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retail-features

Frugal Shoppers Appear Here to Stay

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

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Greenfield added women are now proud to say they got a necklace at Topshop, for example. “People’s security at mixing price points is much stronger.”

Women are now not only willing but eager to mix designer products with styles from J. Crew, Uniqlo, H&M and Zara.

“Now you can buy groovy, stylish clothing at all price points,” said Simon Doonan, creative director of Barneys New York. “That was never the case in the past. Now there are so many different price points and levels. At Target and H&M, you can still find merchandise at a high-fashion design quotient. Obviously the economy has put a damper on it. But we have tremendous loyalty with people saying ‘I’m a Barneys person.’ The self-definition of being a Barneys girl is very strong.”

Yet while he believes shopping is a leisure activity that remains central to the culture, and consumers remain loyal to particular retailers, Doonan admits, “They [consumers] are interested in the backstory. The consumer knows who Alber Elbaz is. They know who the Rodarte girls are. It’s no longer a fashion-insider thing. They’re knowledgeable and very savvy. They think of themselves as an extension of the place they’re shopping at. It takes on a new level. It’s a different emotional commitment.”

Which is partially what is fuzzing the debate over whether there is a new consumer at all. Shoppers are emotionally connected to brands more than ever, so how then can they have changed?

“I don’t think there is a new consumer,” said Craig Leavitt, ceo of Kate Spade. “Some of the habits are a bit exaggerated now. She’s more careful and probably spending a little less. But as long as you continue to excite the customer, she’s still happy to buy. She was more open before, but it’s a requirement now to get her excited about what she’s buying.”

Richard Dickson, ceo of branded businesses at Jones Apparel Group, also doesn’t think there’s a new consumer, but simply one who has more choices as to how and where they shop. “The landscape of choice has changed the dynamic of when they shop. It’s gone way beyond e-commerce. They’re into mobile marketing, where you can literally see a product where you are, order it and it’s delivered to your home.

“The name of the game is change,” he continued. “We’re all in this new territory together. The pressure is on all of us, especially the brands that are millennial driven.”

William McComb, ceo of Liz Claiborne Inc., pointed out there are pockets of consumers who haven’t changed a lot, and groups who have changed. He described two different customer types the firm targets with its various lines: The young woman who has her own apartment, pays rent and doesn’t have a mortgage and has a lot of discretionary income for fashion and beauty categories. “She’s gotten choosier and a little promotional-oriented, but there hasn’t been a fundamental sea change in where she’s spending her money,” he said.

The other customer is the mother of two children in a dual-income household, with job anxiety and worries over employment. “She’s saving more and cautious. While she hasn’t changed her fantasies, hopes and desires, nor adopted a depression mind-set, she’s very brand-conscious and hunting for deals more.” She might not be going to the mall as much, her five major apparel purchases a year may have gone down to two and she may have switched from Target to Wal-Mart, “but she still wants to look and feel her best.” She isn’t shopping as much and is doing it in a more disciplined way.

“We haven’t had the effect of World War II, where it’s knocked out everybody’s hierarchy of needs,” said McComb. “That hasn’t happened. People are spending, and the underlying psyche of spending hasn’t changed.”

At least not yet, perhaps — but if the economy continues to limp along for years to come, a shift is bound to take place. Popcorn, for one, predicts the changes that already have occurred will be long-lasting. “Consumer confidence took another hit in July; a reflection of job-market worries and the global economic climate. I do think it’s more fundamental.”

She said the consumer is more value- than just price-conscious.

“That’s the way she makes her assessment of brands — and she’s happy to give them up, as evidenced by 60 percent trading off a name brand to a store brand, with 9 in 10 satisfied with the performance of the store variety. Technology is the enabler — it allows her to make her assessment of the brand’s total value in comparison to alternatives and to solicit the counsel of her peers in selection. And technology gives the consumer a megaphone to support brands that support her, while protesting against those who don’t,” said Popcorn.

She walked up Madison Avenue recently, and the stores were empty, reinforcing her view that the economy won’t be returning to its previous levels anytime soon. “It’s not going to happen. Not ever. It’s permanent and we’re getting used to it and it scares the hell out of us.”

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