Since 2008, there have been significant changes in the behavior and spending habits of American consumers. As the economic downturn lingers, analysts predict many new shopping habits – increased Internet use, decreased brand loyalty and the end of the “buy now, pay later” attitude – are now firmly entrenched in U.S. shoppers. The new “normal” means that the buying process now involves online research and the use of multiple point-of-sale incentives, such as a discounted price plus a retailer coupon.
Shift in Consumer Behavior Here to Stay
According to a report by PricewaterhouseCoopers, the economic downturn has caused enduring trends in consumer behavior that will continue, with rampant consumerism being replaced with deliberation and selective spending. Only 7% of shoppers surveyed for the report said they had made no changes whatsoever to their consumer spending habits in response to the economy compared to 34% of respondents who made significant changes to their buying habits.
A Gallup poll also reported that three in four respondents had cut back on discretionary spending like entertainment and recreation in response to the economic downturn and rising consumer prices. 49% of those surveyed bought cheaper, lower-quality goods and 46% shopped at discount stores more frequently.
Consumer Spending May Be Up, But Still Far Below 2008 Levels
Overall, daily consumer spending remains far below the levels seen in 2008. A new Gallup poll shows that self-reported spending among Americans in stores, gas stations, online, and in restaurants was about $61 a day, $45 less than the $106 daily average spent in 2008. However, in 2009, consumers reported spending about $64 a day.
Savings Trump Brand Loyalty, Vacations and Alcohol
A Pew Research Study found that 71% of Americans reported buying less expensive brands to save money during the economic downturn, 57% either cancelled or cut back on vacation plans and 30% reduced their spending on tobacco and alcohol. After the recession, consumers will likely continue to buy familiar brands, but only if they offer the desired features and price points.
Internet Shopping Has Increased
One retail sector that has experienced tremendous growth during the economic downturn has been online retailers. In a study by Booz & Company, the number of consumers shopping online for a variety of products doubled from 16% to 32% since 2009. This research also revealed that two times as many consumers now research products online, about 23%, in comparison to 11% in 2009.
The National Retail Foundation‘s magazine also reported that online mega-merchant, Amazon.com, is ranked number two on the NRF’s Hot 100 List due to Amazon’s 46.2% sales growth over the past year. (Rankings on this list are determined by increases in annual domestic sales for companies who have over $300 million in sales.)
Online shopping seems to be here to say with Forrester predicting that 15% of total retail sales in the U.S. will come from online purchases by 2015, representing $279 billion in gross sales. New e-commerce models that are harnessing the power of mobile Internet such as Groupon, Google Offers, and Living Social have also helped bolster the acceptance of online shopping among American consumers. As e-commerce grows, so does the likelihood that m-commerce will pick up steam and become the new shopping norm.