Hi all 👋. I’m Trevor Williams, Hawke Media’s Head of Marketing, coming at you every Friday with an industry deep dive following our Thursday Special Reports.
Today’s issue – where are consumers spending money in 2021?
As we enter the remaining month of Q1 for 2021 (how fast time flies) we’ve seen increased market growth across several industries that consumers are currently focusing on, even as many consumers are still in a “savings” mindset – all the while disposable income increases.
According to the 1US Bureau of Economic Analysis, personal income across the board in January of 2021 increased by $1.954.7 billion, with disposable personal income increasing by $1,963.2 billion during the same time period.
However, it’s important to note that the increase in personal income has been attributed to government benefits as the result of COVID-19 response programs – so essentially, no increase has been seen without these programs.
BUT consumers are spending, there is a light at the end of a year-long+ tunnel that has affected, and continues to affect, over 2116 million individuals around the world.
As an example, we see this increase in spending when we take a look at the retail industry. According to 3CNBC, retail sales spiked by 5.3% vs. the 1.2% expectation by Dow Jones. Sales, excluding the auto industry, have also risen by 5.9% vs. the 1% expectation.
So, who are the top earners in terms of industries for the start of 2021?
- Online commerce (D2C) saw the biggest gains since January of 2020, up 28.7%
- Sporting Goods increased by 22.5%
- Building Materials increased by 19%
- Electronics and Appliances increased by 14.7%
- Furniture and Home furnishing increased by 12%
- Online spending with nonstore retailers increase by 11%
Even with certain industries gaining traction, there are still those that are struggling as COVID-19 continues to keep the world on its heels.
- Bars & Restaurants decreased by 16.6%; however, with places around the US opening at varying stages, we have seen a sharp increase of 6.9% in January 2021
- Clothing and accessories decreased by 11.1%
- Electronics and appliances decreased by 3.5% (important to note though that this category has seen tremendous growth in January of 2021, as outlined above.)
Consumer spending is the biggest factor behind economic growth for the US, but there’s some positive light coming into play.
We’re entering tax season, where the IRS will start sending out tax refunds and the Democrat-led House passed the $1.9 trillion COVID-19 aid bill (soon to face a vote in the Senate), showcasing a future influx of cash into the economy very quickly.
4We’ve also seen increased job growth, particularly in the construction, warehousing, and manufacturing industries as demand from consumers continues to skyrocket. With both job growth increasing, as well as additional cash flow, many consumers are predicted to increase spending.
Such spending will continue to drive growth for goods-focused brands as we end Q1 and begin to shift focus to Q2 2021. These brands are expected to continue to grow during the remaining months of 2021, meaning marketing budgets should be aligned towards this expected growth.
Gaps in the marketing ecosystem must be identified and filled if brands are expected to keep up with the demand of consumers – whether that be organic social media community building, developing a content strategy that defines your brand and drives SEO value, or encapsulating your audience with hybrid experiences that attach themselves to the core of your target market.
Empower, scale, and develop your business with a dedicated team of marketing experts. Reach out today for a free consultation from the marketing agency designed for all.
1 – US Bureau of Economic Analysis. https://www.bea.gov/news/2021/personal-income-and-outlays-january-2021
2 – Google Statistics. https://www.google.com/search?q=covid+cases+globally&rlz=1C5CHFA_enUS935US936&oq=COVID+cases+globally&aqs=chrome.0.0i433j0l7j0i390l2.3318j0j7&sourceid=chrome&ie=UTF-8
4 – The Wall Street Journal. https://www.wsj.com/articles/consumer-spending-personal-income-january-2021-11614293378