Fifty-two percent of Americans are struggling to afford necessities, with youth market hurting most, and branded products are under threat as consumers seek low prices; retailers must 'rethink the way they do business': WSL/Strategic Retail study
March 2, 2012
– A shocking 52% of Americans are struggling to afford the necessities, and for many even that is a stretch, according to WSL/Strategic Retail, the leading authority on shopper behavior and retail trends. The finding was revealed today as part of the Company’s How America Shops® MegaTrends report, Moving On 2012.
Significant findings of the report include:
Youth market no longer retail’s golden ticket. The youth market, 18-34 year olds, has the highest percent of those who do not have enough money to cover their basic needs, with close to a quarter (24%) in financial turmoil. Compared with people over 35, who were able to launch their careers 10 years ago, when times were good, this group is a long way from recovery, compelling retailers targeting this group to seriously rethink their strategies.
Branded products under threat. Shoppers in general are placing a greater focus on price, with two thirds (67%) of women agreeing that trusted brand names are not worth paying more for. More than a quarter (26%) of women admit that while they used to buy brand names they could not afford, they are no longer giving in to this indulgence. This figure is up 7 percentage points from 2010.
Six-figure incomes struggle. It takes a significantly higher income to feel financially secure in this economy, with nearly 30% of Americans in the $100-150K income bracket claiming they can only afford the basics. Once considered affluent, six-figure income shoppers are now identifying themselves as middle-income.
“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, CEO of WSL Strategic Retail. “Look, American shoppers are moving on and coming back to shopping, but at their own pace. 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.”
Candace Corlett, President of WSL Strategic Retail continued, “The youth market, which has traditionally been known for its enthusiastic spending of discretionary income, has virtually dried up. As today’s young adults struggle to find employment and pay down student loan debt, this demographic now represents the largest percentage of Americans who are challenged to afford even basic necessities.”
Key additional findings:
A stunning 75% of women now say it’s important get the lowest price on everything they buy, up 12 percentage points. from 2008 and up 22 percentage points from 2004. Some old and new methods of ensuring they get the lowest price include:
68% regularly use coupons to reduce costs -- up 7 percentage points. vs. 2010.
45% claim they only buy items that are on sale -- also up 7 percentage points
43% make a point to search online for store discounts before they shop -- up 10 percentage points
14% of women say they use their mobile phones while in store to see if they can find a lower price, before they buy.
The “cautious pause” before buying to ask, “Is this a smart use of my money?” (Total: 66%, HHI $150K: 47%)
Managing their aspirations by sticking to brands and stores they can afford (Total: 58%, HHI $150K: 36%)
Staying out of stores where they might be tempted to overspend (Total: 48%, HHI $150K: 28%), and,
Buying less when they go shopping (Total: 43%, HHI $150K: 26%)
WSL/Strategic Retail draws several conclusions from the study to enable retailers to define and prepare the right retail strategy as consumers return to shopping, but with new rules and restrictions that influence what they buy and where they buy it. For more information or to purchase the report, please call 212.924.7780 or email email@example.com.
Notes on Survey Methodology and Analysis
WSL/Strategic Retail conducted an internet survey from December 1-12, 2012. The survey included 1,950 respondents drawn from a nationally representative online same.
About WSL/Strategic Retail
Founded in 1986, WSL/Strategic Retail (“WSL”) is the leading authority on shopper behavior and retail trends. Through its unparalleled research, global trend analysis and customized consulting services, WSL arms retailers, manufacturers and brands with the tools required to stay ahead of the market and motivate shoppers to purchase. The Company tracks the mindset, attitude and behavior that shape shopper trends, and predicts how they transform brands and retailers throughout the U.S. For more information, visit www.wslstrategicretail.com.
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