Adios, aspiration. In response to the Great Recession, consumers have tightened their purse strings and now opt for experiences and items that will garner the most social attention, not label-envy. A study “Retail Reborn: How the Aspirational Purchase Has Shifted,” released by NPD Group detailed consumers’ move from risking credit scores to snag a brand-name purchase to avoid debt and gain followers.
The decline of discretionary income during the Great Recession compelled consumers to shift spending habits. According to the report, individuals now prioritize artisanal and handcrafted items; chase individuality versus traditional fashion; are anxious about debt; value experiences over material products, and investigate the most photogenic option to inform their purchases. This upheaval of values has upended the luxury jewelry and handbag categories — luggage purchases alternatively, have raised, the report said.
The statistics that the NPD Group Consumer Tracking Service deciphered support the claim. Jewelry and handbag year-over-year dollar change has dropped four and eight percent. Meanwhile small personal accessories and luggage has increased by three and four percent, respectively — consumers are spending on trips and physical experiences, the behavior suggests.
And it’s not just middle-income earners that are making the change. “A recent study from NPD’s Checkout TrackingSM service showed about 19 percent of spend at Dollar Tree, Dollar General, and Family Dollar came from households with an income in excess of $100,000 a year,” said the report. Millennials are also embracing discount shopping — the research found that Millennials who earned over $100,000 visited dollar stores almost 13 times annually.
Instead of investment buys that boast recognizable labels, consumers now prefer unconventional, signature items. “A signature item is a consumer good that requires careful selection. An easily found, mass-produced, available-everywhere item doesn’t fit the bill,” the report said. “For Millennials, a generation that records everything and shares it on social media, a signature item’s purpose is to be shown, as much as it is to be used.”
A seismic shift is happening beyond purchases, in fact these new spending habits are simply a symptom of a larger transition in group mindsets. “Consumers no longer aspire to more. Instead, they aspire to be. Instead of craving a cult item or brand adored by the masses, consumers seek items that enhance their personal brand,” the report said. With that, retailers would behoove themselves to consider the ‘gram-ability of their bricks-and-mortars while tapping micro-influencers to up their relevance among the socially swayed consumer.
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