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Sales at U.S. retailers and restaurants increased modestly in September as resilient consumers moderated their spending after splurging over the summer. Sales rose 0.2% in September from the previous month, the Commerce Department said Tuesday, in a report delayed more than a month because of the government shutdown. Sales jumped 0.6% in July and August and 1% in June. Numerous reports on inflation, employment, spending, and growth remain delayed and the government wont likely be caught up until late December. The retail sales figures, which aren’t adjusted for inflation, suggest that Americans pulled back on spending in September as many households struggled with high prices for groceries, rent, and many imported goods hit by tariffs. The retail sales report covers about one-third of consumer spending, with the rest going to services such as travel, haircuts, and entertainment. Still, higher spending should lift the economys growth to a solid 3% annual rate in the July-September quarter, economists forecast, after a sluggish 1.6% expansion in the first half of the year. Much of the spending, however, was driven by rising prices at gas stations and grocery stores. Still, sales rose 0.7% in September at restaurants and bars, a healthy gain in discretionary spending. Sales at clothing, electronics, and sporting goods stores fell. Consumer spending could slow in the final three months of the year, economists warned. The government shutdown, weak hiring, and elevated inflation will likely cause more Americans to cut back. The moribund labor market and ongoing drag on real incomes from tariff-induced price increases suggest that this slowdown is likely to be maintained, Oliver Allen, an economist at Panthenon Macroeconomics, a consulting firm, said. Also on Tuesday, payroll processor ADP released its weekly measure of hiring, which found that companies cut an average of 13,500 jobs a week in the four weeks ending Nov. 8. The report is a sign hiring may have slowed since September, when the government said a solid 119,000 jobs were added. The disparity found in economic data shows how the economy remains in an uncertain state despite the solid growth in the third quarter. Hiring has generally been weak and the unemployment rate has ticked higher, which could drag down consumer spending and the broader economy if it worsens. Unemployment rose to 4.4% in September, the highest in nearly four years, from 4.3%, according to the delayed monthly jobs report released last week. Higher-income Americans are driving much of the gains, according to data from Bank of America and reports from retailers such as Walmart, as lower-income shoppers seek bargains and are more likely to spend more on necessities. Still, some retailers issued positive reports Tuesday, including electronics chair Best Buy and Dick’s Sporting Goods. Best Buy lifted its sales and profit forecasts for the year. Tuesdays report comes before the crucial winter holiday season kicks off this weekend, when retailers earn as much as a fifth of their revenues. The National Retail Federation and other forecasters expect modest sales gains this year, compared with last years holiday, with the NRF projecting that sales will top $1 trillion for the first time. Separate figures from the Labor Department suggest that inflation remains elevated but isn’t accelerating, which could make it more likely that a closely-divided Federal Reserve cuts rates next month. Wholesale prices rose 0.3% in September from August, the Labor Department said Tuesday, and 2.7% compared with a year ago. The monthly gain in the producer price index was pushed higher by a sharp increase in gasoline costs. The yearly figure was unchanged from the previous month. Core prices, which exclude the volatile food and energy prices, rose just 0.1% in September and 2.6% from a year earlier. Those figures are less than expected and suggest inflation pressures are cooling, economists said. The retail sales figures land as many economic data are coming in mixed. Wage growth has slowed this year and is just modestly above inflation, a trend that is likely driving Americans concerns around affordability. Wages, on average, rose 3.8% in September from a year ago, the government said last week. That is only modestly above Septembers annual inflation rate of 3%. But for many Americans, particularly those earning lower incomes or for older workers, wages are rising more slowly and are clearly trailing inflation. The Bank of America Institute estimates that for the poorest one-third of households, pay grew just 1% in October from a year earlier, while the highest one-third saw their wages rise 3.7%. The gap between higher- and lower-income households matches an August figure as the widest in nearly a decade, the bank said. Bank of America uses anonymous data from its customers to calculate the figures. And a separate report from JPMorganChase Institute showed that incomes for a typical household have retreated to levels last seen in the early 2010s, after the harsh 2008-2009 recession. Households are going into the end of the year with weak income growth and bank balances that remain flat, after adjusting for inflation, the report said. Christopher Rugaber, AP economics writer AP Retail Writer Anne DInnocenzio contributed to this report.
Category:
E-Commerce
If you ask New Yorkers on the street what they think about the giant, controversial print ad campaign in the NYC subway system, their initial response might be, Which one? In the past two months alone, not one, but two ad campaigns fitting that description have appeared on the subway. The first debuted in late September, when Friend, an AI company billed as a portable companion, ran a $1 million print campaign featuring a variety of servile messages like, Ill never leave dirty dishes in the sink. The campaign received massive criticismto the point that the MTA was forced to continuously remove Friends vandalized ads. In an interview with Fast Company, Friend CEO Avi Schiffmann said he expected that would happen, and, in fact, he designed the ads with white space to invite graffiti. Now, another controversial print ad campaign has joined the fray. The new ads are paid for by Nucleus Genomics, a genetic health company specializing in genetic testing, IVF services, and embryo screening. The companys ads include phrases like, Height is 80% genetic, IQ is 50% genetic, Have your best baby, and These babies have great genes. In emails to Fast Company, Nucleus said that its new campaign was inspired by yet another contentious ad from this year: Sydney Sweeneys recent American Eagle partnership, which sparked backlash for what many people believed was a casual promotion of eugenics. Shock value marketing is as old as advertising itself. But Friend and Nucleuss recent campaigns represent a novel kind of rage bait marketing that is primed for the current moment of political and technological divide. This new era of attention-seeking provocation, incubated on social media with companies like Cluely, has now made its way into the physical world where brands are looking to double down on turning backlash into opportunity. We spoke to leading experts about the rise of rage bait marketing and where it goes from here. Hear from: An NYU Stern School of Business professor on why the new crop of tech startups is perfectly primed for rage baiting. The head of strategy at The Martin Agency on the advantage provocative marketing campaigns give young companiesand what it might cost them. The cofounder of Joan Creative on what comes next after this initial wave of rage bait campaigns. [Photo: Nucleus Genomics] What is Nucleus Genomics trying to do, exactly? Nucleus was launched in 2021 by the now-25-year-old Kian Sadeghi. According to Sadeghi, the company is dedicated to helping parents have healthier children through what he calls genetic optimization. In practice, Nucleus provides a few different services. Its first offering was a proprietary DNA testing kit that uses cheek swabs to, per its website, uncover your genetic risk for 2000+ conditions. This summer, Nucleus partnered with a company called Genomic Prediction to begin offering an embryo screening service that allows patients to look at their embryos statistically predicted traitsincluding the potential likelihood of developing conditions like autism or Alzheimer’s, alongside eye color, height, hair color, and IQ. Later, in August, the company bundled that service with a new full-service IVF program called IVF+. [Images: Nucleus Genomics] Nucleus isnt the only company thats started offering more advanced embryo screening services in recent years. Several others, like Orchid and Genomic Prediction, have emerged within the last decade. All of these companies are facing intense debate from the scientific community over the legitimacy of their prediction models, the morality of screening for certain traits, and the long-term repercussions of a future in which embryo optimization becomes commonplace. This discussion around the ethics of Nucleus core premise is actually what sets it up for a successful rage bait campaign, according to Joshua Lewis, an assistant professor of marketing at NYUs Stern School of Business. For companies like Friend and Nucleus, he says, some level of polarization is intrinsic to the product itself. AI companions, for example, will inevitably have detractors who find the premise objectionable, as well as champions who believe in it wholeheartedly; the same goes for embryo screening companies. By employing rage bait tactics, Lewis says, these companies can start broader cultural dialogues and build affinity with their target audiences without losing too many potential customers. To polarize intentionally can make some sense, because ultimately what you want in marketing is to have your target segments be loyal. Polarizing can be quite good, as long as your non-target segments are experiencing the rage, and your target segments are appreciating what the brand is doing, Lewis says. Regardless of Nucleus actual intentions, he adds, it doesn’t cost them much to upset people who weren’t going to be using their products anyway. For companies in nascent fields, theres an added advantage to aiming for shock value in campaigns, says Elizabeth Paul, chief strategy officer at the advertising company The Martin Agency. If you’re in the business of genetically engineered babies or AI companions, controversy is baked into the product, Paul says. It seems to me like Nucleus Genomics and Friend AI decided to lean into that reality and make their baklash bug a feature. If anyone’s wondering, Why would you do that? I think their tension-filled campaigns better amplified mass awareness for what are very nascent categories. [Images: American Eagle] Inside Nucleus latest campaign In an email to Fast Company, Nucleus PR firm described the subway campaignwhich includes a full takeover of the Broadway Lafayette station, more than 1,000 subway car ads, and another 1,000 street adsas the first mainstream campaign to openly champion advanced embryo selection for specific traits. Several of the ads call out physical attributes and IQ, and most direct viewers to Nucleus landing page, pickyourbaby.com. The Nucleus team says it was inspired by the controversial Good Jeans campaign featuring Sydney Sweeney. In that campaign, a denim-clad Sweeney narrates, Genes are passed down from parents to offspring, often determining traits like hair color, personality, and even eye color. My jeans are blue. A male voice-over adds, Sydney Sweeney has great jeans. It almost immediately entered the sphere of marketing infamy for (likely inadvertently) promoting genetic ideals, given Sweeneys blue eyes, blond hair, and white skin. When Sadeghi saw the reaction to the Sweeney ad, he noticed a lot of what he calls DNA dissonanceor what he considers a widespread misunderstanding of what DNA actually is, why genetics matter, and how far along genetic testing has come in the scientific community. He claims that Nucleuss products are just another tool parents are going to use to help give their child the best start in life, and that the ads can help parents better understand how to achieve that advantage. While Sadeghi benignly frames the campaign as an educational tool, it doesnt exactly line up with the actual ads. Much of the copy feels designed to generate a reactiongood or badto what Sadeghi refers to as the “sci-fi narrative” surrounding embryo optimization. The internet reacts On Threads, one post of an ad reads, Every single day theres a new dystopian subway ad. On TikTok, a video with nearly 200,000 views critiquing the campaign is captioned, We need to have some very serious conversations about eugenics cuz we’re losing ground here. Another TikTok with more than 2.4 million views shows a camera panning around the Broadway Lafayette station with the overlaid text, Uhhh sorry but what in the eugenics is this? More than 8,000 other users have sounded off about the campaign in the comments. On the surface, rage baiting might seem counterproductivewho wants people to hate their product? But for companies like Friend and Nucleus, the numbers may speak for themselves. Nucleus says that since the campaign debuted, the company has seen an over 1,700% increase in sales, primarily driven by sign-ups to its IVF+ services. Across organic responses, its achieved almost five million impressions. Similarly, Friends earlier campaign sparked dozens of stories in the media and commentary across social media, causing Schiffman to deem it an overwhelming success. The vast majority of marketers are not going to want to test the adage all press is good press by courting controversy, Paul says. Still, most can probably understand the desire to break through the noise in an environment where consumers are bombarded with content on a daily basis. On social media, one algorithmically-backed way to achieve those ends is by eliciting fear or anger. The reality is, according to Kantar, 85% of ads right now fail to meet the minimum threshold of attention for comprehension, Paul says. In other words, they are so bland and boring and invisible, people did not pay enough attention to even process what they said. In an environment like that, brand invisibility is a bigger threat than brand rejection. View on Threads Companies are choosing to say the quiet part out loud Risk and provocation in marketing is a tale as old as time. Paul points out that such tactics trace back as far as P.T. Barnums shock-value stunts for his circus events. But Jaime Robinson, cofounder of the agency Joan Creative, believes there is something entirely unique about Friend and Nucleus recent campaigns: the willingness to openly address, and even emphasizeintrinsically controversial elements of their products. Robinson recalls a 1974 ad in which a brand called Beautymist featured football player Joe Namath pictured with his legs smoothed by a pair of nylons. Lewis remembers a 2018 ad featuring Colin Kaepernick after he refused to take a knee during the National Anthem. Each of these examples, they told me in separate interviews, were made with the knowledge that there would be some backlash from the public. The difference with Friend AI and Nucleus, Robinson explains, is that pantyhose and sneakers are not inherently controversial, while AI companions and embryo screening areand instead of hiding the elements of these products that consumers are most wary of, both companies are bringing them to the fore. [Nucleus] product is something where you can not just look out for potential diseases your embryos might have, but also pick out features like eye color and hair color. Theyve made a really provocative choice in their product and their use-case, Robinson says. Last year, she adds, a company like Nucleus might have shied away from talking about those features, and instead emphasized the health aspects of the marketing. Now, theyre putting it front-and-center. It’s about saying things that go against some of the most deeply held convictions of most of us and the things that we find most uncomfortable in the world: being replaced by robots; having babies being picked by their physical features and IQ, Robinson says. These are the things that we find the most abhorrent, just as human beings. [Screenshots: Twitter/X] Robinson believes that part of this marketing strategy might be attributable to a political climate in which authority figures are constantly testing the boundaries of what is acceptable to say. Lewis noted that, in a sense, President Trump often uses similar rage bait techniques in order to communicate his own personal branding. Now, we might be seeing that political tenor bleed into the marketing sphere. Both Robinson and Paul predict that, in the wake of Friend and Nucleus campaigns, were likely to see an uptick in rage bait marketing in the months to come. What’s interesting now is how companies are choosing to say the quiet part out loud, and doing it fearlessly, Robinson says. It’s almost as if they’ve thrown away the dog whistle and traded it for a foghorn.
Category:
E-Commerce
U.S. consumers were much less confident in the economy in November in the aftermath of the government shutdown, weak hiring, and stubborn inflation. The Conference Board said Tuesday that its consumer confidence index dropped to 88.7 in November, from an upwardly revised October reading of 95.5, the lowest reading since April, when President Donald Trump announced sweeping tariffs that caused the stock market to plunge. The figures suggest that Americans are increasingly wary of high costs and sluggish job gains, with perceptions of the labor market worsening, the survey found. Declining confidence could pose political problems for Trump and Republicans in Congress, as the dimmer views of the economy were seen among all political affiliations and were particularly sharp among independents, the Conference Board said. Earlier Tuesday, a government report showed that retail sales slowed in September after healthy readings over the summer. While economists forecast healthy growth for the July-September quarter, many expect a much weaker showing in the final three months of the year, largely because of the shutdown. Less-confident consumers may spend less, though the connection isn’t always clear. In recent years, consumer spending has held up even when the available data suggests they’ve grown more anxious. We do not think that consumer spending is about to hit a cliff, as spending has decoupled from confidence, but risks to the downside are increasing, Thomas Simons, chief U.S. economist at Jefferies, an investment bank, said. The proportion of consumers who said jobs are plentiful dropped to 27.6% in November, down from 28.6% in the previous month. It is down sharply from 37% in December. At the same time, 17.9% said jobs are hard to get,” slightly below the 18.3% who said so in October. That figure is up from 15.2% in September. The figures on job availability are seen by economists as reliable predictors of hiring and the unemployment rate. Americans continue to worry about elevated costs, fueling the affordability concerns that were a key issue in elections earlier this month. Consumers write-in responses pertaining to factors affecting the economy continued to be led by references to prices and inflation, tariffs and trade, and politics, with increased mentions of the federal government shutdown,” said Dana Peterson, chief economist at the Conference Board. The shutdown ended November 12. The economy likely grew at a solid annual rate of about 3% in the July-September quarter, economists estimate. But growth is likely to slow in the final three months of the year, largely because of the shutdown, which cut off pay for federal workers, disrupted contracts, and interrupted air travel. The Conference Board survey ran through November 18, about five days after the shutdown ended. By Christopher Rugaber, AP economics writer
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E-Commerce
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