Oct 04, 2013 Philip Burgess
Across the United States, the price of gas is on the decline. Data from AAA showed that gas prices dropped $0.19 in September, marking the largest decline since October 2012, according to the Los Angeles Times. More importantly, the source noted that average gas prices could decrease an additional $0.30 by Christmas time.
This is great news for the millions of Americans who use vehicles to commute to work each day, potentially saving them a significant amount at the pump.
However, the positive impacts are not only confined to consumers. The fact that Americans will be spending less on a product they purchase in large amounts could lead to more income being available to make other major purchases. With the holiday sales push on the horizon, retail outlets could see a spike in business as Americans off load some disposable income.
According to The Slant, the retreating prices should be enough to boost consumer confidence levels, which may indicate that large portions of the population are willing to spend more. Also, the potential development could be a good sign for short term lending outlets and other financial institutions. More consumer confidence and improving finances could increase the need for loans among consumers if they decide to make big item buys in the coming months.
So far, 2013 has been a year of growth for domestic automakers, which has in turn increased business for auto lending companies. In addition, borrowing for home purchases has been solid due to the recovering economy.
Take advantage of the boom
Retail outlets and lending groups need to be ready to use the spike in consumer confidence to their advantage. With so many consumers likely ready to increase their purchasing and borrowing, the coming months may be a great opportunity for businesses to enhance their loyal customer base.
Innovative mobile payment platforms and customized loan products can be great ways to attract more consumers. By maintaining the status quo when it comes to operations, lenders and retailers will not optimize the amount of new consumers they can bring through their doors. Now is the time to get aggressive with product promotion and development, as it could provide long-term benefits.
However, lending and retail leaders should pay close attention to economic trends in the coming months. If gas prices do not retreat as much as expected or other developments shift consumer confidence, businesses will need to adapt accordingly.