03.31.10
The New American Shopper
Shopper panic may be over, but there has been a shift in America’s attitude aboutit, according to executives who monitor the retail landscape and shopping behavior.
Frugal behavior is now considered trendy by many shoppers and will continue for years to come, says some market observers. |
“While the recession is ending and shopper panic is over, shopping apathy is now a way of life,” noted Candace Corlett, president of WSL Strategic Retail. “In spite of that, there is opportunity to be had if companies understand the new shopper rules and the white spaces emerging as a result of all this change.”
“Companies need to recognize that these shopper truths will remain for the foreseeable future, and begin to build strategies to address them,” added Liebmann.“Clearly, smart shoppers need to be convinced why they should spend today, what makes a brand or a store worth it. Do that, and there’s a chance they will.”
According to a Booz & Company survey, the “new frugality” is now becoming entrenched consumer behavior that is reshaping consumption patterns in ways that will persist even as the economy rebounds.
For example, in the next 12 months just 9% of consumers intend to spend at pre-recession levels on household products and 11% on health and beauty products, according to Booz & Company data. Moreover, nearly two-thirds (64%) of consumers say they’ll shop at a different store with lower prices even if it’s less convenient for them.
“Frugal behavior is now considered trendy by many shoppers, and will continue for years to come,” said Matt Egol, a partner with Booz & Company.“In this changed environment, marketers need to develop deeper insights into shopper attitudes and behaviors in order to better align their product, pricing, and marketing communications strategies.”
In the Booz & Company study, 65% said they now consider saving to be more important than spending, and that they frequently use coupons. Fifty-five percent said they would rather get the best price than the best brand. Additionally, 64% of consumers say they’ll shop at a different store with lower prices even if it’s less convenient for them.
Booz & Company identified six distinct, new consumer segments that can help interpret how customers shop in terms of brand loyalty, retail format loyalty and online behaviors. These segments range from Shopper 2.0—young consumers who tend to buy online, regardless of product category, who are price sensitive with few brand or store format loyalties— to Loyalists—largely male, who are loyal to both brands and the stores where they shop, but are also avid users of the internet for research and buying.
“This more cautious consumer approach to spending began even before the recession came into full swing but has since picked up speed,” noted Booz & Company partner Andrew Clyde. “As manufacturers lured consumers with new promotions, consumers traded down and liked the experience. As the economy recovers, marketers need to better target their strategies to preserve the value of existing brands, and avoid destroying value through too blunt a competitive response across segments.”
More info: www.WSLStrategicRetail.com and strategyand.pwc.com
Big Brands Clean Up in Cleaning Category
When it comes to cleaning, consumers tend to stick with brands they know, according to findings of a consumer survey conducted by Market Force Information, a Boulder, CO-based provider of customer intelligence solutions.
Market Force’s study—which looked at several categories including cleaning products, beverages, snacks, coffees/teas and health/beauty products—found that consumers were slightly less likely to try a new cleaning product than snacks, coffee or beverages.
In the study, 29% of consumers reported that they bought a new brand of cleaner in the past 30 days. When they did try a new cleaning product, long-standing brands won out; Reckitt Benckiser’s Lysol was mentioned most frequently, followed closely by Procter & Gamble’s Swiffer and Clorox, with 29, 28 and 27 mentions, respectively.
The findings stem from a new brand trial survey conducted last month among Market Forces’ network of independent mystery shoppers and merchandisers. For the survey, 6000 consumers responded to a series of questions designed to shed light on which brands drove the most new product trials and why. Respondents ranged in age from 19–72 years old and reflected a broad spectrum of income levels, with approximately half reporting incomes of more than $50,000 a year. Approximately 75% were women. Half had children at home.
Market Force noted that advertising played a stronger role in driving new cleaning product trials than it did in the other categories surveyed, although it was mentioned explicitly in just 11% of consumer responses in the cleaning products category. While advertising was not reported as the primary reason for new product trials, it clearly helps build brand awareness, making consumers more likely to try a new offering from a familiar brand, according to the company.
More info: www.marketforce.com
Natural Market Thrives in 2009
The natural products market has managed to thrive during the worst recession in decades. According to a new study by Kline &Company, the segment even managed to post double-digit gains in 2009. Consumer awareness, better raw material supplies and wider availability of more affordable products, according to Kline, have spurred growth.
With more than a 15% CAGR over the last five years, the naturals trend seems to have solidified its position as more than just a passing fad. Moreover, the natural movement is a global exercise, with gains measured in the U.S., Europe, Asia and Brazil.
With overall growth in the naturals industry expected to average just over 12% through 2014, the trend will no doubt spark even more product innovation as marketers reformulate products to capitalize on consumers.
Most critical for marketers, however, is developing a thorough understanding of the nuances of each individual market. In Asia, for example, the long-standing tradition of Ayurvedic and herbal remedies makes the naturals concept more familiar, but, as it turns out, most products available here are not all that natural after all. In the U.S., consumer demand for naturals is growing, but so is the skepticism that should incite marketers to develop truly natural products that deliver more than marketing hype.
Looking ahead, Kline & Company analysts predict that the industry is moving toward a critical mass of acceptance and demand during the next five years.
More info: www.klinegroup.com
Professional Cleaners Are Doing More with Less
According to a survey conducted by Procter & Gamble Professional, 85% of cleaning professionals have adopted a “doing more with less” approach in response to current economic conditions.
A study found that 85% of cleaning professionals have adopted a “doing more with less” approach in the current economy. |
The survey also found that in spite of constrained resources, cleaning professionals primarily judge the value of a product based on its quality and effectiveness (56%) and versatility of use (36%) rather than its price point More than 60% of those surveyed who would be willing to spend more on a product would do so if it enabled their employees to work faster by getting the job done the first time. Additionally, 43% would spend more if the purchased product could replace multiple products they currently use.
More info: www.pgprof.com