Opportunity exists for the floral industry to reach lower-income earners in 2019.
The floral industry is a consumer discretionary spending industry, which is affected by economic performance, interest rates, consumer confidence and spending, and changes in retail and production competition, consumer demographics and consumer trends. With the 2019 economic forecast in mind, how should you be adjusting your strategies?
Looking at key U.S. economic indicators such as gross domestic product, unemployment and inflation, the economic outlook for 2019 is healthy, though many analysts believe the U.S. economy has peaked and is now beginning its slow decline. Economists expect the U.S. economy to continue growing through 2019 with a less than 20 percent chance of a recession over the next 12 months.
The floral industry has been able to capitalize on the higher-end wage earners who experienced sharp increases in wage growth starting in 2010 since traditional floral customers who purchase products on a regular basis tend to have an above-average income. The declining unemployment rate, lower rates of “underemployment” and increases in wages are good sign for the floral industry as we move into 2019.
The economy is supporting your efforts
toward an everyday purchase strategy. Opportunity exists for the floral industry to reach lower-income earners in 2019.
This segment began experiencing an increase in wages in 2016. Despite an initial downtrend in 2018, nominal wage growth for this segment recently picked back up.
Increasing minimum wages also benefited lower income earners. Minimum wages increased nearly 5 percent in 2017, and the floral industry will be able to capture this segment with lower cost products at discount retailers.
2019 is predicted to be a good year for floral, and strategies should continue to be actively managed. As you move from a holiday and special occasion strategy to an everyday purchase strategy, the economy is supporting your efforts. You will have to keep an eye on inflation, which has ticked up with interest rates. While the U.S. political environment remains uncertain, it seems consumers consider this the new normal.