Savvy consumers?
There’s an interesting piece in marketing magazine this week (it came up in my press cuttings) about the degeneration of the power of sales. Here’s an extract:
According to Julian Reiter, managing director of marketing group Positive Thinking, the middle class – the backbone of the British economy – now expects a discount. “Sales don’t have the same impact anymore and when consumers are expecting a 70% discount all year round, it’s a big challenge for brands,” he says.
Shopping it seems has lost its position as a leisure pursuit. Adele Meer, planner at ad agency Archibald Ingall Stretton, says that far from being the relaxed pastime it once was, consumers now “stealth-shop”, using their smart phones to research their purchases and “raising an army of mini-Martin Lewises” to secure the best deals.
In response to this, in the US, clothing retailer Gap has sought to placate consumers who are withholding their spend until sales periods with the introduction of a loyalty scheme called Sprize. It puts ‘Sprize money’ in a customer’s account when a product they have bought goes on sale at a reduced price within 45 days of purchase – in effect, paying them the difference between the full price and sale price. Such tactics not only stop consumers feeling cheated, but, crucially, tackle the issue of them indefinitely deferring or putting off purchases.”
I know some grammarians will first want to argue what the plural of Lewis is. More interesting is the fact that retailers are starting to notice the change in consumer patterns.
Two and half years ago we coined the phrase ‘voucheristas’ to describe people who pick where they’ll eat depending on what restaurant vouchers are available. The trend of the savvy shopper soon followed. I remember trying to describe this attitude for the first time in an interview in Christmas 2008. It went something like this:
The real aim of many now is to be a savvy shopper. Retailers want to draw in new customers, without cannibalising their existing trade, so they use discrete sales – in other words sales that don’t hit everyone. This is done in two ways – either by the launch of discount codes and vouchers or one day type sales. This way they can draw in new customers but limit the cannibalisation effect on existing ones.”
It’s taken two years but ‘consumer savviness’ now has an impact at a macro level. The next phase will be to watch the response from the retail and branding industry. Competition has increased consumers’ bargain and discount expectations. Not meeting those could see retailers suffering a serious drop in custom. Yet for the sake of profit they’ll want to retrench, so what happens next?
As always in the adversarial consumer society there’s a flick flack as to who has the upper hand. Soon retailers will hit back, and then consumers will have to come up with new strategies. Interesting times…
