Retailers Get Ready for Thrifty Shift Among Shoppers

by Mark Friedman  on Monday, Aug. 1, 2011 12:00 am  

Eileen Sotomora of Little Rock, with daughter, Charli, said she searches the Internet to find deals on everything from plane tickets to shoes.

Before the recession, consumers responded to retailers’ marketing incentives such as “clearance sales” or “buy one, get one free” offers, said Craig Douglass, a partner in InFocus LLC of Little Rock, a focus group research company.

But not anymore, he said.

Holding clearance sales “says you’re trying to get rid of products that did not previously move well, so the consumer perceives what’s wrong with the product,” Douglass said.

The post-recession consumers aren’t necessarily responding to the lowest price either, said Jim Karrh, who writes the “On Marketing” column for Arkansas Business. So slashing prices shouldn’t be the first reaction of a company, because the move could backfire, he said.

“Once you start cutting prices or doing deals, it’s almost impossible to reverse that,” Karrh said.

 

What the Customer Wants

“What we have discussed with our clients is that they need to be learning — and learning quickly — more about which consumers have been transformed by the recession and how,” Douglass said. “There’s more emphasis on security and value and an appreciation of a simpler and less wasteful lifestyle.”

What the customer is looking for is trustworthiness and perceptions of value, Karrh said.

“People will spend money if they think it will be well spent,” he said.

For example, bundling items together for a price of three for $3 or five for $5 has been a successful strategy for grocery stores, Douglass said.

“At Kroger you can buy 10 cans of lemonade for $10,” he said. “That is an example of the customer demanding more value where it’s not just based on price. Customers are looking for quality products, value packaged and appropriately priced.”

 

 

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