‘The shopper of tomorrow will spend less’

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NEW YORK — Consumers are changing the way they shop for health and beauty products because of the recession, according to new research from Information Resources Inc. (IRI) and the National Association of Chain Drug Stores.

What is perhaps equally important, according to IRI president of consulting and innovation Thom Blischok, is that the new attitude of thrift is likely to continue after the current economic slump is over.

In a recent webinar devoted to the new report “Health and Beauty: Discovering the Real Truth About Shopper Behavior,” Blischok predicted that there will be signs of a recovery in shopper behavior by the third quarter of this year, followed by a new stability in 2010.
But that new stability will not mark a return to the spending patterns that dominated before the economic downturn.

“The shopper of tomorrow — the new conservative shopper — will spend 6% to 10% less,” Blischok said.

That means some spending habits consumers have adopted during the recession will likely continue when good times return, Blischok noted. In fact, consumers have said as much.

In surveys conducted in connection with the study, consumers made such remarks as “We have lived and learned and will continue to be more conservative,” and “We’ve gotten used to the new way and see the benefits.”

The surveys found consumers of all income groups cutting back on purchases of health care and personal care products.

Although shoppers with annual incomes below $35,000 were found to have made the biggest cutbacks, reducing spending on personal care products by 25% and on health care items by 23%, more-affluent consumers have also reduced their spending in these categories. People with annual incomes of $100,000 or more said they had cut their spending on personal care products by 13%, and their spending on health care products by 9%.

One way people are cutting back is by making fewer purchases on impulse. The IRI/NACDS study has found that shoppers — particularly the generation known as “millennials” — are making shopping lists before they go to the store.

Shoppers are planning their purchases by consulting store flyers, clipping coupons and making the most of their purchasing decisions before they leave home. While 40% of buying decisions were made in-store in 2007, by July 2009 only 17% were, according to IRI. That suggests fewer opportunities for marketers to influence purchasing decisions with point-of-purchase advertising.

Blischok said retailers and marketers will need to make greater use of the Internet (including social media), loyalty card programs and coupons in their efforts to communicate with consumers.

The consumer obsession with low prices is good news for private label items, which Blischok predicted will grow in market share past their current average of about 19% to 20%. Store brands have above-average share already in such categories as hand and body moisturizers, vitamins and supplements, bandages, pain relievers, over-the-counter cold medications, digestive aids and antibacterial creams, notes IRI.

Consumers are also looking to simplify their shopping rituals and will mainly stick with familiar products, Blischok added.


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