Retail:Next Study Results: Separating Fads From Trends
how much financial trauma is required to permanently affect how consumers
shop? That is a question that both retailers and brand marketers are asking
as the country begins what most expect to be a slow climb out of the worst
recession in U.S. history dating back to the 1930’s.
no doubt that the downturn, which began back in 2007, has made a change in
a variety of areas in the lives of Americans. As the latest Retail:Next study
from Dechert-Hampe and RetailWire, Fad or Trend?: Will Recessionary Shopping
Behavior Continue?, points out, retailing professionals believe consumers
have made a number of shorter-term adjustments in their daily lives. These
include eating out less (73.6 percent), buying fewer new clothes (73.1 percent),
vacationing closer to home (72.2 percent), purchasing American-made goods,
(70.2 percent) and buying fewer luxury goods (56.6 percent).
American consumer in particular is not good at doing with less of anything,” said
Ray Jones, Dechert-Hampe’s managing director, in a RetailWire webinar last
week. “We’re not very good at being frugal, like the Greatest Generation.”
other changes that Americans have made are more likely to stick, according
to survey respondents. Among these is a trend to staying connected with others
through social media. More than 83 percent see this phenomenon outlasting
the recession and most of those see it as a permanent change in the way Americans
communicate with one another. Just over 80 percent think buying fuel efficient
autos is here to stay and 72.3 percent (get out the smelling salts) are looking
for children to be living longer at home before going out on their own. It
looks as though all those folks looking forward to becoming empty nesters
may need to wait a bit longer.
trend that promises to stick with the aid of technology is the quest for
value and the best deals out there. Over 72 percent see comparison-shopping
becoming standard practice for many, with 60.7 percent seeing the desire
to save as a trend that will benefit discount stores.
will increasingly turn to discounters of all sizes and types as they hold
retailers’ feet to the fire on the value of service. Nearly 80 percent of
respondents see consumers renting low-priced videos from kiosks such as those
offered by Redbox rather than going to video stores. Nearly 59 percent believe
that consumers will make longer-term shifts to buying coffee at McDonald’s
rather than paying $3+ for a drink at Starbucks. In consumer electronics
and toys, discounters are seen as taking business away from specialty outlets
such as Toys “R” Us and Best Buy.
health costs continuing to rise under the current system in the U.S., more
than two-thirds see lower-cost alternatives offered at retail (i.e., in-store
clinics) continuing to grow.
number of behaviors that predated the recession, such as the trend toward
store brands, have accelerated and are likely to continue to grow in the
years to come, according
to the study’s authors. However, Ben Ball, senior VP at Dechert-Hampe, makes
the distinction between buying “cheaper stuff” and quality private label.
buying a product just because it’s cheaper and not because they perceive
it’s offering a better value – which I believe the store brands have been
doing a great job of over the last few years – that’s going to change as
soon as people can [afford to],” said Mr. Ball.
Hawthorne, strategy director for MillerZell, agrees, saying “trading down
to lower cost alternatives is more related to circumstances.” With the new
emphasis on value by retailers, “We’re seeing that, in-store, retailers are
investing more in promoting their brands.” She cited Publix Super Markets
whose brand has “become very strong…very easily identifiable and is perceived
as a high quality option” by their shoppers.
Discussion Questions: How
do you see the consumer trends that are carrying over post-recession changing
the retail landscape? How will they affect the way retailers manage the in-store
Study Executive Summary: Fad or Trend? Will recessionary shopping behavior
continue? – RetailWire/Dechert-Hampe