By Andria Cheng
Shoppers looking for a bargain in a tough economy may be shifting priorities, willing to put up with some inconvenience in order to get a better price or a better product, a survey shows.
More than a year after the fallout of the financial markets that led to an unemployment rate near 10%, American consumers, in a fundamental behavioral change seen for the first time in at least 10 years, are willing to trade their time and forfeit good service. In return, they want a product they perceive offers them some value, according to a fourth-quarter survey of 8,000 shoppers by advisory firm Alix Partners, which has conducted similar studies on consumer mindsets since 1999.
For the first time, service--whether it's shopping in channels from department stores and electronics retailers to shoe stores and discounters--became the least important priority while product and price surged to the top and became even more crucial, the survey showed.
"The time-starved consumers have been the marching order for the last two decades," said Matthew Katz, who heads retail practice at Alix Partners, in an interview.
"We've talked about 'I need to speed her to the checkout and I need to get her closest to the parking lot.' Today, for value, consumers are willing to cede time, service and experience. They are willing to wait in line a little longer or drive that extra two miles," he said.
Across the board, so-called value--what Katz defined as a cross between product and price--has been the singsong of retailers from discounter Wal-Mart Stores Inc. (WMT) to luxury retailer Saks Inc. (SKS). Giving consumers more bang for their buck, whether it's by introducing lower-priced products within Saks's designer collections or by J.C. Penney Co.'s (JCP) exclusives, such as American Living by Polo Ralph Lauren Corp. (RL), retailers each in their own way are seeking that perfect mix that they think will entice shoppers to open their wallets.
"The intersection of price and product is driving consumer behavior," Katz said. "There's been this magnetic pull to value. Price is important even at the luxury level."
As a result, consumers also are shopping different retailers and across more channels to get what they think is the best deal, according to the report to be released Wednesday.
For instance, a quarter of respondents in the survey ranked Wal-Mart as one of their top three choices when they buy books, when the retail heavyweight didn't even make the top five list 18 months ago. Wal-Mart, Target Corp. (TGT) and Amazon.com Inc. (AMZN) made the top five list for consumers considering electronics purchases. None made the list 18 months earlier when the last survey was conducted, Katz said.
Retailers such as mid-priced retailer Kohl's Corp. (KSS) and off-price retailer Stein Mart Inc. (SMRT) have also scored high in the consumer survey as their product assortment and price resonate with shoppers, Katz said.
"Retailers have to understand the consumer is highly educated and efficient and acceptable of alternative channels," Katz said. "They have given consumers an appetite to explore new channels."
-Andria Cheng; 415-439-6400; AskNewswires@dowjones.com