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Web and recession combine to change spending patterns

Growth in consumer confidence is putting consumers back in the mood to spend, but how they shop has changed.

Marketers can take heart in a Deloitte study showing that 55 percent of consumers think the economy is recovering from the recession, 64 percent feel their household financial situation is the same or better than last year and 63 percent plan to spend the same or more at retailers this year.

“Retailers should be encouraged by consumers’ tone as they plan for … (the) fall and winter selling session,” said Stacy Janiak, vice chairman of Deloitte.

The survey pointed out how shopping habits have changed because of the explosion of information available online. Three-fourths of consumers now use the Web to research products and prices before visiting a store. More than half use social network sites during the buying process.

One in three buyers is forsaking bricks and mortar and doing more online shopping than just a year ago, and 20 percent turn to Web-enabled mobile phones for help.

Deloitte found that 45 percent of consumers changed their retail store preference to save money during the recession. Of those, 70 percent do not intend to switch back to their prior favorites.

Grocery shoppers have also changed their attitudes about brand-name products. Brand-name products still rule (82.7 percent of dollars spent and 78.1 percent of units consumed), but store brands have shown significant growth, especially among younger female heads of household.

A recent Nielsen study found spending on store brands was up 2.1 percent since 2007, and store brand unit volume was up 1.9 percent.

This byproduct of the recession should be a wake-up call for brand marketers.

“Younger female heads of household have a propensity to shop store brands, which is contrary to the conventional brand wisdom of targeting younger buyers to secure their loyalty early on,” said Todd Hale, senior vice president of consumer and shopper insights at Nielsen.

Always study the consumer

According to Nielsen, the dominant profile of a store brand user is a non-urban, middle-income household headed by a younger woman and with three or more members. On the flip side, male shoppers over 65 years of age hold onto brand loyalty most intensely.

Brand marketers who have a history of strong marketing support — products such as beer and candy — or have demonstrated consistent innovation in product development, such as deodorants or detergents, have little store brand competition.

On the other hand, non-differentiated products such as dairy and non-food grocery items have the stiffest store brand battles on their hands.

The marketing lesson in all of this is that the consumer is an ever-changing creature that marketers must always study.

 
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