Gwen Morrison, CEO of The Store's Americas and Australasia region, said last week that there had been a shift in the way consumers shopped, with down-trading being evident and, in some cases, people opting out of shopping.
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Morrison told business people in Johannesburg last week that travel by plane, for example, was being replaced by video conferencing.
She said companies needed to be innovative and creative in the economic environment. Consumers faced a lack of credit, no spending power and some products were starting to see deflation.
Discount was king, and companies that were trading on price and value were reaping the rewards. In addition, the retailer was seeing shortened trading days that were indicative of less cash in pockets. Morrison said people were spending only in the first 10 days of the month.
As a result, retailers in countries where the credit crunch had hit hard were being forced to rethink their strategies, lessons South African companies could learn.
Consumers wanted to be able to cut costs without necessarily having to cut back on their lifestyle, Morrison said. They wanted high value for low price.
Morrison said, however, that cutting prices could affect the credibility of the brand, and consumers might wonder whether the initial price point had been set too high, even though sales might “clear shelves”.
She said retailers should look at a form of retail therapy that did not break the bank, but did uplift spirits. For example, Morrison said, retailers in the US were starting to promote products that made consumers feel happier and indicated that retailers — and suppliers — were trying to show they were on the side of the consumer. “Happiness is big business.”
Consumers also wanted to know they were getting more for their money. So products that were sustainable and did not have an impact on the environment were popular.
In addition, suppliers were promoting the good as far as possible, even to the extent of packaging and offering jelly beans that were not the correct shape for sale. Morrison said such items had done well.
The important thing, she said, was to “turn this thing on its ear”.
Source: Business Day
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