Shoppers will be more selective in recovery, claims new report
Retailers and suppliers will need to adapt to consumers’ new shopping behaviors to succeed during the post-recession recovery, according to a new report from PricewaterhouseCoopers LLP (PwC) and Retail Forward, a Kantar Retail company.
The study - The New Consumer Behavior Paradigm: Permanent or Fleeting? - says shoppers will be more deliberate in their spending, as conspicuous consumption will give way to more practical consumerism.
Deal-seeking will be replaced by more selectivity and the use of shopping techniques and purchase tools discovered during the recession, the report says.
In addition, the affluent Generation X and the young Generation Y segments will lead spending in the recovery.
“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 programmes,” said Lisa Feigen Dugal, PricewaterhouseCoopers US 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.”
Retailers need to make promotion and savings-related information more accessible across all shopper touch points, says the report. The growth of online resources and new mobile phone shopping applications has made it easier for consumers to find a specific item, making it vital retailers and manufacturers optimise their search engine and paid search vehicle activities.
The report claims shoppers will retain some of their recession-induced behaviors such as the use of coupons and price comparison techniques.
The research reveals one-fifth of consumers will continue to forgo buying items that seem too expensive, resulting in a contraction in the luxury and gourmet foods markets.
“Although we’re starting to see signs of shoppers getting tired of trading down, they remain cognisant 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. For example, an at-home substitute to an expensive spa treatment or restaurant-quality meal takeout options that replace dining out will resonate with consumers during the post-recession.”
In previous recessions, baby boomers quickly led the recovery but marketers will need to look to the smaller Gen X generation and large Gen Y population to fuel growth in the initial stages of the post-recession recovery, say researchers.
“Retailers and suppliers must realise there will not be a wholesale return to previous shopping patterns and behaviors,” said Dugal. “To succeed during the recovery, they will need to recognise that some shopper segments will still be in a recession shopping mode. They must make sure consumer wants are aligned with the marketplace and turn more need-to-have desires into the must-have needs of Gen X and Gen Y shoppers.”
April 2010 Issue