It’s the end of consumers as we know them but retailers can still feel fine
The global downturn has not simply led to a correction in shopper behaviour, with normal service likely to resume shortly, but has possibly prompted a long-term fundamental shift in the way consumers purchase products.
By Glynn Davis in Barcelona
This is the view of Jim Stengel, chief executive of Jim Stengel LLC and former global marketing officer of Procter & Gamble, who told delegates at the World Retail Congress in Barcelona that 90 per cent of shoppers say they have made a long-term shift in their behaviour. And even if this ultimately proves to be the true for only 20 per cent of people then Stengel says it will still have a significant effect on brands and retailers. “It’s not a weather change, it’s a climate change,” he suggests.
This view is supported by the fact that even though consumer confidence has been picking up around the world there has not been an increase in spending. Stengel believes this is not just down to the credit squeeze, which makes it difficult to access funding, but is a result of the behavioural shift by consumers who are now saving more and downsizing their lives.
Against this backdrop Stengel believes there are still some major opportunities for retailers. He suggests successful operators must ‘stand for something that matters’ and cites Darty and Marks & Spencer as good examples of this, with the latter conveying its green credentials very well. They must ‘play an important role in consumers’ lives’ with Mexico-based Palacio de Hierro having succeeded with its focus on appealing to women rather than on mothers and wives that has predominated in that country. Stengel also says retailers can win through a ‘focus on ownership, not purchase’ and cites Apple as delivering on this front.
He also suggests retailers ‘cultivate smart and savvy shoppers’ with Ann Taylor Loft setting a good example through its partnership with Tide Totalcare thart seeks to go against the trend for ‘disposable’ clothing. And finally Stengel recommends retailers focus on ‘creating joint value for retailers and brands’, which he says can be achieved through both parties sharing the knowledge they have on their customers.
But even taking on-board these points Stengel acknowledges that it will be increasingly tough in the future to deliver on shoppers’ needs: “Going forward it is shoppers who will dominate [rather than manufacturers or retailers]…and they must delight shoppers who will demand more. They are getting tougher to delight.”
