Executive Briefings

Retailers Concerned About 'Experience, Not Things' Mantra

As Americans spend more money on doing things, not buying things, department stores are losing out.

A rebound in overall spending at retailers, which grew 0.6 percent in July from the previous month, has eluded department stores, where sales dropped 0.8 percent. Department stores made up one of just two categories tracked by the Commerce Department where spending declined, the latest in a choppy performance from them this year. Spending at electronics and appliance stores also fell 1.2 percent in July.

Data released by the Commerce Department shows that American consumers are putting what little extra money they do have to spend each month into eating out, upgrading their cars or fixing up their homes, as well as spending on sports gear, health and beauty.

Analysts say a wider shift is afoot in the mind of the American consumer, spurred by the popularity of a growing body of scientific studies that appear to show that experiences, not objects, bring the most happiness. The Internet is bursting with the “Buy Experiences, Not Things” type of stories that could give retailing executives nightmares.

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A rebound in overall spending at retailers, which grew 0.6 percent in July from the previous month, has eluded department stores, where sales dropped 0.8 percent. Department stores made up one of just two categories tracked by the Commerce Department where spending declined, the latest in a choppy performance from them this year. Spending at electronics and appliance stores also fell 1.2 percent in July.

Data released by the Commerce Department shows that American consumers are putting what little extra money they do have to spend each month into eating out, upgrading their cars or fixing up their homes, as well as spending on sports gear, health and beauty.

Analysts say a wider shift is afoot in the mind of the American consumer, spurred by the popularity of a growing body of scientific studies that appear to show that experiences, not objects, bring the most happiness. The Internet is bursting with the “Buy Experiences, Not Things” type of stories that could give retailing executives nightmares.

Read Full Article