"Larry Bird is not walking through that door, fans. Kevin McHale is not walking through that door, and Robert Parish is not walking through that door. And if you expect them to walk through that door, they're going to be gray and old."
Boston Celtics fans well remember this infamous quote by tricky Ricky Pitino in March of 2000.
Well, a report published this week by eMarketer: The New "Normal" in Consumer Shopping Behavior provides more evidence that the old post-recession shopper who led the way out of the downturns of the early 1990's and start of the 2000's will not be walking through any shopkeeper's door this time.
While the findings are not drastically different than recently reported trends, some of the stats in the eMarketer report are stunners:
- 72.9% of polled consumers said they didn’t plan to return to how they used credit cards before the recession.
- 70% of Americans said their economic situations were the same or worse than a year ago
- 83% expect to spend the same or less on non-essential purchases in the next 12 months
- 55% of respondents to a PriceGrabber.com survey said they were spending more time shopping for and researching purchases on the internet this year, compared with 26% in 2009
These remarkable statistics indicate that this Great Recession is a game changer and consumer based businesses must take a hard look at how their customers are behaving and align their digital marketing initiatives with this transformed shopper. But what makes this recession and eventual recovery so unique and difficult to predict? A couple of reasons stick out:
A Demographics Shift
The Baby Boomer generation led us out of the previous two recessions with their trademark conspicuous spending and insatiable appetite for consumables. They won't this time. The prime earning years for Boomers are ending and their average household wealth has been whacked, down about 40%. They are approaching retirement age and the need to save will fiercely compete with their propensity to spend.
The Gen X generation is in a big spending lifestage (age 29-45) but they are smaller in number and this is the second time in their careers that they have faced a recession. With pensions a relic of the past and social security in question, they are playing without a net. I think they will spend cautiously even in these peak earning years.
Gen Y'ers actually outnumber Boomers, and because of their youth (10-28) their spending has been less impacted by these economic times. Historically this group likes to spend, especially on techie "must-haves". This group will be important when they establish their own households, but currently only account for 4% of household spending.
A Socio-Economic Shift
Oh really? OK, so you've heard this before. But it's difficult to overstate how much the economic shocks of the past two years have changed consumer and cultural behavior. We've all felt the shift from extravagance to restraint. There is a new stigma associated with spending and this will be a tough one for retailers as consumers reject impulsive spending and embrace a more thoughtful, pragmatic approach.
Consumers are tuning out traditional marketing messages, and instead are proactively researching products on-line. They're using social technologies to conduct research, get advice, read peer reviews, and broadcast their own complaints. Shoppers were exposed to an array of digital tools during the recession (mobile coupons, comparison shopping sites) and have become invested in this new shopping experience.
Clearly, the rules of the game have changed. We can not realistically expect a new spending spree to lift us out this recession as has happened in the past. Larry's not walking through that door. But today's shopper has created a new playing field for us to participate. There are new tools and opportunities but you need a game plan. Here's my starting five:
1. Know Your Buyers - With consumers gaining so much control in the shopping process, it is critical that you develop a detailed understanding of your primary buyers. They expect it! What are their goals, aspirations, background and daily activities? How do they describe your product or service? What words do they use? What media do they use? This is the first place you should start to develop relevant offers and messages that resonate with your customers.
2. Customize - As we've seen, today's consumer is purposeful and pragmatic. They do their research early in the process and have very specific needs and requirements. Businesses who try to be all things to all these consumers will fail. Consumers are not window shopping looking for ideas. They are looking specific solutions. Be clear on what you provide.
3. Get Found Online - The number of online shoppers researching products online has doubled in the past year! Many are looking for your product or service. Are they finding you? Do you have a website? Is it optimized for your primary buyers? Have you employed the keywords that your buyers use? Do you know where your buyers go online for information? Are you there too?
4. Get Social - The Internet is a free medium where you can participate in conversations with your customers and showcase your expertise. Learn where your customers go for information and engage in conversations. Start listening. Set up accounts on Facebook and Twitter. Start blogging. Your buyers are actively looking for solutions, be a resource for them!
5. Be Relevant - You need to understand your buyer's "need to haves" in order to position your product offerings as relevant, responsive solutions. Think from your buyer's perspective and look for opportunities to align your services with their needs.