—Wary of the Retail Tidings

Dear Retail Tidings,

There is no question that internet sales have been increasing annually and will continue to do so. It is also true that for many retail products, the price on the internet dominates in-store sales, since few buyers are so naïve as to not check out the best internet price before purchasing goods in stores. Stores like Best Buy will actually do the price checking for those customers who forget their iPhones.

As to the impact of the economy, that is a tricky question that even economists find difficult to answer. Perhaps you heard the joke as to why it is desirable to employ a one-armed economist—to avoid the all too frequent response, "on the one hand." The impact of the complexity of our global economy, as well as the turmoil currently going on in the world, does prevent a definitive answer to your question.

But there is a third factor that is likely to be as or more important than the internet and state of the US economy, and that is the massive change taking place in the patterns or makeup of consumer expenditures. Recent years have seen a shift in preferences from the purchase of shopper goods to the purchase of experiences. This is particularly true for the Millennials, but it also holds true for all demographic cohorts, including the Boomers. Instead of buying the latest apparel fashion, there is an increasing tendency for consumers to spend those dollars on eating out, clubbing, spas, pet care and entertainment venues. Except for the latest electronic products like the Apple Watch, I don't see this trend changing in the foreseeable future.