Retailers should revamp marketing strategies during recession

By Giselle Tsirulnik

October 15, 2008

Shop til' you drop

With the current economic turmoil, retailers need to modify their marketing strategies by placing more emphasis on segmentation and shoppers' potential future behavior, according to a study by Acxiom

Acxiom's Retail Consumer Dynamics Study is an analysis of consumer shopping behavior and attitudes in today's difficult economic times. The study has been released right on time -- before holiday shopping starts -- to help marketers figure out what they need to change in order to get through to their key consumer targets.

"In response to an unprecedented combination of economic pressures, consumer shopping behavior is changing in varied new ways that cut across most traditional demographics," the study says.

"Acxiom's industry-unique analysis of traditional and emerging behavioral factors driving consumer shopping has found nine new behavior-based segments that can provide retailers with new insights into how their customers are shopping today and what they can expect from each of these segments when the economy begins to rebound," it says.

The Acxiom study places these nine segments into three distinct groups reflecting consumers' potential future behavior �' those likely to loosen up on spending sooner, those not likely to change from current behavior, and those tightening spending and retreating further.

Savvy Spenders are mostly married, affluent, both young and mature, living in outer suburbs and rural communities. This group is more likely to spend sooner than other segments, given some improved circumstances.

Of the Savvy Spenders, 37 percent are shopping sales more often.

This group favors department stores for their combination of category offerings and brand and price option.

Those likely to shop more online are the "Tight with Purpose," who are married with children, upper middle income with professional or management careers.

The "It's My Life" segment �' mostly affluent young consumers maintaining a child-free city lifestyle �' are not letting current economic conditions change their shopping behavior.

"Understanding each segment's unique combination of behavioral factors makes it possible for retailers to adjust strategies to connect with consumers in a fashion that aligns with their current approach to shopping and their choice of brands and products," the study says.

"Tapping into how consumers are approaching and handling the shopping process can yield a breadth of opportunities," it says.

Firstly, retailers will be more equipped to protect their current customers. Retailers can determine how historically strong customers are behaving today and how well their current blend of brands, assortment, pricing, services and convenience match them.

In addition, with this understanding comes the opportunity to capture new customers. Retailers can use behaviorally-defined segments to pinpoint and target consumers whose demographics alone may not have previously matched the retailer's blend of brands, assortment, pricing, services and convenience.

For both current and target customers, retailers need to modify their media message, theme and content to be more reflective of the concerns of the targeted online or in-store audience.

In order to refine promotions and coupon offers, retailers need to figure out which media to use and target accordingly.

There are four elements that stand out as key shopping behavior drivers:
• Past purchase behavior and future intent
• Importance of price
• Shopping trip preference
• Type of store shopped most often

"Much is being written about consumer behavior today that is one-dimensional and although traditional points of data are certainly still relevant, there are new, equally important factors to be considered," the study says. "The introduction of new factors - gas prices alone, for example -- is impacting the shopping process in completely new ways that track as far back as consumers planning their shopping trips in advance.

"While it may have been simpler in the past to consider these factors individually, it's no longer a sufficient basis for marketing planning," it says. "What counts as we go forward is to understand how consumers intend to approach the shopping process."