Monday, August 27

Dropping Confidence: Marketers Need To Adjust Expectations

One recent survey by an online coupon site doesn't see the holidays shaping up to be as strong as last year. In researching shopping attitudes and behaviors, its results revealed more than 7 in 10 consumers (71 percent) have a dismal view of the economy. One in four are worried about being able to make all the necessary purchases. Only three percent felt the economy was in "good shape."

The survey from RetailMeNot.com coincides with deeper studies, including one published by Bloomberg. The latest decline marks the longest series of declines since 2008. Part of the problem is that gasoline and grocery prices have risen, but there is no real job growth.

The first study mentioned was designed to look at how consumers plan to shop for the remainder of the year. And RetailMeNot concluded that the lackluster economy has helped to create a demand for discount shopping (namely coupons). We have another tip for marketers following study highlights.

Highlights from the RetailMeNot consumer sentiment study. 

• Women (46 percent) are more likely than men (31 percent) to start shopping earlier than November.
• Most (23 percent) will start shopping in early November; Some (12 percent) on Black Friday/Cyber Monday.
• An increasing amount of people (15 percent) plan to wait until after Cyber Monday to begin shopping.
• 54 percent of respondents will finish between Black Friday and their gift-giving holiday.
• 31 percent said that they will be done with their holiday shopping by the end of Cyber Monday.
• Women (58 percent) are more likely than men (50 percent) to finish shopping after Cyber Monday.
• Nearly a third of respondents (31 percent) intend to do their holiday shopping online.
• More than 70 percent of consumers (71 percent) think the economy is in "bad" or "terrible" shape.
• A quarter (25 percent) believe the economy is "okay;" fewer than 1 in 20 think that it is "good" (3 percent).

One of the most compelling statistics is that 4 in 10 respondents (40 percent) say that they should be able to get most of what they want, but cannot afford it all. Only about a third of respondents (36 percent) are not worried about being able to buy all the things they need in the coming months. Nearly 1 in 4 feel it will be difficult to purchase things they need over the next several months, let alone what they want.

Marketers might have to try something new if sentiment doesn't shift. 

What is most concerning about consumer confidence is that what was once called the "new normal" is beginning to erode into a self-fulfilling acceptance that things might get worse. There is little faith that the existing administration can do anything.

Marketers might be able to help consumers (and themselves) three-fold. Market first (people will be making shopping decisions earlier), market online (people are making decisions online even if they are planning to shop offline), and market fair (offer discounts that might help stretch the budget). All three might seem like common sense, which is why there are two more worth consideration.

Marketers could make a lasting impression by making purchases more experienced based. Shopping for experiences is one of the few types of purchases that hasn't slowed down (e.g., travel is up). The reason is pretty simple. People are looking for distractions that give them a chance to breathe.

Second, although this might sound like contrarian advice, is to ease up on push and plus marketing. If there has ever been a time to help consumers find exactly what they need as opposed to padding sales, this might be it. The trade off is an exchange of short-term gain for long-term loyalty.

When consumers are in a slump, customer satisfaction becomes too important in establishing long-term relationships. Given how many marketers claim they want long-term relationships online, it only makes sense that they adjust their objectives accordingly. Too much urgency or attempting to plus sell the transaction could pressure consumers into making an unexpected decision — buy nothing at all.
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