Consumers shop differently post recessionWednesday, 10 March 2010
Foremost, shoppers are selective and purposeful in their spending, as opposed to impulse buying. Conspicuous consumption will give way to more conscious or practical consumerism.
"The recession has tempered the rampant and excessive consumption, giving way to more mindful choices as shoppers increasingly seek out online and mobile coupons, comparison shopping sites, and loyalty and rewards programs," said Lisa Feigen Dugal, PricewaterhouseCoopers U.S. retail and consumer practice leader. "As consumers become more invested with using these tools in their shopping experience, retailers will need to adapt their strategies to appeal to this new generation of consumers."
According to the report, retailers need to make promotion and savings-related information more easily accessible across all shopper touch points. Furthermore, the explosion of online resources and new mobile phone shopping apps has made it easier than ever for consumers to find a specific item. This makes it imperative for retailers and manufacturers to optimize their search engine and paid search vehicle activities.
In assessing the new shopping environment, the report emphasizes that although shoppers will retain some of their recession-induced behaviors, the post-recession shopper will be characterized as purposeful, rather than panicked. Today's consumer will practice a more reasoned and rational trading down with deal-seeking behaviors like coupons and comparison shopping remaining post-recession.
As shoppers' "wants" are steadily reintroduced into the equation, trading-down behavior related to the choice of retailer, product, or brand will lose some traction in the recovery. However, private label brands will remain a significant factor due to their increasingly higher quality and low cost since retailers don't have to advertise or promote them to the same degree as national brands.
Research findings included in The New Consumer Behavior Paradigm indicate that one-fifth of consumers will continue to forgo buying items that seem too expensive, resulting in a contraction for the luxury and gourmet foods markets. The emergence of a more thoughtful approach to spending on luxury and non-discretionary goods means shoppers will place a premium on goods that have qualities of timeliness, usefulness, and versatility.
"Although we're starting to see signs of shoppers getting tired of trading down, they remain cognizant of today's economic realities and need to balance that with personal desires to reward themselves," said Mary Brett Whitfield, senior vice president at Kantar Retail. "Retailers and suppliers can take advantage of this "frugal fatigue" and offer affordable do-it-yourself alternatives to pricier products.
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