The news is starting to come out about how the recent “Economic Unpleasantness” has changed the consumer. Not just slightly altered, but fundamentally changed.
A recent article in Entrepreneur by Kim T. Gordon highlights a new study identifying new shopping attitudes and new buying habits.
It’s about time.
Anyone who works in retail and who pays attention (which automatically eliminates many in management) has known that the consumer has changed for over a year.
People are focused on value, they want to know how a purchase will enhance their lives, how it will create more for them rather than just give them more to have. Outside of commodities, the lowest price is being compared to performance or expectations of performance in an attempt to determine value. If all you offer is low price, then you automatically become a commodity.
Prices in my store have been going up and down like ping pong balls. I have one item which will fluctuate in price from 58 cents to 68 cents and then to 78 cents, and then stair step back down again…all in the same week. Prices have been changing, both going up and going down, on hundreds of items in my store on a daily basis. There’s no rational behind these price changes, just a knee jerk reaction from some knee high jerk in corporate.
How do you establish any type of value proposition with a customer if your prices are continually changing?
And don’t think customers don’t notice. They bring the changes to my attention every day.
When it comes to a home improvement purchase of any size or complexity, consumers will visit the store multiple times. Each time they come in the price has changed and it generates confusion and doubt that makes closing a sale nearly impossible.
Not that closing a sale is all that high on the big box retail “To Do” list. We have cut labor to the bone so that rather than spending time with customers developing the trust and confidence necessary to help them buy, we have given up selling to be able to provide better “Customer Service”.
“Customer Service” is all about cleaning the store, re-painting shelves, and moving product displays for the 19th time. “Customer Service” is about checking things off of a work list rather than helping customers buy anything.
Not that there is anything in the store for them to buy. The other big box retail reaction to these new consumer attitudes is to reduce inventory in the store to keep costs (but not always prices) lower.
So in direct contradiction to what the experts in the press are saying: Another important tip is to be visible when customers are ready to buy what you offer, we have almost no significant quantity of any thing in the store.
In our business, there is something called “job lot quantities”. If you don’t have enough inventory of something for the customer to complete the entire project, then you don’t get to sell any part of the project. So if you are short a few $1.25 flooring tiles, then you loose the entire $2,000 tile flooring project. So the few dollars we save by having less $1.25 floor tiles in inventory lost us $2,000 in sales. A loss that will not show up on any report on the knee high desk of some corporate pricing coordinator.
As the article in Entrepreneur concludes: No matter your target audience, whether male or female and across almost every income level, one thing is clear--the recession has created a new normal for American consumers, and there's no turning back the clock.
I sure hope someone in corporate is reading, I actually hope they can read, because they have stopped listening to us in the store and if they don’t figure this new consumer out soon, it will be grim days for big box indeed.
