Post recession, researchers see shoppers' "pent-up demand" ready to explode
Published in CSP Daily News
PHOENIX -- The dual trends of recessionary spending and growing online communities are reshaping shopper spending habits and changing the game for convenience store operators, according to speakers at CSP's 2009 Consumer Insights Forum in Phoenix.
To start, numbers are showing that shoppers are easing up on their penny-pinching ways, according to Al Meyers, senior vice president of business development for Retail Forward, Columbus, Ohio. Addressing the group of about 75 retailers and suppliers, he said that consumers post-recession will still be making "mindful" choices, [image-nocss] opting to remain frugal in ways they find meaningful.
As for the effect of online opportunities with both shopping and marketing, Dorothy Allan, senior vice president of retail strategy for TracyLocke, a web-marketing consultancy based in Dallas, said both Internet and mobile shopping are becoming a fact of life, with the mobile activity surpassing the Internet by 2011.
"It's like a rocket coming at us," she said.
In describing the difference between mobile (or cellphone) shoppers vs. Internet shoppers, Allan said it's the difference between a hunter and a gatherer. A hunter is a more directed, "I know what I want" shopper who is interested in handling the transaction in a couple of clicks. The Internet shopper is more of a wanderer, taking time to float through websites and gather what is of interest.
In describing numerous characteristics of online-shopping behavior, Allan said life stages play a role, with everyone from Baby Boomers to so-called "Millennials" having different priorities and behaviors while cruising the Internet. Retailers must begin to understand the differences between age groups, men vs. women, mobile vs. Internet shoppers to find that "sweet spot" for their businesses.
"You can't be everything to everybody," Allan noted.
In terms of economic trends and the effect the recession has had on shoppers, Meyers said last year's credit shock, Wall Street collapse and housing implosion created a "perfect storm" that demoralized shopper psyches. It caused consumers to close up their wallets for all but vital needs. Since then, the stabilization of the housing market and other factors are "starting to unlock" that freeze, and at least for several demographics, including Gen X'ers, a release of pent-up demand is expected.
The key will be fixing the jobless issue, Meyers added, noting how as a result, categories such as apparel will continue to see problems. But Retail Forward analysts are looking at 2010 as the start of the recovery, with 2013 seeing growth rates that the nation is more accustomed to.
He said Boomers are likely to continue to be a force in the recovery as they themselves have to keep working to recoup wealth lost as stocks plummeted. But they will not be spending as much since they have fewer needs. Meyers advised retooling for the next generations that have careers to launch, children to raise and homes to tend to.
In his concluding statements, Meyers focused on the boom of private brands, which mega-retailers, such as Bentonville, Ark.-based Wal-Mart, and c-store giant 7-Eleven, Dallas, have embraced. He said companies are wisely choosing not to focus on private "label," which had the stigma of being a second-rate product, but private "brand." He said companies are investing in store brands, improving taste profiles and giving personality to their brand identities.
"It's not just a label slapped onto a product with cheap ingredients," Meyers said. "It's a brand."
Watch for a full report from CSP's 2009 Consumer Insights Forum in the December issue of CSP magazine.