Curb Your Enthusiasm About Economic Recovery

Optimism and the enthusiasm accompanying optimism are essential drivers of retailer success. Still, the optimism must be tempered by attention to the marketplace and a realistic analysis of the signals. Results of “The Harris Poll” announced last week offer a fine proving ground for that balance.
     Market research firm Harris Interactive surveyed about 3,200 U.S. adults in February, asking, “Have you done or considered doing any of the following over the past six months in order to save money?” The responses were then weighted so that the conclusions would better reflect the composition of the entire U.S. population in terms of age, gender, race/ethnicity, education, geographical region, and household income.
     Here are the major conclusions with implications for your retailing practices:

• Over the past six months, there have no substantial changes in what consumers overall see themselves as doing to save money. Although many indicators of consumer confidence have been upbeat, most consumers are still staying cautious. The implications for you: Watch your expenditures. When expanding inventory or operations, do so gradually and monitor the results. Do SKU rationalization by pooling product images. That is, in advertising and signage, use different marketing messages for the same product.
• Older consumers allow themselves more expenditures in certain categories than do younger adults. These categories include going to a hairdresser/barber and subscribing to cable TV. One explanation is that senior citizens are less worried about the unemployment rate and the residential foreclosure rate than are the younger adults. The seniors are often retired from employment and have had their home loans for many years. The implication: Increase attention to the senior market. Research at University of Michigan, Singapore Management University, and Ben-Gurion University finds that older consumers are better able to analyze selling points in the morning than in the afternoon. As the eyes age, they require more light. For stores that let daylight enter, the morning brightness can help seniors tell the blues from the greens and the foregrounds from the backgrounds.
• Of the twelve techniques the Harris questionnaire presented for curbing expenditures, the consumers’ most popular one, by far, was to purchase generic brands instead of name brands. About 72% of the respondents have either done this or are considering doing it. The implication: Carry house brands, especially in product categories shoppers might hesitate purchasing. A house brand label can sway the consumer toward selecting the item.

For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more:
Rationalize Your Inventory by Pooling
Help Seniors to Shop Early
Dissolve Cautions About Private Label Goods