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For shoppers, the economy’s descent into what is by all accounts a recession is nothing new.
They’ve been in an “emotional recession” for eight years, said Wendy Liebmann, founder and chief executive officer of WSL Strategic Retail, who described how Americans shop in times of crisis.
“They have a whole set of values beyond value,” said Liebmann, who added that the “emotional recession” began with the dot-com bust and carried through terrorist attacks, natural disasters and product recalls.
The net result is a shopper who is on edge and needs to be handled with kid gloves.
Liebmann said shoppers are “very angry,” and one in five women are so upset they’re actually staying out of stores.
They take an attitude of: “If I don’t need it, I’m staying home,” she said.
Although gasoline prices have fallen recently, there are plenty of economic pressures bearing down on consumers. The credit crunch and stock panic in September and October took big chunks out of 401(k) plans and other investments, housing prices are dropping and job losses are piling up. As a result, many shoppers don’t have the ability to spend as they did before.
In the face of these sweeping changes over which they have no control, consumers are turning their economic energies to things in their budgets they can impact.
“They have to control the little things,” Liebmann said. “Help them control the little things and they will reward you.”
Shoppers are staying closer to home, trading down and cutting back in myriad ways.
“Bargaining has become a way of life for one-third of women shoppers,” Liebmann said. “They’re damn proud of their savings.”
Customers can shop for anything they want anywhere, she said, pointing to the $349 Comme des Garçons jacket that can be found in Hennes & Mauritz.
This all amounts to a new challenge for brands and stores that have to do more than lean on corporate clichés that implore executives to “think outside the box.”
“There is no box, no net, no rules,” she said.
So what’s a store or brand to do?
Adapting Bill Clinton’s successful strategy to win the White House, Liebmann’s answer was simple: “It’s the consumer, stupid.”
Liebmann offered suggestions on how to focus on shoppers. The first was to develop a way to know your best shoppers, a sentiment that was an undercurrent in her presentation.
Fashion companies have to keep consumers keyed-in on their brands and they have to keep them in their stores, she said.
“Keep them now so you won’t lose them forever,” she said.
To do this, stores and brands need to be what consumers want them to be, whether it’s selling secondhand goods or setting up a shopping site online.
“Follow the shoppers, know your shoppers really well, even in times of crisis,” Liebmann said. “Keep them in the store anyway they want to be kept.”