Retailers Forum Oct. 2021 EMAG

Small Business Rising Wages Problems
STRONG consumer spending over the past year has been boosted by the government
stimulus programs but is going to rely heavier on the labor market and job creation as the
benefits of those efforts subside. Last month’s jobs reports was disappointing as many workers
aren’t returning to work. In the meantime the higher wages that employers have had to pay
as they struggle to fill job openings could very well lead to increased inflation in the coming
months.
Due to the backstops by the government consumer spending is currently far above prepandemic
levels with consumers having more money in their pockets to spend. But as the
economy moves forward towards the last quarter and federal aid starts tapering the shift will
move to the ability of the labor market to generate strength in wages and salaries to support
spending. Consumers remain in the mood to spend but the labor market and job creation will
play a vital role in their ability to do so.
WITH more job openings than people looking for work, wages and salaries rose 3.2 percent
year-over-year for the last 12 months. The bulk of the recent upturn in US inflation has been
driven mostly by supply chain slowdowns and low levels of inventory, but high labor costs are
often passed onto consumers and are considered the precursor of broader inflation.
ADDITIONALLY the spreading covid variants could also cause a modest disruption to retail
sales as well as negative effects on restaurants, travel and accommodations, possibly causing
a shift back to spending on retail goods after those service sectors saw gains this last quarter.
TikTok Starts Social Commerce
IT seems like it was only a few months ago that the government was warning against
TikTok and investigating their origins and motives and today, all of a sudden, no more news or
investigations of the company. Instead the social media platform appears to be flourishing and
adding new revenue streams by adding commerce to their site!
THE app has long featured influencers who discuss their favorite products from household
goods to makeup, clothing and more. The comment sections of these posts are often overflowing
with users asking for links to purchase but the app did not support hyperlinks in the comments.
The users had to search the Internet looking for the items they were interested in.
HOWEVER, with a new partnership, Shopify merchants can participate in a pilot program
that can add a shopping tab to their profiles and product links within TikTok postings. The feature
is expected to expand to all merchants by fall. This will allow TikTok to use social media to buy
and sell products, joining Facebook and Instagram in giving influencers and creators the ability
to make sales directly from the app.
FOR those of you with short memories...TikTok was under intensive scrutiny as the China
owned company was purported to have been harvesting user data and breaking privacy
laws, especially for minors. Former President Trump launched full throttle investigations which
seemed to be abruptly halted upon his exit and now the company is free to carry on with what
seems the US blessings. Strange? We think so!
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Page 14 OCTOBER 2021 | RETAILERS FORUM MAGAZINE