Americans are pulling back on day-to-day spending and investing in the EXTRAordinary- a sign of widespread desire for escapism.
Last week, a collection of quarterly earnings reports from large retailers painted a pessimistic picture of consumer spending behavior - setting off alarms among certain investors and economists that a true recession might (finally) be underway.
Estee Lauder reported a weak fiscal quarter, but noted that Mac and The Ordinary – two of its more affordable brands – outperformed expectations.
But while consumers may be pinching pennies on day-to-day purchases, they certainly aren’t holding back on the big stuff.
Taylor Swift’s Eras Tour saw - according to TicketMaster - “historically unprecedented” demand this Spring. The average price of a resale ticket was $3,801; face value tickets averaged $253.
Beyonce’s Renaissance Tour has taken in $295.6 million in ticket sales alone. The Barbie Movie and Oppenheimer powered the July box office to $235 million.
Recent data from the World Travel & Tourism Council showed that family travel abroad increased 21% in 2022 compared to 2019.
The simple - perhaps simplistic - explanation here is that people are prioritizing experiences over material goods. But that narrative ignores the deeper drivers at play. People have money (Bank of America reported that deposits are still 33% higher than in late 2019), but they are feeling the weight of rising costs of living. They’re also feeling the emotional weight of a mental health crisis, global unrest, and an impending election - in a recent federal survey, 27% of US Adults reported symptoms of an anxiety disorder (up from 8% in 2019). Americans are cutting corners where they can. But they’re investing more into moments of escapism - whether that be a 3-hour Taylor Swift concert or a personalized drink at Starbucks (also up in sales last quarter). As budget allocations shift, there is opportunity for brands to provide and own those highly sought-after moments of release.