Frugal Shoppers Appear Here to Stay

Consumers engage more in online comparison shopping, mix price points and buy less.

The new consumer is doing a lot of her purchasing and researching online

The new consumer is doing a lot of her purchasing and researching online.


“Mindless excess is over.”

So says Faith Popcorn, chief executive officer of marketing firm BrainReserve, when asked whether women will go back to their ferocious shopping habits once the economy fully recovers. “The entire consumer mentality has changed across the socioeconomic spectrum,” said Popcorn. “We understand and buy what we truly need, and we actually want less — stuff is clutter and we want simpler. We call it cashing out.”


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So is this the dawn of a New Consumer Age, as many experts contend, one that will force brands and retailers to make tectonic changes in the way they do business and transform the nature of shopping in America? Or is the consumer simply the same — just slightly different due to economic pressures?

It’s a debate obsessing companies at all price levels and industries — from fashion to food to cars. Regardless of which side of the argument one falls on, it’s clear the shopping rules have changed and key trends include:

• The boom in e-commerce, making it easier for consumers to buy from home — and to comparison shop.

• Technology is now more fashionable than fashion — in other words, teens and twentysomethings would rather buy an iPad than a handbag.

• Social networks are driving real consumption, with friends telling friends about hot products or brands — meaning brands have to enter the conversation.

• The Great Recession has forced everyone, even the rich, to alter their shopping behavior and buy less.

• High levels of personal and household debt continue to constrict the Baby Boomers, who are looking for simplicity and value.

“Women are somewhat more hesitant to loosen their purse strings — especially for nonessential items and major expenses that can wait,” according to “A New World Order of Consumption,” a Boston Consulting Group study. “Across all regions, they are more likely to seek out sales promotions, spend time shopping around for the best prices, and shop in discount stores.”

The study noted consumers’ values and priorities are shifting. “Home and stability have taken on greater importance, while overt luxury and status have faded. The great hunt to find the best value at the lowest price remains firmly top of mind almost everywhere, particularly in Europe and the United States, where consumers enjoy the feeling of what they view as smarter shopping.”

Among the groups it sees as more likely to spend are young singles, dual-income couples with no children and empty nesters.

According to a Booz & Co. survey, consumers are relying more heavily on coupons, seeking out the best deals, waiting for sales, saving their money, buying more private label and doing more research online before heading to the store.

On a conference call Thursday with investors, Kevin Mansell, chief executive officer of Kohl’s Corp., described his customers’ behavior right now: “We see one that’s reluctant to spend. We see one that’s focused on the long-term value of what she buys.”

Andy Murray, global ceo of Saatchi & Saatchi X, a shopper marketing division of Saatchi & Saatchi, observed, “We do believe [consumer shopping habits] have changed. The question, of course, is will it change back? The change is in technology. In terms of e-commerce, there’s a lot more granularity and research. Technology pushed her over the transom, where she’s not coming back. The way she approaches shopping is fundamentally changed. It’s driven by the economy, but aided by technology.”

Tim Calkins, clinical professor of marketing at the Kellogg School of Management at Northwestern University, believes the consumer has new priorities. “I think the economic mood has clearly shifted. Consumers are acting differently than they did several years ago. There’s a different mind-set. They’re cautious about their purchases and more thoughtful about what they buy. Debt levels are coming down. The question everybody is asking is, ‘Will that continue as things improve, or will we return to the previous spending levels?’ We really don’t know,” said Calkins.

“Consumer spending is clearly tied to the economy,” he continued. He said even though debt levels are declining, absolute debt levels remain very high. “Credit card debt is still very high. Data say people are saving more and spending less. My sense is we’ll see a hesitant consumer for the next several years.” An indicator of that could be the savings rate, which jumped to 6.4 percent of income last month — its highest level in more than a year.


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