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Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of five bestselling books and an engaging keynote speaker.
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Sources:
“Robust holiday season Spike Ahead, reveals survey.” www.retailcustomerexperience.com. 7 November 2017. Web. 21 November 2017. < https://www.retailcustomerexperience.com/news/robust-holiday-season-spike-ahead-reveals-survey/>.