THE RETAIL BULLETIN - The home of retail news
Lest we forget
HOME
RETAIL NEWS
RETAIL EVENTS
Fashion
Department Stores
Shopping Centres & Retail Parks
Home & DIY
Electricals
Health & Beauty
General Merchandise
Entertainment
Sports & Leisure
Retail Solutions
Food & Drink
Interviews
RETAIL INSIGHTS
RETAIL SOLUTIONS
ABOUT US
CONTACT US
SUBSCRIBE FOR FREE
Consumers are recovering but the hangover is long-term

New report from WPP's global retail practice reveals significant shift in consumer behaviour

GENERAL MERCHANDISE

Consumers are recovering but the hangover is long-term

New report from WPP's global retail practice reveals significant shift in consumer behaviour

A year on from Lehman Brothers collapse and its knock on impact on consumer confidence worldwide.

Consumers are spending again. But they’re buying less.
this change in purchasing behaviour is long-term and will have transforming impact on retailers, suppliers, media and brands.

These market dynamics are explored in Playbook 2: The Sky Did Not Fall, a new report about retailing in the recession. Published today by The Store—WPP, WPP’s global retail practice, it draws on WPP’s unparalleled knowledge of consumers, retailing, brand and shopper marketing worldwide.

The report is the second in a series developed by The Store—WPP to help retailers and suppliers navigate through these rough times. The first instalment, Playbook 1: Through the Looking Glass, was published last winter.

It argued that consumers will move through the recession in three stages, not dissimilar to the way individuals cope with—and emerge from—grief. Consumers were then in Stage One: Acute Distress, which was characterized by anger and sadness. The report anticipated Stage Two: Acceptance and then Stage Three: Moving On.

Playbook 2: The Sky Did Not Fall, reveals that consumers are now solidly in Stage Two. They are shopping again, in stores and online, relieved that the sky did not fall; that economic decline avoided total meltdown. But consumers are chastened.

“Wallets are open, but only a crack,” said David Roth, CEO The Store—WPP Europe, Middle East, Africa and Asia. “Consumers are purchasing primarily to fill basic needs. They’re tentative about the state of the economy and are ready to snap their wallets shut at the least provocation from negative economic news or a tone-deaf sales pitch.”

While this consumer anxiety will subside, the underlying retail trend is long-term, the report asserts. Consumers understand that, living in a world of finite global and personal resources, they need to make choices. The choice has changed significantly, from “What credit card should I use?” to “Which product should I buy?”

Even when the economy strengthens, this shift in consumer attitude and behaviour will not be easy to reverse because the economic realities shaping this new consumer are also shaping a new retailer.

Retail is being re-engineered to be simpler for the supplier, retailer and consumer. In an effort to increase efficiency and control costs, “smaller and less” is replacing “bigger and more” as the imperatives guiding store size and product range.

“Retailers need to reconfigure their space” says Roth “or else they will be left with large stadiums designed for a sport that customers no longer want to play”

Playbook 2 gives clear action items that retailers and brand owners should take to connect with the new consumer.

In assessing the impact of this shift, “Playbook 2: The Sky Did Not Fall,” discovers:

New purchasing mentality: Consumers have learned that sometimes the cheaper brand is good enough. Unless they are convinced that a product is tangibly or emotionally better, they will select the less expensive alternative—either branded or own label— and pocket the difference.

Expanded presence of online: The decline in the product range found in stores will be accompanied by the coming of age of online and mobile retailing as more consumers click for product research, broader selection and the purchase reassurance found in online customer communities sharing product reviews and evaluations.

Greater reliance on brand strength: Discount is thriving in this economy, which is no surprise. The most important determinant of success, however, is not the sector served but the strength of brand equity.

Accelerated growth of new media: The fast-fragmenting media world offers new opportunities—and dangers—for brand promotion. Mass merchant customer databases and direct access to consumers positions mass merchants to become influential media owners at the expense of traditional players.

Email this article to a friend

You need to be logged in to use this feature.

Please log in here

Subscribe For Retail News

RETAIL EVENTS

The Retail Design Seminar 2018
The Retail Design Seminar 2018
14 November 2018
The Cavendish Conference Centre
The Retail Design Seminar 2018
Omnichannel Futures Conference 2019
Omnichannel Futures Conference 2019
6 February 2019
Cavendish Conference Centre, London WG1 9DT
A truly omnichannel offering requires an understanding of customer behaviour across all shopping channels and how this should impact your overall business strategy
Customer Engagement Conference 2019
Customer Engagement Conference 2019
5 June 2019
Cavendish Conference Centre, London W1
The 10th Annual Retail Customer Engagement Summit
AI in Retail Conference 2019
AI in Retail Conference 2019
18 September 2019
Cavendish Conference Center, 22 Duchess Mews, London W1G 9DT
Retail marketing is changing pace rapidly by making communication across all platforms personalised, relevant, efficient, and helpful. AI not only helps shoppers find a perfect product but also pre-empts the shopping behaviour and speeds up payment.
The HR Summit 2019
The HR Summit 2019
Tuesday 8 October 2019
The Cavendish Conference Centre, London W1
The 11th HR Summit 2019, The Cavendish Conference Centre, London W1, 8 October 2019
Fix The Dinosaur Roundtable 2018
Fix The Dinosaur Roundtable 2018
19 October 2018
The Euston Suite, The Hallam, 44 Hallam St, London W1W 6JJ
A Masterclass in IBMi Legacy Issues