Be Smart About Changes
In Shopping Behavior
Adapting is key to survival, say industry observers.
By Christine Esposito
The good old days of “shop ‘til you drop” appear to be gone, and, dare we say it, maybe for good.
“Cutting back, trading down, shopping in less expensive stores, putting less on credit cards is now a way of life,” said Wendy Liebmann, chief executive of WSL Strategic Retail, on the release of firm’s new special report, How America Shops In Crisis. “As we look to 2009, it’s crystal clear that this is not a short-term change. The implications for U.S. retailing are significant, dramatic and will be long felt,” she added.
According to WSL, there has been a massive national reassessment of “shopping life” values, which cuts across all economic levels.
WSL says P&G’s marketing tie in with Ann Taylor Loft shows the Cincinnati consumer giant recognizes the changing consumer mindset.
“This readjustment has been going on since gas prices went over $2. For a majority of American shoppers, this has been going on for eight long years—when they started losing confidence in companies like Enron and WorldCom, and when the internet bubble burst. These events created fear, and now it is at the crescendo,” Ms. Corlett told HAPPI.
According to WSL, the change has created three “shopping life” trends—Just Say No, Do-It-Myself and Taking Pride in Crisis Management. Here’s a closer look at those trends:
Just Say No: The big, worrisome shift for retailers and manufacturers is that shoppers are learning to say “no”, as in “No, not today,” “No, I really don’t need that,” ”No, mommy can’t afford to buy you that,” and “No thank you, I’ll do it myself.” The longer the economic bad news lasts, the more familiar “no” will be to shoppers.
Do-It-Myself: Americans’ service economy of paying someone else to brew our coffee, cook our food, manicure our nails and cut the grass is no longer in the budget—but that doesn’t mean doing without. Consumers are cutting back and doing many of these things themselves.
Taking Pride in Crisis Management: There’s a new buzzword, “Ameri-can.” Shoppers are proud of their talent to face financial crisis and manage it.
According to WSL, the longer shoppers learn to say “no” the easier it is, and the longer it will take to return to the consumption of the early years of the millennium.
However, it’s not all doom and gloom. For starters, the change to “do-it-myself” will benefit some companies.
“Mass retail brands will benefit, and that is why, while this is a terrible economic time—a wallet pinching time for shoppers—it is a windfall for brands that help people do things for themselves,” said Ms. Corlett. “We spent decades becoming a service country, a service economy. People are going to buy their own polish remover and hair color.”
Ms. Corlett said some companies are already reacting well to the changing mindset of American consumers, including Procter & Gamble and Ann Taylor Loft. Last fall, the two teamed up to promote the fact that the retailer’s clothing could be washed rather than dry cleaned with in-store promotions featuring Downy Total Care (see HAPPI, Nov. 2008, marketing news).
Others include Wal-Mart, which this past holiday season bundled of items as holiday gifts (packaging a bike, helmet and other gear together), which Ms. Corlett said removed the psychological barrier of having to buy multiple items, and Staples’ Tech Trade-In promotion in which consumers who brought in old equipment were given $30 in Staples Rewards for a new purchase. By doing so, Staples helped consumers save money and easily recycle outdated or broken electronics.
“There has been an increase in awareness of wellness and taking care of the earth, but unfortunately those things cost money. Shoppers don’t have extra money for wellness or earth friendly. Smart companies will tap into that change.”
Adaptation is critical, according to Ms. Corlett. “Don’t continue to do what you have done. If you do that, it will be your undoing.”
More info: www.wslstrategicretail.com