NEW YORK — Given the economy, shoppers are zeroing in on price more than ever — and are increasingly bypassing monobrand specialty retailers in favor of department stores.
That’s according to the results of the 2008 Consumer Sentiment Index, to be released today, the 10th such survey by AlixPartners. Conducted last summer and fall, the survey queried 7,400 U.S. consumers about the relative importance of product, service, price, experience and accessibility of the store to shoppers.
“For 10 years, prices have been kind of the third most important thing that people value after product and services,” said Fred Crawford, a managing director at the advisory and consulting firm, which works with retailers and in other sectors. “[Price] has really leaped forward and has tied with product for number one in importance, and service has dropped to the bottom.”
Crawford said consumers are “willing to endure poor service and a bad experience to stretch their buck.
“What that means tactically is don’t buy deep, be conservative in your first price and be aggressive in your first markdown,” he advised. “Be willing to sell through and miss sales as opposed to not being able to sell through and being left with a bunch of inventory.”
The razor focus on price by shoppers at all distribution tiers appears to be a significant change in consumer attitudes, said Crawford.
“Even affluent consumers may well spend less in 2008,” he said. “It’s almost fashionable to be more conservative.”
Shoppers also are beginning to favor stores such as Kohl’s and J.C. Penney over single-branded specialty stores such as Gap, according to the survey’s results.
Crawford noted that Kohl’s and Penney’s are doing a better job of competing by adding designer offerings, such as Simply Vera Vera Wang at Kohl’s and the American Living collection by the Global Brand Concepts division of Polo Ralph Lauren at Penney’s.
Having space to carry more goods also gives them a leg up in catering to shoppers with time constraints.
“Consumers are time starved and kind of harried, so they like to chore-stack,” he said. “They like to get six things done in one store.”