We're not very good at being frugal, like the Greatest Generation.
Upper Montclair, NJ (PRWEB) October 28, 2009
There'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).
"The 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."
Some 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.
One trend that promises to stick with the aid of technology is the quest for value and the best deals available. 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.
Consumers 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.
With 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.
A 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.
"People 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.
D'Anna 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.
An Executive Summary of the "RETAIL:NEXT: Fad or Trend?" study is available for download:
Survey methodology: The "RETAIL:NEXT - Fad or Trend? Will recessionary shopping behavior continue?" survey was fielded in August, 2009 by Dechert-Hampe Consulting. This was an internet survey covering the RetailWire community and other industry participants. The survey results are a composite of 317 total responses. The respondent population breaks down as 34.5 percent Manufacturer/Vendor, 28.1 percent Retailer/Wholesaler/Broker/Distributor, and 37.4 percent Agency/Research/Design/Tech/Services. The study was underwritten by retail design firm Miller Zell.
RetailWire is the retail industry's premier online discussion forum. RetailWire goes beyond conventional headline news reporting. Each business morning, RetailWire editors pick news topics worthy of commentary by its "BrainTrust" panel of industry experts, and the general RetailWire membership. The results are virtual round tables of industry opinion and advice covering key dynamics and issues affecting the retailing industry.
Dechert-Hampe & Company is an independent management consulting firm specializing in Sales and Marketing services. DHC works to help clients succeed through Sales & Marketing solutions that result in tangible change, measurable results, a competitive advantage and a return on their sales & marketing investments.
About Miller Zell
Miller Zell is a leading retail design company providing world class in-store selling environments that captivate and connect with shoppers on a practical and emotional level. Using a collaborative approach based upon shopper insights, Miller Zell helps retailers and manufacturers to create retail design programs that engage shoppers, leverage the in-store experience and maximize selling opportunities.