Although consumer confidence has been falling steadily for the past 12 months, spending has not seemed to slow. If our nation is headed for a recession, someone forgot to tell consumers.
Household spending overall is much higher than it was before the pandemic. Some of that is fueled by households that continue to use excess savings amassed during the COVID shutdowns.
Consumers tell pollsters that they are miserable with inflation at a 40-year high, supply-chain shortages and per capita income that often hasn’t kept pace. The high price of gasoline and diesel has raised the price of all products and services across the board.
And some economists say that predicting a recession may actually end up triggering a recession. If Americans continue to feel gloomy about the economy, they may pull back on spending, leading to a self-fulfilling recessionary prophecy.
Feelings of vulnerability can be impacted by everything from political leanings to current economic and financial situations. But no matter the reason for falling consumer confidence, a general malaise seems to have struck the American consumer.
Consumer confidence, as measured by the University of Michigan, fell to its lowest level in a decade in May with 80% of Americans saying that they believe the U.S. will experience a recession this year.
Inflation affects every consumer when they go to the store. Before purchasing a major appliance, often consumers are faced with making a choice, such as switching to a less expensive alternative or cutting back in other areas of their budget.
When prices rise, consumers adjust how they shop and rebalance their household budget, according to a National Retail Federation’s study.
When consumers do decide to make a major purchase, they want to protect it so that it will last as long as possible.
According to Consumer Reports, more than 40% of the refrigerators purchased between 2010 and 2020 developed problems or breaks within the first 5 years. Although most common brands will last longer than that, few are maintenance free. Most will require repairs or new parts during their lifetime.
Centricity’s extended service contracts provide a layer of protection for consumers who are concerned about unbudgeted repairs. Buying appliances and electronics without product protection is always risky for customers who use and depend on those purchases to work.
Most consumers can’t be without a refrigerator or washing machine for any extended period of time, but they also may not be able to afford to pay for a new one right away. Products fail at the most inopportune times.
Extended service contracts can reduce the stress and inconvenience of trying to find a reputable repair service on your own. Purchasing Centricity product protection can mitigate all of the issues and headaches consumers might experience should a product need repairs or replacement.
Customers shouldn’t have to struggle with getting repairs when a product breaks. And a retailer’s reputation for quality hangs in the balance during these stressful times.
Centricity partners with retailers and manufacturers to provide customized product protection solutions that drive revenue and result in loyal, happy customers. If you want to learn more about product protection plans and customized implementation and training for your team, contact us today.