For all of 2023, economists talked about a looming recession that would hit the U.S. at some point during the year. As the Federal Reserve raised interest rates to curb high inflation, an economic downturn seemed imminent. However, as the year wound down, that recession never came—and to the great surprise of everyone, consumers continued to spend throughout the holiday shopping season.
This Yahoo Finance article from December 2023 summarizes things well, including how consumers were in a better financial position than economists assumed last year and how job growth in leisure/hospitality and healthcare/education in 2023 helped create a strong job market in 2023 and historically low unemployment (3.7%).
In short, forecasts about 2023 being the year of the recession were wrong.
National Association of Business Economists’ Prediction: Things Look Better Than Expected
This week, the National Association of Business Economists (NABE) released its Outlook Survey, which shares that in 2024:
- Gross domestic product will increase 2.2%
- The Federal Reserve will cut interest rates in the second quarter
- Unemployment will hit its peak of 4%
The NABE survey presents the consensus of 41 professional forecasters. It seems like cause for reasonable optimism, bolstered by slowing inflation, a strong stock market, and a decline in the Consumer Price Index, which measures the monthly change in prices paid by U.S. consumers for a basket of goods and services.
For Retailers, Planning Ahead and Monitoring Business Drivers is Critical
In a consumer-facing business, it’s challenging to make business decisions amid loud predictions about a recession. If there’s one lesson every retailer we work with here at SiteSeer can (and should) learn from the last four years, it is that customer behavior can change quickly, and businesses need to adapt just as quickly.
There’s another important lesson we try to impart upon our retail clients: all business decisions come with some amount of risk. You might open a store that you analyzed carefully before opening and find it underperforms your predictions due to factors you didn’t account for that affect your customer. You cannot eliminate risks, but you can minimize them by doing thorough, quality research.
Retail Success Requires Planning and Research
We’ve shared findings from a McKinsey & Company study published in 2020 about how retailers can build resilience ahead of a recession, and it’s great advice no matter what the market decides to do the rest of 2024. Take advantage of opportunities, assess your existing store base regularly, safeguard current sales, and find new customers.
The most successful retailers we’ve worked with throughout our many years in this industry seem to have many things in common:
- They confront tumultuous times not with fear, but a plan to succeed beyond the uncertain period.
- They never stop doing research.
- They do not rely on their guts to draw conclusions or make decisions. Rather, they inform their decisions with analysis and data—both their own company data and third-party data that is relevant to the types of insights they want to gather.
We know that it’s hard to operate with confidence when the news about the economy is gloomy, confusing, and later inaccurate (as in the 2023 forecasted recession that never happened). However, the best thing you can do as a retail business is high-quality research about your customers, competitors, markets, and more.
SiteSeer Professional is not just a site selection tool. It’s a market research platform that helps retailers and other chain businesses research the markets they currently serve, their current customers, their competitors, and future opportunities. SiteSeer can help you understand your success drivers and strengthen your business, whether you’re ready to add new locations now, or want to poise yourself to be ready to do so when the time is right.
Take Advantage of Opportunities
Be ready to take advantage of opportunities this year. Discover how SiteSeer can augment your decision making and how our professional services team can support you as well. Contact us for a demo of the SiteSeer platform and a discussion about your goals for this year and beyond. We’ll help you get there!
