Numerator CEO on Ecommerce, Holiday Shopping Trends & Customers Using AI Tools

Marlee Caden (0:01)

Welcome to Market Matters, I'm Marlee Caden. Each week we're stripping away the noise to focus on the big picture economic themes driving the market. Today, we are cracking open the actual receipt verified spending data to make sense of a massive disconnect at the heart of the consumer economy. Headlines from Wall Street to Main Street are telling two completely different stories. On one hand, forecasts expect another trillion dollar holiday season with nominal retail growth of up to five and a half percent. On the other, consumer confidence has plunged near historic lows as anxiety over prices and jobs continue to mount.

Are consumers actually resilient or are higher prices simply doing the work as cumulative inflation eats away at physical unit volumes?

Eric Belcher (0:44)

I think it's most interesting to watch some of the higher income groups who in the past have stayed loyal to some of their brands and their whole foods, shopping experiences. Their changing behaviors I think do tell us something about what's going to happen going forward.

Marlee Caden (1:01)

Joining us today is Eric Belcher, CEO of Numerator. Numerator tracks proprietary zero-party purchase data from more than one million households across North America, publishing real-time consumer insights within 72 hours of transaction. Eric straddles the front lines of shopper behavior, retail data and empowering AI agents to act on live consumer intelligence. Our deep dive into the consumer starts right now.

Eric, thank you so much for joining us. And in person, we love doing the podcast in person. Let's start right at the intersection of where you sit. This sort of conflicting consumer narrative we have right now. We have consumers and people saying that they just feel bad and sentiment is indicating people don't feel good. Michigan, the consumer confidence is poor, but we're still seeing resilient spending data. So from where you sit at Numerator, what signals should brands and investors actually be trusting here when we have competing narratives when it comes to the consumer right now?

Eric Belcher (2:04)

Well, you trust the behavior. And so the sentiment studies, of which we have one that confirms what Michigan and others say, do show that sentiment is down, but we see spend continuing.

The important thing is to look at what people are buying in the way of their means. So breaking down demographics, looking at lower income households, medium and high, and with inflation and with pressures, the inflation is actually hurting lower income groups more. They have less ability to trade down if they're already buying private label, and they have less ability to maybe buy in bulk. And so that group is now becoming far more deal conscious. We've got Amazon Prime coming up next week. It's getting earlier in the fall every year for holiday season. And so we expect a lot more energy being put into discounted items next week and through the whole holiday season. And savings are starting to become a little bit depleted. Americans still have a nice cushion of savings, but far less so than last year. So it's going to get interesting.

Marlee Caden (3:16)

So when we have all of that data behind us, we know who it's impacting most. We know that people are feeling the pinch. We know that savings are getting depleted. Is the consumer actually resilient or are higher prices doing some of the heavy lifting here?

Eric Belcher (3:31)

Well, there is an element of that in the higher income households.

However, the inflation impact on the lower income groups and forcing those cohorts to move toward more deal-advantaged purchases, and by the way, taking advantage of a lot of the new AI tools that are coming out, means that the volume is still there, the pricing is starting to be impacted, and we saw a dip in inflation actually of fast moving consumer goods, grocery, most recently. However, we're still up 2.2% over last year, and it's impacting the lower income groups more.

Marlee Caden (4:13)

So we're seeing that it's affecting the lower end of our K-shaped economy the most, but we're still getting all of these reports that seem to be in agreement that holiday spend is going to be higher this year. How are you reconciling that?

Eric Belcher (4:27)

Well, first of all, we just don't know.

And so that decrease in consumer confidence, the energy being put toward a longer holiday season with it really kicking off next Monday, actually Walmart jumped a day on Amazon, which starts on Tuesday next week. We will be extending the holiday season and therefore more items being purchased at discount is likely to be what we'll see. But given that discounting, I wouldn't jump to the conclusion that we're actually going to see spending and total increase.