business news in context, analysis with attitude

by Michael Sansolo

If you are laboring under the illusion that there isn’t enough to worry about, I have something else for you. (Don’t shoot the messenger.) It concerns an educated look into the future buying power of the American consumer, and I have one suggestion for you before reading on.

You may want to sit down.

A survey by found that 42 percent of Americans have less than $10,000 saved for retirement. About 14 percent have nothing saved at all.

Those are horrible statistics.

Now, it’s possible there could be all kinds of problems with that survey. For instance, perhaps it oversampled young people who are just getting started in the workforce and haven’t begun to think about a far-off retirement. That might explain the stunningly poor retirement planning and help the numbers look better.

It’s possible. But unfortunately, that’s not the case.

As the Motley Fool reported this past January, 42 percent of boomers (and 41 percent of Gen Xers) have only just begun saving for retirement, which as any financial planner would say, is way too late.

Clearly the numbers from GoBankingRates are on the money, even if the consumers aren’t.

Essentially everyone currently in their 40s, 50s, 60s and 70s needs go on an incredible saving spree (if circumstances allow it) or prepare for either working into their 80s or watching every last penny for the rest of their lives.

The reality is that we are going to have millions of consumers facing a dim financial future, which means that pressure on economizing in every way is going to take hold at a furious pace sooner or later. Suddenly it might make sense why Aldi and Dollar General are opening stores at a breakneck pace and why Lidl is trying so hard to get its footing in the US.

We are looking at an explosion in the numbers of people making price their chief priority when it comes to shopping.

Here’s the good news for some of our readers: this story isn’t about Amazon.

The bad news is that it actually is and it doesn’t matter anyway.

Shoppers always are driven by different needs and even different need states. There are times and even specific products for which price is the main determinant. At other times, indulgence or experience wins the day. The challenge for any company has always been to carve out a large enough niche to ensure success and to understand the almost illogical mix of moods that drive spending behavior.

That might explain the most recent moves by Walmart (partnering with Lord & Taylor!) and Kroger (an alliance with robotics/logistics/warehouse company Ocado) in a larger sense. Smart companies are playing chess and making moves for the long-term battle ahead when the challenge will come in winning as much market share as possible from the 60 percent of the population with sufficient savings for their future or getting into the trenches to go after the other 40.

Don’t forget, Amazon is out there looking for its share as well. (And if you don’t remember, MNB will be here to remind you.)

The question that retailers have to ask themselves is this: What are you doing to get ready for these changing circumstances?

Unlike that 40 percent of the population, you had better get planning.

Michael Sansolo can be reached via email at . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.
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