Though experts chime in from every angle, some commonalities surface among their assessments of the changing cultures of consumerism and retailing. Experts seem to agree that consumers are still insecure about spending; that consumers are now shopping for value rather than price; that the luxury market is taking off; that technology is increasingly integral to retailing; and that consumers are starting to keep it local.
Although consumers are beginning to treat themselves to a few small splurges, they’re not exactly seeking to extend their own financial stimulant to the economy, per se. So, as long as the economy continues to teeter between recovery and a slump, so too will consumers’ spending patterns.
“It [has a lot to do with] what’s going on in Washington,” says Pam Goodfellow, consumer insights director at consumer-intelligence firm BIGresearch. “The debt crisis [and] unemployment are really sticking points right now with consumers. It’s not that consumers are so concerned with their own gap personally, but seeing [the high] unemployment rate is worrisome. They’re worried that the economy is not getting back on track like it’s supposed to be.”
According to Goodfellow, BIGresearch’s September Consumer Confidence Survey revealed that only about 20% of consumers are feeling “confident or quite confident” right now—a September rating that is actually the lowest BIGresearch has seen since the survey started about 10 years ago. In a normal economy, 40% to 50% would be the expected consumer-confidence range.
It is safe to say, however, that consumer confidence has increased since the peak of the financial crisis. One of the key occurrences of that time, particularly within retailing, was the demand for the lowest prices across all goods categories. Whether consumers were out of work and spending only according to budget, or fearful of losing work and so focusing attention on savings, they shopped according to price. Now, though still financially strapped, consumers are more interested in what they will gain from their purchases.
“One of the really interesting things we’re seeing is that it’s more about buying for value rather than just buying the lowest price,” says Goodfellow. “During the recession everybody was really focused on the bottom line—how much they were spending when they were checking out. We were less focused on talking to sales associates about the benefits of a certain product. [Now] we’re looking for value, quality and customer service; those types of things have come back into play.”
What is value? Value has to do with the quality of a product. This might be its nutritional value, its potency, its durability or its ability to maximize whatever experience the customer is seeking from the purchase. Value may also involve consumers’ belief systems—ideas they hold about the environment or people in need—in other words, the causes they’re willing to support. It can also involve service.