LAS VEGAS, September 22 — Despite your personal experience, the recession may have its upside -- at least according to one speaker at the annual summit of Shop.org, the digital arm of the National Retail Federation.
Online retailers attending the Shop.org Summit already indicated that they think things are looking up: 62 percent expressed an optimistic outlook for the 2009 holiday season. But Kelly Mooney, president and chief experience officer of Resource Interactive, a research firm and consultancy, offered attendees here a very different piece of evidence: This season's network-television lineup reportedly includes some of the best programming seen in the past several years, with writers deriving creative inspiration from current events.
Mooney warned, however, against getting "too celebratory too soon" -- the customer has changed, which means retailers, too, have to learn and adapt. The recession may be inching toward its end, but consumers may not revert back to the spend-happy behavior of the past. The average American household income, Mooney noted, dropped from $51,295 in 1998 to $50,303 in 2008 -- but consumers aren't simply shopping less, they're shopping smarter.
Approximately 90 percent of households reported a reduction in shopping, Mooney said, but consumers are "wearing frugality like a badge of honor" -- 55 percent of those cutting back said they did so by choice, and only 45 percent did so out of necessity. Even more telling, she noted that those who do open their wallets are reporting a sense of shame: In a survey about post-shopping sentiment, 5.3 percent of consumers report feeling guilty, while 20 percent said they were "downright depressed." Women are even using the Internet to shop "secretly and quietly," Mooney said.
It remains to be seen whether these changes in consumer attitudes will endure, but Mooney focused on the shopping behavior of two groups in particular:
- the second wave of Generation Y (ages 13 to 18) — a group that Mooney called the "true" digital natives, they express concerns about economic issues that previous generations of teenagers did not; and
- mothers (ages 30 to 55, both married and single) — a group that Mooney said is in the midst of redefining the difference between "need" and "want" with regard to household expenditures.
Today's teenagers, Mooney said, "are forced to grow up faster," as they witness the impact the economy has on their families. In contrast to the traditional teenage concerns, such as popularity and friendships, the top three concerns expressed by this cohort are:
- whether they will find jobs after graduation;
- what they will have to give up because of the recession; and
- how their parents are faring financially.
Mothers, surprisingly, report having come to terms with the pressures of living on a budget, but many are claiming to recognize a silver lining: The recession has provided mothers a chance to teach values around resourcefulness, and enabled them to promote low-cost, family-oriented activities.
In terms of shopping, Mooney said, teens and their mothers have become savvier consumers as they conduct research online, scour the clearance racks, and search for coupons. (Coupon sites are now the second-most-trafficked sites, according to eMarketer, behind job-search sites; The New York Times recently reported "the first jump in coupon redemption since the early 1990s," calling the rebound a "clip-and-save renaissance.") What's more, teens -- 75 percent of whom, according to Seventeen magazine, are receiving the same allowance as a year ago, with weekly allowances averaging $20.70 -- are saving their money while selling and swapping possessions to make the most of what they have.
Brand loyalty is where teens and mothers differ, according to the results of an open-ended survey conducted by Mooney, in which consumers were asked to list specific brands they were looking to in the current economic climate. Teens, naturally more susceptible to peer pressure, still preferred specific name brands, even if that meant waiting a bit longer before being able to make a purchase. (Seventy-three percent of consumers age 13 to 21 reported shopping at a fixed group of stores.) Mothers, however, reported a willingness to trade way down, or to do away with specific brand preference altogether.
The top three for teens were:
- American Eagle; and
Walmart and Target were the two brands mothers were flocking to most often -- with "none" the third-most-popular response.
Mooney ascribed a large part of the changes in behavior among both groups to their digital sophistication. Teens today, as Mooney stated, "are the true digital natives," and technology is how they seek to achieve independence from their parents. This generation, she added, "are more adult-like, more responsible than teens in the past [were]." What's more, she cited a recent survey of 15-to-17-year-olds indicating their technology consumption has largely accelerated in the last six months:
- Texting increased by 44 percent;
- social network usage increased by 25 percent;
- email adoption increased by 4 percent (which Mooney says is due to a smartphone-fueled revival of email for this group); and
- instant messaging declined by 7 percent.
Mooney added that technology has become so ingrained in this generation's life that 14-to-18-year-olds even report having "online chores" such as sharing pictures with relatives (cited by 38 percent), and locating driving directions (35 percent).
In contrast, mothers look to technology to monitor their children and connect with their families, Mooney said. The Web has become an integral part of mothers' overall shopping experiences: 98 percent of women who buy in stores report having pre-shopped online. Moms report using the Internet to:
- save money (46 percent);
- help make smarter decisions (41 percent); and
- earn money through online selling on sites such as eBay or Craigslist (21 percent).
In short, teens are more savvy, and attuned to financial sensibilities; women don't necessarily want the lowest price, but the best value. In an economy that demands accountability, the relationship between moms and their teenage children is more intertwined than ever before. This new state of affairs, Mooney said, will require marketers to master a new skill: gauging consumer expectations in order to dispel preconceived notions. Retailers need to cater to a teenager's wants while also satisfying a mother's need to responsibly justify the purchase -- an innovation for which Mooney recommended the following three-step process:
- Collect insight -- to understand consumer desire and whatever tension consumers are trying to reconcile (e.g., payment, price comparison, wishlist creation).
- Create rapid prototypes -- and get consumer feedback.
- Test, fail quickly, learn, and launch -- don't get stuck overanalyzing.
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