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