Challenges continue to mount for America’s retailers despite the slowly improving economy.
A new research report by WSL Strategic Retail, entitled “How America Shops, Mega Trends Moving on 2012,” came to some startling conclusions. Among them:
• 52 percent of Americans are struggling to afford the necessities.
• The 18-to-34-year old youth market is no longer retail’s “golden ticket.”
• Consumers are less apt to trade up on brands they indulged in before.
• Six-figure earners consider themselves “middle-class” and nearly 30 percent in the $100,000 to $150,000 income bracket claim they can only afford the basics.
The report is based upon an online survey of 1,950 people nationwide conducted from Dec. 1 to Dec. 12, 2011.
“There is a huge fundamental issue when more than half of Americans can only afford basic necessities and people who earn up to $150,000 think they are poor,” said Wendy Liebmann, chief executive officer of WSL Strategic Retail, a New York-based research and consulting firm.
As the economy slowly improves, “American shoppers are moving on and coming back to shopping, but at their own pace,” Liebmann added. “As a result, retail sales are precarious and likely to fluctuate up one month, down the next. That’s not going to change any time soon. Brands and retailers cannot ignore this. They will need to re-think the way they do business over the next three to five years or longer.”
The youth market, according to Liebmann, has the highest percent of those who don’t have enough money to cover their basic needs, with 24 percent in financial turmoil. “This group is a long way from recovery, compelling retailers targeting this group to seriously rethink their strategies,” Liebmann said.
She also has a dire outlook on brands. “Shoppers in general are placing a greater focus on price, with 67 percent of women agreeing that trusted brand names are not worth paying more for.” Twenty-six percent of the women said they previously bought brands they could not afford, but no longer indulge.
Key additional findings: 75 percent of women said it’s important to get the lowest price on everything; 68 percent regularly use coupons, and 45 percent only buy on sale. Also, 43 percent of women search online for discounts before they shop, and 14 percent use mobile phones in stores attempting to find lower prices elsewhere.