Consumer Confidence Plunges

This isn’t the kind of news that business owners want to hear as they prepare to reopen their businesses. Consumer confidence has fallen — again.

According to The Conference Board, the gauge of American consumer attitudes about spending dropped to 84.8 – below expectations and down from 91.7 in July.

That’s even far lower than in June when it was 98.3, which was regarded as fair amount of optimism building among consumers as the economy was opening and some people were being called back to work.

However, The Conference Board noted, the summer weeks rolled on with roller coaster reports about coronavirus cases, new waves of deaths, consumers’ distrust of masks and the disease, lack of leadership, lost wages, states pausing their reopenings, schools starting virtually or not starting, fear, and gridlock in Washington over extending unemployment benefits – “It’s all taking a toll on the American consumer.”

Economist Lynn Franco at The Conference Board believes consumers are getting more pessimistic about their economic situation.

“That cloud of uncertainty seems to be covering the majority of consumers,” Franco said. “There’s not much of an expectation that business conditions or employment are going to improve, and we’ve actually seen consumers grow a little bit more negative about their financial well-being.”

“Rising virus cases that are resulting in a pause or rollbacks of reopenings are no doubt weighing on sentiment,” opined Rubeela Farooqi, chief US economist at High Frequency Economics in White Plains, NY. “Consumers are also concerned about job and income prospects. Without virus containment that will allow a fuller reopening of the economy, confidence measures will remain under pressure going forward.”

With contradictory information circulating everywhere, most levelheaded consumers aren’t going to abandon caution like those who are partying as if there is no tomorrow. They are just as watchful about how to resume schooling for their children as they are about going to the local restaurant, supermarket or department store. But they are concerned that while they abide by the rules about masks, social distancing and washing hands, they see that their neighbors demean those safety requirements. Traffic flow patterns in department stores are ignored. Some people wear masks, some wear them incorrectly while others don’t wear them at all.

Nonetheless, even in this unfavorable environment, business owners must open their doors for their benefit as well as their communities and country. But how to do that? I believe that rather than trumpet products, which in most cases consumers still need or want, and prices, business owners should turn down the fanfare and address the real needs of their current and potential consumers. And that is to assuage people’s hesitation, concerns and fears. The marketing should focus on understanding and sympathy with customers’ anxieties and assurances that you are doing everything possible to make their shopping experience safe, secure and enjoyable as it was a year ago. And if you say “no masks, no entry,” then evict those who don’t.

Once you do that, word of mouth will attract shoppers to your stores.

I’ve said this before. You can also avail yourself of a range of cost-free expert consulting services for small businesses. The New Jersey Small Business Development Center is a fantastic institution that helps entrepreneurs launch and grow their businesses https://njsbdc.com/.