Today’s retail consumer is considerably different from the consumer of yesterday. In the 50’s, consumers were happy to have so many different choices. They shopped a variety of stores, not necessarily giving just one store all of their business. Times were simpler then and consumers could get a lot more for their retail dollar. In the 60’s, consumers were trying new and innovative sales techniques and products. Television had finally come unto its own and many retailers were able to advertise their products on T.V. This had a huge impact on what and where consumers shopped. In the 70’s and 80’s, consumers were demanding more. If they were going to dip into their discretionary spending, they wanted to make sure they were really getting their money’s worth. They were also demanding more value for those items they needed to buy each month. Today, things are changing. You need to adapt, evolve and reinvent yourself continuously.
As we moved into the 1990’s, consumers were just beginning to use the computer to analyze their options and see what was available, at what price. Then, the 2000’s brought about a new century of technology, with ultra new-age methods of communication. Unfortunately, we landed in 2008 and 2009, headed for a recession which ultimately changed everything we thought we knew about retail consumers.
As expected, the global recession changed the behavior of consumers. They became more value conscious, more attracted to private labels, less likely to purchase large discretionary items and less likely to eat outside the home. Yet the duration and depth of the recent downturn raises the possibility that these changes in consumer behavior will be sustained even after recovery takes place.
Here are a couple of trends that will have long-reaching affects on consumer buying behavior:
Too Much Product
Most retailers offer too much product. This is a symptom of a disconnect between buying teams and the ability to understand customers, but it is also a failure to recognize the life cycle of products, brands and SKUs. Retailers often boast about the large number of SKUs they offer, but exiting a category or product range can be as important as the introduction of a new one. In the future, smart retailers might boast of how many SKUs they have eliminated and take pride in the focused nature of their offering. Offering fewer products means that the retailer truly understands the consumer – their preferences and lifestyles – and can anticipate changes in those attributes. This will help strengthen customer loyalty.
Retail today is hard work. Shoppers are exposed to 1.5 pieces of marketing material every second. Shoppers engage with a marketing display once every 4.3 seconds. 84% of marketing material is ignored. “Over half of all shoppers that spend at least $50 in our store pre-research that purchase online” states Barry Judge Chief Marketing Ofﬁcer Best Buy. “82% of shoppers use their mobile phone while in the store” responds Erin McKelvey Senior Vice President Millennial Media. The Internet and social media are changing the way people shop, make referrals, recommend products, listen to others, decide what to buy, and decide where to buy it. Especially for those under 30, technology is everything. Their mobile phones have become part of their “family” and they don’t go anywhere without that attachment to the outside world. Retailers will have to start figuring out how to make social media and the Internet more of their marketing story and develop their brands around the mobile generation. . Internet shopping may become the number one way people shop. So it is important to keep your website updated and constantly improve it.
The Urban Push
Less than 5% of the world’s population lived in cities a century ago. In 2008, for the first time in humanity, that figure exceeded 50%. In the last two decades alone, the urban population of the developing world has grown by an average of 3 million people per week.” By 2050, it will have reached 70%, representing 6.4 billion people. Most of this growth will be taking place in developing regions.
Where will this lead us? We now have a global consumer arena inhabited by billions of experienced and newly-minted urbanites. The significance? A forever-growing number of more sophisticated, more demanding, but also more try-out-prone, super-wired urban consumers who are snapping up more ‘daring’ goods, services, experiences, campaigns and conversations.