Excellent, data-packed article on current American shopping patterns. It parses out differences between different ages of shoppers, even in cases where the net results are similar.
While boomers and Gen Y-ers have become more value-driven, they demonstrate this new mindset in different ways. An August 2009 study by TNS Retail Forward, a Columbus, Ohio-based consulting firm, found that 46 percent of surveyed boomers bought only the things they needed this year, compared to 34 percent of Gen Y-ers.
In addition, 41 percent of boomers reported buying fewer things, compared to 28 percent of Gen Y-ers. Boomers are shopping less overall partly because they have accumulated plenty of clothes, books and electronic gadgets over the years, say researchers. Gen Y-ers, on the other hand, are still buying discretionary items, but looking for less expensive versions.
As a result of their necessity focused mindset, whatever shopping trips boomers do take are likely to involve visits to supermarkets and drug stores, mass merchants, office and pet supply stores and home improvement stores. Roughly 22 percent are shopping more at value and discount stores, compared to 14 percent of Gen Y-ers. Moreover, boomers say they are likely to hold on to their frugal ways even after the economy rebounds. According to the survey, boomers say the saving behaviors they will most likely retain include taking advantage of discount offers and doing more comparison shopping before making a purchase.
Members of Gen Y, on the other hand, continue to shop for what TNS calls “self-expression,” in addition to buying necessities and hunting for bargains on durable goods. Self-expression involves consumption of lifestyle goods like books, CDs and games, which bodes well for those retailers. Examples of retailers that offer self-expression include Nordstrom, Victoria’s Secret and the Gap, according to TNS.
“If you look at past [economic] recoveries, particularly after September 11, most of the people that traded down very quickly bounced back and resumed their normal shopping habits,” says Craig Johnson, president of Customer Growth Partners, a New Canaan, Conn.-based consulting firm. “Here, we believe there will be much more of a permanent change in shopping behavior. Wal-Mart isn’t going to retain all its new customers, but we think it will retain at least 50 percent because people will say, ‘Hey, the merchandise here is pretty good, the pricing is pretty good and the service is much better than in the old days.’”
That doesn’t mean, however, that specialty retailers are doomed to flounder. Such chains will simply have to find new ways to offer customers value, experts say. Grocery chain Trader Joe’s has thrived under new market conditions in spite of its gourmet reputation by offering a wide variety of private label products, which are often more affordable than mass brands but equivalent in quality. The chain guarantees that all products sold under its private label are made using non-genetically modified ingredients so customers feel they are getting a great deal for less. Plus, they don’t have to spend as much time comparing products from different brands to figure out which one is better, notes Asturias.
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