On reaching new frugal consumer
Ray Allegrezza, Editor-in-chief -- Furniture Today, March 16, 2009
As if furniture retailers didn't already have enough challenges, it seems like a growing number of consumers — even the ones that are still well-heeled — are flocking to consignment stores and thrift stores in search of affordable home furnishings.
Considering the economic outlook, who can blame them? We all know that consumers typically pull in their horns during any economic slide, but this slide, which has all the makings of a free-fall, could be writing an entirely new chapter in the book of consumer buying habits.
I've spent the past month or so online, reading anything and everything about how this downturn is impacting consumer behavior.
Based on my admittedly rudimentary research, I think retailers need to adjust their selling strategies to appeal to this burgeoning frugal shopper.
Wesley Hutchinson, a professor of marketing at Wharton, noted that the Great Depression changed consumer behavior and shopping attitudes for a generation. While he's not sure if our current economy will leave an identical psychological scar, he does say “there's a precedent for a very large shift.”
Assuming Hutchinson is right, retailers will be selling consumers who acted like my parents, who having lived through the Great Depression, took nothing for granted. They learned early on that you worked for what you wanted and you saved part of each paycheck for the proverbial rainy day.
My folks also were old school when it came to credit. They were not big fans of credit cards and if they did on rare occasion use them, they paid in full the day the bill came in.
They also learned to live within their means. If they couldn't afford something, they did without.
Stephen Hoch, also a professor of marketing at Wharton, recently said that consumers who had learned to trade up when times were good are rapidly learning to trade down. He believes as I do that consumers are finding a new sense of well-being in becoming more discerning shoppers.
Hence the growing interest in consignment shops.
In a recent survey, retailers told us their biggest challenge was simply getting shoppers into the store. Maybe the answer is to set up an area of your store as a consignment shop.
After all, who can resist a bargain?
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