Consumer confidence is down but, contrarily, spending in some key areas
is up. According to the Michigan Index, U.S. consumer confidence for
August slid from a six-year high. Additionally, The Bloomberg Consumer
Comfort Index plummeted four straight weeks to its lowest level since
"The economy, employment, wages, and retail sales continue to stagger
along. Retailers and consumers are resilient but not overly optimistic
about the broader economy," said NRF President Matthew Shay, but
"positive retail sales growth continues month-after-month."
This is confirmed by August Nonstore retailers' sales figures, the
measure of money spent on internet shopping, showing an increase of 0.5%
seasonally-adjusted month-to-month and an increase of 8.8% unadjusted
This is proof that low consumer confidence doesn't equate to weak
consumer spending. Michael Zimmerman, CEO of Prentice Capital Management
feels today's consumer is stretched thin. The job market and wages are
stagnant, interest rates and prices edging higher, record numbers of
Americans on food stamps and the crunch of higher taxes - all factors
that Zimmerman believes mean online shopping growth will accelerate as
consumers turn to their mobile devices seeking ways to maintain
lifestyle choices at lower cost.
August retail sales showed that total retail sales increased 0.2%
adjusted month-to-month and increased 4.7% adjusted year-over-year.
The data suggests that consumers remain cautious with their pocketbooks
and purchases. This month's weaker overall retail sales will continue to
put pressure on policymakers, who are dealing with tapering, and
retailers, who will need to focus on price and better engagement
strategies to entice consumer spending.
Zimmerman has recently commented that US consumer retail growth will
likely continue to perform well in the year ahead. His pattern of
investing as revealed through Prentice Capital's disclosures has shown
the Zimmerman hedge fund favors stocks with strong brands and well
conceived mobile and online commerce strategies.
"Given the evidence, we seem to be entering the start of a persistent
mobile age," Scott Galloway, a professor of marketing at NYU Stern and
creator of L2, noted in a statement. "Brands ignore this shift at their
Companies like Amazon and Starbucks have actively sought ways to
communicate and connect more effectively with customers, creating mobile
apps that provide immediate discounts and useful features to consumers.
Starbucks allows customers to pay directly from their Smartphone in
store, while Amazon gives consumers the ability to scan barcodes at
bricks and mortar retailers, quickly displaying online discounts for the
same and similar products.
As consumers evolve companies must follow suit, engaging their customer
base with new and innovative methods. An estimated 33% of Smartphone
users check for product reviews, coupons and discounts prior to making a
purchase, often while instore - a trend fuelled by Social media.
Intelligent use of Social media and Smartphone data allows forward
thinking companies to analyze customer behavior and quickly address
needs and concerns, adapting as necessary.
2013 could become a breakthrough year for mobile shopping, especially if
smartphone prices continue to plummet and strong consumer uptake of the
About Prentice Capital Management
Prentice Capital Management LP
focuses on private and public equity investments in the U.S. consumer
and retail sectors.
HedgeUp online publication focuses on middle market
hedge funds and the managers behind them worldwide.
Sam Taner, +1 646-583-2187